Lost in the noise of political posturing over health care, there’s one widely accepted principle: the importance of the doctor-patient relationship in medical decision-making.
Yet we’ve all heard stories where insurance companies won’t fully cover a drug that both the doctor and patient believe is the right medical choice. Why not? It’s pretty simple: the insurance companies don’t want to pay.
As cutting edge drugs come to market, insurance companies are scrambling to find ways to justify not paying for them.
Insurers will tell you (if you can get them on the phone) the drug isn’t covered because it’s not on their formulary, their own list of preferred medicines. Kids have a term for this: “Sorrynotsorry.” Don’t let the circular reasoning fool you.
Almost as bad, doctors often have to get pre-authorization before prescribing something that is on the formulary. (Because we all need more paperwork.)
The flawed justification was normalized by President Obama in 2009, when he oversimplified pharmacoeconomics, saying, “If there’s a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that’s going to make you well?”
Insurance companies are using this concept to cut costs by excluding the red pills. To do so, they’ve cooked up a clever way to justify exclusions from formularies by founding and funding a group called the Institute for Clinical and Economic Review, or ICER.
ICER does a version of something called “comparative effectiveness” to determine whether, across the population, the drugs are worth the cost compared to other treatments. It releases the findings around the same time drugs come to market, just in time for insurance companies, who, not coincidentally, serve on ICER’s governing board, to justify excluding FDA approved drugs from the formulary based, in part, on ICER’s “independent” math.
And so far, it’s working, at least for health insurance companies. According to longtime pharmaceuticals reporter Ed Silverman,”ICER is becoming a de facto arbiter for the nation’s medicine chest.”
Take a closer look at ICER’s modus operandi, and you’ll see why this is a horrifying proposition.
ICER, which holds itself out as a kind of Consumer Reports for drugs, is basically an industry-backed comparative effectiveness calculator. That ICER is industry backed isn’t the problem, it’s that it uses comparative effectiveness to lend an air of legitimacy to the formulary shenanigans.
Different people respond differently to medications. The blue pills don’t always work the same as the red pills. Individuals, it turns out, are different.
Consider the common blood thinner, Plavix, an important drug for the prevention of strokes and heart attacks. Yet we’ve learned from the emerging field of biomarkers that up to nearly a third of the tens of millions of patients who take it have an inferior genetic variant of an enzyme that is needed to convert the drug to the active form, so their bodies can’t fully activate the drug.
We’re also learning more about the role genetics plays in opiate side effects. While morphine and oxycodone are critically important pain killers, we’re getting a better understanding about which people are more susceptible to not only nausea and slowed breathing, but potential for addiction. Similarly, advances in personalized medicine are likely to play important roles in fighting mental illness. Arguing that the less expensive drugs we already have are good enough would be a deadly mistake.
Prior authorization requirements are so burdensome that they’ve prevented patients from access to drugs they need. In the case of two PCSK9 inhibitor drugs, used to treat patients with very high cholesterol who don’t respond to statins, the country’slargest pharmacy benefits manager, Express Scripts allowed them on the formulary, but made the prior authorization requirements so complex, that, as vice president Everett Neville told Reuters, PCSK9 inhibitors aren’t budget busters because, in part, a lot of “physicians are not providing (needed) information.” Conveniently, an ICER report recommended extensive prior authorization.
ICER’s approach appears to be modeled on the United Kingdom’s National Institute for Health and Clinical Excellence (NICE) model, which tries to judge the cost-effectiveness of therapies, in order to help determine which health services the government should provide. ICER and NICE share more than just three letters; ICER’s president, Steven Pearson, was awarded an Atlantic Fellowship by the British Government and acted as Senior Fellow at NICE.
If insurers get to play the role the British government does, determining which pills are cost-effective, we’ll have taken a huge step not only toward rationing, but toward stifling innovation.
What investor would fund research on better cholesterol-lowering drugs, when we’ve already got generic statins? In a NICE-ICER world, we might never have gotten statins because older treatments were cheaper.
What’s more, the approach ignores the futility of such one-size-fits-all prescribing of medicines. For many classes of drugs — not only statins, but antihypertensives, pain relievers and antipsychotic medicines — the selection of the appropriate drug or combination of drugs among many possibilities requires a delicate balancing of effectiveness and acceptable side effects in each patient.
So far, ICER hasn’t received the scrutiny it deserves. ICER’s controversial methods are being used to weigh which drugs we’ll have access to, and insurance companies have their thumbs on the scale.
Jeff Stier is a Senior Fellow at the National Center for Public Policy Research in Washington, D.C., and heads its Risk Analysis Division.
[Originally published at Pundicity]
Jeff Stier is a Senior Fellow at the Consumer Choice Center. He is also a policy advisor to The Heartland Institute.
