— In 2017 and 2018, out of nine identified drugs that had substantial price increases on top of already high current spending, seven drugs had no new important evidence to support their price increases. The net price increases on these seven drugs alone cost American insurers and patients an additional $4.8 billion over two years —

BOSTON, October 8, 2019 – The Institute for Clinical and Economic Review (ICER) today published its first annual report on Unsupported Price Increases (UPI) of prescription drugs in the United States.

ICER began its analysis by ranking the top 100 drugs by sales revenue in the US. Working with data from SSR Health Inc., drugs were then evaluated to see whether their price increases net of rebates and other concessions were more than twice the level of increase than growth in the medical consumer price index over the 24-month period from the beginning of 2017 to the end of 2018. Ultimately, ICER identified the top ten drugs whose price increases would have contributed to the largest net increase in drug spending in the US. One drug was added to this list following public nomination. ICER then evaluated whether there had been relevant new evidence at any time during the preceding three years that could have supported these price increases.

Upon analysis, two drugs on the initial list were found to have price increase data that appeared unreliable, and these drugs were excluded from further consideration, leaving nine drugs for full evaluation. Following consideration of input from manufacturers and a systematic review of evidence available in published studies, ICER determined that seven of the nine drugs had evidence that was not adequate to support a claim of additional clinical benefit.

These seven drugs, in order of the impact of their price increases on drug spending in the US, are:

Humira® (adalimumab, AbbVie) Lyrica® (pregabalin, Pfizer) Truvada® (tenofovir disoproxil fumarate, Gilead) Rituxan® (rituximab, Genentech)* Neulasta® (pegfilgrastim, Amgen) Cialis® (tadalafil, Eli Lilly) Tecfidera® (dimethyl fumarate, Biogen)

The two drugs assessed that did have new important positive clinical evidence were Revlimid® (lenalidomide, Celgene) and Genovya® (elvitegravir/cobicistat/emtricitabine/tenofovir alafenamide, Gilead). Importantly, however, ICER’s determination that new evidence exists for these two treatments should not be interpreted to mean that the new evidence justifies the level of price increase; a full cost-effectiveness assessment was not conducted.

Net price increases for the seven drugs unsupported by new evidence were responsible for increasing total US drug spending by more than $4.8 billion from 2017-2018. The drug whose price increases accounted for the greatest single impact on spending was Humira. Humira’s average US price increased 15.9% over this period, after accounting for rebates and other concessions, ultimately costing American patients and insurers an estimated $1.86 billion more than what would have been spent if Humira’s price had not increased. Data on all seven drugs whose price increases are unsupported by new clinical evidence are shown in the table below.

Treatment Q42016 to Q42018 Wholesale Acquisition Cost (WAC) Increase Q42016 to Q42018 Estimated Average Net Price Increase US Spending Impact of Net Price Increases in 2017 and 2018 (in Millions) Humira 19.1% 15.9% $1,857 Lyrica 28.3% 22.2% $688 Truvada 14.3% 23.1% $550 Rituxan* 17.0% 13.8% $549 Neulasta 14.6% 13.4% $489 Cialis 26.2% 32.5% $403 Tecfidera 16.7% 9.8% $313

“The norm in the United States has been for most pharmaceutical manufacturers to increase prices year after year — even accounting for the discounts they give insurers, and even for drugs that already sit at the top of the chart of spending for drugs in the US,” said David Rind, MD, ICER’s Chief Medical Officer. “The goal of ICER’s new UPI report is to provide the public and policymakers an explicit and independent approach to determine whether price increases could potentially be supported by new clinical evidence. If new evidence emerges that shows a treatment may be more beneficial than what was previously understood, perhaps that new evidence could warrant some level of price increase. For seven of the nine drugs we reviewed, however, we found that the price increases lacked justification in new evidence.”

Details on Methodology

In 2018, ICER organized a multi-stakeholder advisory group — comprising representatives from patient groups, drugmakers, and insurers representing Medicaid and the private market — to provide input on the development of a protocol for these UPI reports. These reports may evaluate up to 13 drugs that have experienced substantial price increases over a two-year time period.

To determine which prescription drugs would be assessed for this UPI report, ICER identified the 100 drugs with the largest US sales revenue in 2018 and then narrowed the list to only those 77 treatments that experienced Wholesale Acquisition Cost (WAC) increases at rates of more than twice the medical Consumer Price Index (CPI) across 2017 and 2018. ICER then narrowed the list to the top ten treatments that had estimated net price increases responsible for the largest increases in US spending over those two years. Two of the ten treatments were removed from the assessment based on manufacture input that revised those estimates. Consistent with the UPI protocol, the public was encouraged to suggest 1-3 additional drugs for assessment that fell outside of the top ten but still posed significant concern because of large recent price increases; through this process, Revlimid® became the ninth drug that ICER would assess for new evidence of clinical benefit.

Of the nine drugs ICER assessed this year under the UPI protocol, two of the therapies had new high or moderate quality evidence suggesting a substantial new health benefit compared with what was previously known: Revlimid and Genovya®. Importantly, as noted earlier, ICER’s determination that new evidence exists for these two treatments should not be interpreted to mean that the new evidence justifies the level of price increase; a full cost-effectiveness assessment was not conducted.

For each of the seven remaining treatments, ICER found no substantial new evidence to suggest an important additional clinical benefit.

* NOTE: After initial publication of the Unsupported Price Increase Report, Genentech provided ICER with exact values for the net price of Rituxan in Q42016 and Q42018, and the volume sold in 2017 and 2018. Due to the discrepancy between the exact values and the data ICER obtained from SSR Health, LLC, ICER decided to update the report with the data provided by Genentech on November 6, 2019.

About ICER

The Institute for Clinical and Economic Review (ICER) is an independent non-profit research institute that produces reports analyzing the evidence on the effectiveness and value of drugs and other medical services. ICER’s reports include evidence-based calculations of prices for new drugs that accurately reflect the degree of improvement expected in long-term patient outcomes, while also highlighting price levels that might contribute to unaffordable short-term cost growth for the overall health care system.

ICER’s reports incorporate extensive input from all stakeholders and are the subject of public hearings through three core programs: the California Technology Assessment Forum (CTAF), the Midwest Comparative Effectiveness Public Advisory Council (Midwest CEPAC), and the New England Comparative Effectiveness Public Advisory Council (New England CEPAC). These independent panels review ICER’s reports at public meetings to deliberate on the evidence and develop recommendations for how patients, clinicians, insurers, and policymakers can improve the quality and value of health care. For more information about ICER, please visit ICER’s website.