ICER To Start Evaluating Formularies and Drug Cost Sharing

The Institute of Clinical and Economic Review (ICER), the cost-effectiveness research group in Boston whose assessments have become influential in drug pricing decisions and debates, is now wading into issues of formulary management and drug cost sharing.

ICER, in collaboration with researchers at the Office of Health Economics, a British health research consulting group, issued a white paper today about ethical formulary management and announced that it will be using the criteria in the white paper to assess the formularies of leading payers.

With the growing attention being paid to fair pricing of drugs, it is equally important that policy makers be just as clear about what fair access looks like, and work to make sure that it is achieved throughout the U.S. health care system," Steven D. Pearson, M.D., M.Sc., president of ICER said in the press release.

Sarah Emond, M.P.P., the group’s executive vice president and chief operating offficer, was quoted in the press release as that ICER will be “launching our own initiative to evaluate the formularies of leading payers and, using the criteria from the white paper, assess whether we find concordance across the coverage policies of leading U.S. health insurers.”

The 67-page white paper addresses cost sharing, step therapy, and other issues.

The white paper says that cost sharing should be based on the net price of a drug to the plan sponsor, not the list price. “Linking cost sharing to the net price is complicated by the countervailing need to retain confidentiality surrounding net price in a way that supports the negotiating power of payers,” the document acknowledges, “but payers are now finding

Steven D. Pearson

administrative ways to make this possible.”

The white paper says that “economic step therapy” — prioritizing treatments with a lower net cost to the plan sponsor over other drugs — can be justified by the payers’ obligation to promote “prudent use of limited health care.” But it also says that there should be limitations on economic step therapy, including a requirement that it take into account all of health care spending, not just spending on drugs, and that it shouldn’t force patients to retry drugs that they have previously didn't to respond to or to which they have had an adverse reaction.

The white paper also delves into considerations of the criteria for deciding which drugs should be included on formularies and how they are tiered and restrictions on the provider prescribing.

Sarah Emond

"This white paper gets right at questions that are critically important for patients — questions that should drive the way plan sponsors, payers, and drug makers develop policies that determine patient access to drugs,” Pearson says in the press release.