Unexplained price increases are a recurring theme whenever a congressional committee discusses U.S. prescription drug prices, and both state and federal lawmakers have proposed measures to force drug manufacturers to justify those increases.
A new report released Tuesday by the Institute for Clinical and Economic Review (ICER) claims that, often, there is no justification. In reviewing "substantial price increases" in 2017 and 2018 for drugs that already resulted in high current spending, ICER said it found no "new important evidence" to support the increases for seven of the nine drugs studied.
At the top of ICER's list is Humira (adalimumab), Abbvie Inc.'s blockbuster biologic that likely won't see biosimilar competition in the U.S. until 2023. Over the 24-month period studied, Humira's wholesale acquisition cost (WAC) increased by about 19%, while its net price increased by almost 16%. That net price change resulted in an estimated increase in drug spending of $1.86 billion, ICER said.
Although Abbvie, of North Chicago, submitted 204 references – 160 conference presentations and 44 published manuscripts – as new clinical information for ICER to consider in its review, the independent institute said none of the submissions met its inclusion criteria of what constitutes new information on the benefits or harms of the drug.
However, ICER's assessment was restricted to already approved indications that account for more than 10% of a drug's use. Although Humira is approved for 10 indications, ICER disregarded any new clinical data supporting five of those indications, including three for rare disease, because they each accounted for less than 10% of the biologic's use. The assessment also ignores any R&D in pursuing new indications for a drug, either alone or in combination therapies.
ICER's Humira review excluded 76 references Abbvie submitted because the study design didn't meet the institute's criteria for assessing efficacy. Another 62 were excluded because the intervention or comparison was outside the scope of the review – for instance, a comparison of TNF-inhibitors with non-TNF-inhibitors – and 25 weren't included because the outcomes weren't considered relevant to a cost-effectiveness analysis.
In addition to Humira, ICER found no new evidence to justify the 2017-2018 price increases for Rituxan (rituximab, Roche Holding AG); Lyrica (pregabalin, Pfizer Inc.); Truvada (emtricitabine/tenofovir disoproxil fumarate, Gilead Sciences Inc.); Neulasta (pegfilgrastim, Amgen Inc.); Cialis (tadalafil, Eli Lilly and Co.); and Tecfidera (dimethyl fumarate, Biogen Inc.). The total increase in U.S. spending in the U.S. in 2017 and 2018 due to the price increases for the seven drugs added up to $5.1 billion, ICER said.
The two drugs with significant price hikes that had new important positive clinical evidence were Revlimid (lenalidomide, Celgene Corp.) and Genvoya (elvitegravir/cobicistat/emtricitabine/tenofovir alafenamide, Gilead). But ICER noted that its determination that new evidence exists for Revlimid and Genvoya "should not be interpreted to mean that the new evidence justifies the level of price increase," as the institute didn't conduct a full cost-effectiveness assessment.
In conducting its first annual Unsupported Price Increase (UPI) Assessment, ICER reviewed drugs with estimated net price increases over the two-year period that would have caused the greatest increase in U.S. drug spending. That selection was based on a list of the 100 drugs with the largest U.S. sales revenue in calendar year 2018. In addition to its own selection, ICER considered public nominations. That's how Revlimid was included in the drugs that were reviewed. (See Costliest U.S. drug price hikes 2017-2018, below.)
Except for Revlimid, all the drugs ICER reviewed topped a list of 77 drugs, ordered by the change in spending, that had an increase in WAC, or list price, greater than 7.32% – double the increase in the medical care consumer price index – over the two-year period. At 25.8%, Revlimid had the second highest increase in list price, but ICER lacked the data to estimate the drug's net price for the study period, so it couldn't accurately determine the change in spending due to Revlimid's price increases.
ICER's goal for its UPI reports is to provide policymakers an independent approach to determine whether price increases could 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," said David Rind, ICER's chief medical officer.
That approach ignores competitive factors that play into pricing. For instance, four of the nine drugs ICER reviewed faced generic or biosimilar competition for the first time in 2018 or expected to see it this year. While the report focuses on increases in spending caused by price hikes, it doesn't delve into the difference between an increase in list price and net price, which can be significant given the rebates and discounts drug companies pay to secure a preferred formulary placement.
Of the drugs included in the ICER assessment, Lyrica had the largest list price increase at 28.3%, but its net price increased 22.2%. Cialis, which had a 26.2% WAC increase, had the highest increase in net price at 32.5%.
Among the 77 drugs identified with WAC increases greater than 7.32%, 26 actually had a decrease in spending. That could be a result of fewer prescriptions due to growing competition and to lower net prices reflecting bigger rebates to secure formulary positions.
For instance, despite the increase in its list price, Sanofi SA's Lantus (insulin glargine) saw nearly a $1.27 billion drop in spending over the two-year period. And spending on Glaxosmithkline plc's (GSK) asthma drug, Advair (fluticasone/salmeterol), decreased $1.01 billion. (See Drugs with decreases in U.S. spending but increased WAC prices, below.)