In July 2019, ICER held a public meeting to discuss its report on the “value” of treatments for Duchenne muscular dystrophy. Despite patients reporting life-changing improvements, ICER concluded the treatments were not “cost-effective.” During the meeting ICER President Steven D. Pearson admitted that patient advocates have no real impact on ICER’s valuation process.

WHAT IS ICER?

The Institute for Clinical and Economic Review, or ICER, is a private entity that creates cost analysis reports that insurance companies use to deny patients access to innovative medical treatments.

When ICER determines a treatment is too expensive, insurance companies may choose to use that report as the basis to deny treatment. ICER’s access restricting reports have targeted many patient communities, including people suffering from Alzheimer’s disease, young boys afflicted with Duchenne Muscular Dystrophy, and patients living with lung cancer, hemophilia, rheumatoid arthritis, chronic kidney disease, or high cholesterol. 

Based in Boston, ICER is funded by major players in the healthcare industry and led by Steven D. Pearson, “a former research fellow for America’s Health Insurance Plans (AHIP), the insurance industry’s lobbying trade association in Washington, which spent nearly $10 million lobbying Congress in 2015.”

I’VE NEVER HEARD OF IT. WHY SHOULD PATIENTS CARE ABOUT ICER?

Have you ever been denied access to your doctor’s treatment? Or, battled for hours with your insurance company over bills and coverage options?

Whether you realize it or not, many of these insurance barriers may have started with the Institute for Clinical and Economic Review. Although most patients have never heard of ICER, its reports can affect whether patients can access the treatments prescribed by their doctors for those covered by private health plans, Veterans Affairs, and increasingly they are creeping into Medicaid decision making.

“ICER describes itself as the “nation’s drug pricing watchdog,’” writes Patricia Goldsmith, the CEO of CancerCare, a national organization that provides free support services to cancer patients. “But it seems to us that it is protecting the insurance companies that pay for treatments.”

WHY ARE DOCTORS & PATIENT ADVOCATES SO CONCERNED?

ICER’s reports give insurance companies and pharmacy benefit managers a dollar value for deciding whether new treatments should be covered by private health plans and, ultimately, made available to patients.

Here are five major concerns with how the Institute for Clinical and Economic Review operates:

• Anti-Patient: ICER denies patients the ability to vote on its cost analysis reports. Although the organization proudly excludes patients from voting, ICER has no problem giving a vote to representatives of the insurance industry, which has a vested financial interest in its decisions.
• No Oversight: Unlike the Food and Drug Administration, ICER’s employees and board of directors are not required to follow federal ethics rules or financial disclosure laws that are required at the FDA. There’s no way for the public to review potential conflicts of interest at ICER.
• Discriminatory Algorithms: ICER uses something called a Quality Adjusted Life Year, or QALY, to deny patients access. It’s a math formula that compares the life of a person battling a disease with that of a healthy person, plus the cost of the medicine. It starts from the premise that a patient living with cancer is worth less than a healthy patient.
• Unregulated: Because ICER is a private organization, it’s not bound by federal laws restricting the use of QALYs. As part of the Affordable Care Act, Congress banned Medicare from using the QALY methodology out of concern that it could hurt the ability for the elderly and people with disabilities to access medical care.
• Non-Transparent: ICER makes its recommendations based on secretive reviews by self-selected experts. The organization refuses to make its cost analysis framework fully available to the public.

HOW DOES ICER AFFECT PATIENTS LIVING WITH RARE DISEASES?

ICER poses a direct threat to treatment innovations for rare diseases.

The group has a troubling pattern of ignoring the needs of patients living with rare diseases. A 2019 report by the Pioneer Institute details how ICER systematically undervalues innovative treatments for chronic and complex conditions. Between 2014 and 2018, none of ICER’s reviews of rare disease drugs resulted in a “high value” rating.

“Patients with complex and rare diseases have much to be hopeful for as our knowledge expands and more innovative and specialty therapies come to market,” explains Dr. William Smith, the report’s author and a visiting fellow on life sciences at the Pioneer Institute. “Yet, ICER threatens to limit access to these life-changing treatments.”

WHO FUNDS THE INSTITUTE FOR CLINICAL AND ECONOMIC REVIEW?

The Institute for Clinical and Economic Review accepts funding from the biggest corporations in the health care industry, including insurance companies.

According to published reports, ICER’s funding sources include Blue Cross Blue Shield of Massachusetts, Blue Shield of California Foundation, California Health Care Foundation, Harvard Pilgrim Health Care, New England States Consortium Systems Organization (NESCSO), and Partners Healthcare.

However, its single largest funding source is billionaire John Arnold, a former energy trader who is “the recipient of the single biggest cash bonus — $8 million — in the history of Enron, the scandal-ridden, defunct energy company for which he once made roughly $750 million in a single year.” ICER is part of a $60 million effort by Arnold’s private foundation to influence health care decisions – with ICER alone receiving $19 million.