[00:00:00] Stacey Richter: Bonus episode. "Who Is ICER and What Is the Arms Race of Pharmaceutical Pricing That The Status Quo Has Created?" Today I am speaking with Sarah Emond.
The Pharmaceutical Pricing Arms Race
[00:00:29] Stacey Richter: Not gonna give much of an introduction here because this is a short bonus level set, but I did just wanna call everyone's attention to the, “arms race” created by our status quo, purchasing and selling of many things. Pharmaceuticals included.
For example, raise the list price of a drug to maximize rebates, because the higher the list, the bigger the discount you can give, which then exacerbates patient affordability because coinsurance is often based on list price. But then pharma starts offering copay cards, which messes up the whole PBM plan to drive patients to their highest rebate products, ie, the most profitable products.
So then maximizers and accumulators enter the chat and prior auths ramp up because plans start having to raise premiums after enough 340B drugs with high lists and no rebates, and then there's no cost containment and raise deductibles and around and arounds we go.
Meanwhile, is this drug fundamentally worth the list price or even the net price? Is it an effective drug? What's the right price to be paying for this drug? Should be the operative question, right? Just like what's the quality and appropriateness of any medical service? Maybe we should just quit it and just pay for value.
Introducing ICER and Its Mission
[00:02:17] Stacey Richter: And with that, let me introduce Sarah Emond, CEO of ICER, and I will let Sarah tell the rest of the story.
My name is Stacey Richter. This podcast is sponsored by Aventria Health Group.
Understanding ICER and Its Role
[00:02:28] Stacey Richter: So maybe a surprising number of people have never heard of ICER, and I'm going to freely admit I haven't memorized the acronym. Maybe we should start here.
[00:02:38] Sarah Emond: Good place to start stands for the Institute for Clinical and Economic Review. And that tells you a little bit about what we do and why we do it. Fundamentally, ICER conducts value assessment, the idea that we can look at the evidence that tells us how good something is compared to what we already do in the healthcare system. And we do a lot of our work on prescription drugs.
So that's the comparative clinical effectiveness piece. And then we take it a step further and we analyze how much we are getting for that spend. How much health are we getting out of a new therapy? And we use cost-effectiveness analysis to do that. We have other approaches to measuring value that are very important. And it's all in service to a very public process that helps the ultimate decision makers know what a fair price is for what we pay for in the healthcare system.
And we're structured to be free from financial conflicts of interests. We have a very public process of both developing our reports and then holding a public meeting for our reports. And we invite every stakeholder be to be part of those meetings, even if they don't necessarily agree with what we're trying to accomplish.
Because we don't think we're getting out of this in any meaningful way unless we continue to show up and have difficult conversations in a respectful public manner.
The Complexity of Value Assessment
[00:03:57] Stacey Richter: The whole having respectful conversations in a public manner. Anytime I have ever seen anybody try to tell somebody else how cost effective something is or the value of something, you immediately will have 15 people screaming at each other.
[00:04:13] Sarah Emond: Yes. And. It doesn't mean we don't need to have the conversation. So we think what the North Star that we've had for a very long time about having a multistakeholder public conversation is because we have witnessed shared learning from having those difficult conversations over the years. And I think that's an under appreciated part of why a multistakeholder process is important.
When there is a lot at stake and we cannot pretend there isn't, there is a lot of money being made off of the status quo. I think we have to just acknowledge that reality. It's one of the reasons that change is really hard, so there's gonna be strong feelings. There's going to be motivation for a certain perspective to pervade a particular interest group. And we acknowledge and understand all of that, and we still invite everyone to come to the meeting.
I do think there is something very important about still showing up even when people have strong feelings or question your motivations or don't understand, which is honestly a part of it that I completely identify with. The work that we do is pretty nerdy when we're doing value assessment, when we are in the weeds, looking at the strength of the evidence and analyzing the P values of clinical trials, and then we're doing a cost-effectiveness model that can feel very far away from the very human part of healthcare.
The patient with sometimes a very serious condition wanting access to the medicine that their doctor thinks they need. And I get that when you start applying rigorous methods to analyzing how good a new drug is and how much it should cost, that that might evoke strong feelings.
Deescalating the Pharmaceutical Arms Race
[00:06:06] Sarah Emond: But the one thing that I've taken away from working on this issue and working with patient groups, with consumer groups, with pharmaceutical companies, with purchasers, is at the end of the day, I think we can deescalate this arms race.
And that the tension that we feel in the system, higher and higher prices, more and more access restrictions, more and more cost sharing is the result of a series of choices that we have made, and we can make different choices that fundamentally support affordable access for patients. And that's what motivates us every day to continue to invite everyone to the table to keep having a conversation.
[00:06:42] Stacey Richter: It is so interesting what you just said there about deescalating the arms race, and I can see exactly what you were talking about and I think everybody, we've had shows, there was a, a show called "Game Theory Gone Wild" that I did a bit ago just about the battle of the copay cards.
But the same thing holds true writ large, really within the pharmaceutical industry that you've got pharma who keeps raising list prices higher than inflation. And then you've got payers who opened up GPOs who get bigger discounts. So you're, are you talking about gross price? Are you talking about net price? There's so many different levers to be pulled or ways to use prior auths or buy and bill.
Like this has become such a loaded conversation with so many different shoots and ladders that it really is an arms race.
The Financial Ramifications of Drug Pricing
[00:07:41] Stacey Richter: Anything that you try to do has deep financial ramifications. So when you're talking about the value of a drug, the opportunity for that conversation to become less than pure is a definite omnipresent fire alarm. Really.
[00:07:56] Sarah Emond: I think that's really well said.
The Financial Impact on Patients and the System
[00:07:57] Sarah Emond: And I think that when we think about all of the levers that have been pulled that are often about maintaining that status quo, maintaining that revenue stream, we ultimately forget who's paying for that. It's us through our health insurance premiums and through our taxes.
I recently read a quote from a senior executive at an AI company that was purporting to help doctors not miss any code that they could include in the visit with their patient by having this ambient listening tool.
And when the reporter asked this person, well, aren't you worried about that driving up costs? He said, well, the health insurance company will just pay for it. And she had to point out to this executive that the health insurance company gets their money from premiums from us. It hadn't occurred to him. And I'm not trying to pick on this one executive, he's illustrative of how a lot of actors in the system think things work.
And ultimately we have lost in a lot of circumstances the ability to think about population health, about how these choices impact all of us and how if we make more sound, evidence-based, value-based choices, we improve access and affordability for everyone. There is another way out of this, but it is not common knowledge that that's how all of this financing works.
[00:09:32] Stacey Richter: Which is crazy. But I have had similar both conversations or you read someone's Substack or something like that. And it is someone who, I was gonna say recently arrived in the industry, but sometimes it's not someone who recently arrived. It's someone who's been around the black enough times, obviously does not listen to this podcast because completely it's like pennies from heaven, right?
Like somebody, the big, bad insert, someone here is paying for it. And we definitely have forgotten that there's only three ultimate purchasers of healthcare. Them being, those three are taxpayers, employers, self-insured employers, and the patients themselves or members. That's it. That's all we got.
Conclusion and Further Resources
[00:10:16] Stacey Richter: Sarah Emond, if someone is interested in learning more about ICER, where would you direct them?
[00:10:21] Sarah Emond: Please come to our website, icer.org, and if you scroll to the very bottom, sign up for Weekly View, it's a great way to get a sense of what's happening in drug pricing news and to get a latest take on our press releases and our work.
[00:10:33] Stacey Richter: I C E R . org?
[00:10:35] Sarah Emond: You got it.
[00:10:36] Stacey Richter: Sarah Emond, thank you so much for being on Relentless Health Value today.
[00:10:38] Sarah Emond: Thank you.
[00:10:39] Tom Nash: Hi, this is Tom Nash, editor and producer of the RHV Podcast. You've probably heard me say this podcast is sponsored by Aventria Group, and that's true, but there's more to the story. Aventria is our day job, and the people that make this show happen are Aventria employees generously donating their time and talent on top of everything else they do to get each episode out the door.
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