Employers, Payers Begin to Base Drug Coverage on ICER’s Value-Based Price Benchmark
A recent article by the Wall Street Journal explores the Institute for Clinical and Economic Review (ICER), and how payers are beginning to use this organization’s model to make medication coverage decisions. ICER has no political ties, which allows it to provide an independent examination on the price of drugs. ICER uses a model which determines how much health a drug restores to a sick patient and then sets an appropriate price.
This model is not a new concept and has been used for years by many countries, such as Canada and Britain, to determine if the medication will be covered by government-funded health systems. This model gives these countries tremendous negotiating power because if the medication is not deemed cost-effective it will not be available eligible for coverage.
Similarly, payers in the United States are beginning to use ICER’s reports to make coverage decisions on medications. Medications that do not meet pre-determined measures may be met with higher copay’s, prior authorization requirements, or exclusion from the benefit plan.
Pharmaceutical companies are also beginning to take note and price their medications accordingly. Last year, Sanofi cut the price of its cholesterol medication, Praluent, to be in line with ICER’s recommendation.
The complete Wall Street Journal article can be found here: Obscure Model Puts a Price on Good Health—and Drives Down Drug Costs
Find more information about ICER at https://icer-review.org/