Report: No correlation between drug cost increases and clinical improvements

Drug price increases that were not supported by clinical improvements raised health care costs in the U.S. by about $1.67 billion in 2020, a new report said.

The report, released by The Institute for Clinical and Economic Review (ICER) said that among the top 10 drugs with price increases last year that had substantial effects on US spending, seven of 10 drugs did not have new evidence of a new clinical benefit. The group said these unsupported drug price increases cost the U.S. health system $1.67 billion, even after pharmaceutical rebates and other concessions.

Officials with ICER noted that in some cases, drug price increases have slowed in recent years in the U.S., but their new report on unsupported price increases (UPI) showed that seven top-selling drugs did not have new clinical evidence that would justify a price increase.

“Many high-cost brand drugs that continue to experience annual price hikes, even after accounting for their rebates,” said David Rind, MD, ICER’s Chief Medical Officer. “The most extreme of these is Humira, with an ever-escalating US price that contrasts starkly to its falling price in every country where Humira currently faces biosimilar competition. Even more concerning, several of these treatments have been on the market for many years, with scant evidence that they are any more effective than we understood them to be years ago when they cost far less. If new data emerge that show a treatment may be more beneficial than what was previously understood, perhaps some level of price increase is warranted. For seven of the ten high-cost drugs we profiled in this year’s report, though, we found that the price increases lacked such justification.”

Humira the biggest source of increased spending

As Rind noted, the drug that caused the most increased spending by far was Humira, a rheumatoid arthritis drug. Humira alone accounted for $1.4 billion of the $1.67 billion in additional drug spending, according to the ICER analysis. The researchers found that the drug had seen a net price increase of 9.6% in 2020.

The report added that the drug’s cost has been rising for several years. “Humira is the only treatment to be identified as having significant unsupported price increases across all three UPI reports,” the study said. “Even after subtracting the manufacturer’s rebates, Humira’s net price increased an estimated 29.6% from the beginning of 2017 to the end of 2020.”

The ICER report included responses from drug manufacturers, and AbbVie, which makes Humira, contributed a response that pointed out that ICER cannot comprehensively assess the value of drugs such as Humira. ICER, for its part, agreed that the study is not the last word on the drug’s value, but merely documents that the price for the drug has increased without substantial evidence of increased benefits or effectiveness.

Findings come as Congress debates negotiating drug costs

The report noted that having the government step in to negotiate lower drug prices has been a topic for debate on both the state and federal level. The current consideration of the Build Back Better plan, which has been passed by the House but may be modified in the Senate, has included provisions for Medicare to negotiate drug prices within certain constraints.

The increased interest in government involvement in setting prices has come at a time when some drug price trends have moderated, the report noted. If such developments are helping to keep prices down, that may be a positive development for sponsors of health plans, the report said, but high prices for consumers remain a problem.

“The changes in the market represent positive news for payers but have more mixed interpretation for patients, who continue, in many cases, to pay cost-sharing amounts linked to list prices,” the report said. “As the market and policy landscape evolves, questions are likely to continue regarding the relationship of price increases to new information on clinical effectiveness.”