Determining if Drug Price Increases are Justified

Drug prices continue to increase but the reasons for the increases are often nebulous. The Institute for Clinical and Economic Review (ICER) evaluated the pricing in partnerships with SSR Health Inc, a research firm, calculated the increases excluding discounts and after-market rebates (1). It was the first such annual report by the Boston-based research group, which assesses the cost-effectiveness of drugs.

A list of 78 drugs with price hikes at more than twice the rate of medical inflation was developed. From this list 9 drugs were selected for detailed review because they had the largest increase in drug spending due to a net price change. ICER reviewed these 9 drugs to determine if the price increases were supported by new clinical evidence based on new indications or data suggesting superiority over other drugs. Of these 9 drugs, ICER concluded 7 did not have justification for the price increases.

Advair, Glaxo’s beta agonist/steroid combination was the only bronchodilator on the list but was not selected for detailed review. Rituxan, a drug which can be used to treat granulomatosis with polyangiitis (GPA, formerly known as Wegener's Granulomatosis) and microscopic polyangiitis (MPA) was one of the drugs selected for review and ICER concluded the price increase was not justified.

ICER acknowledged it was difficult to determine the actual increase in spending on the drugs, but said it was confident that the seven drugs cost increase were more than other drugs (2). "If manufacturers weren't raising prices if they haven't shown a new important benefit, I think that would help," ICER Chief Medical Officer David Rind said. He added that he hoped pricing drugs based on new benefits could help slow cost hikes.

Not surprisingly pharmaceutical companies with drugs on the list were critical of the report. Gilead, Lilly, Pfizer and Roche were all critical of the report or defended their drug pricing policies (2). Both California and Vermont now have laws tracking substantial drug price increases, requiring drug manufacturers to submit information that might justify increases above a certain threshold (1). ICER hopes their report is a first step in providing the public and policymakers with information they can use to advance the public debate on drug price increases.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Institute for Clinical and Economic Review. Unsupported price increase report: 2019 assessment. October 8, 2019. Available at: https://bit.ly/31XIdyk (accessed 10/11/19).
2. Humer C. Humira, Rituxan top list of U.S. drugs with biggest price increases: report. Reuters Health News. October 9, 2019. Available at: https://www.reuters.com/article/us-usa-healthcare-drugpricing/humira-rituxan-top-list-of-u-s-drugs-with-biggest-price-increases-report-idUSKBN1WN1BE (accessed 10/11/19).

Cite as: Robbins RA. Determining if drug price incrases are justified. Southwest J Pulm Crit Care. 2019;19(4):123-4. doi: https://doi.org/10.13175/swjpcc064-19 PDF