Evaluating the ICER Special Report in the Context of Medicare Drug Price Negotiations: Implications for Manufacturer Pricing and Evidence Strategies
Author(s)
Breyanne Bannister, PharmD, MS, Alissa Shaul, BA, MPH, Jeff Lee, PharmD, FCCP, Jonathan Kowalski, PharmD, MS;
Lumanity Inc., Bethesda, MD, USA
Lumanity Inc., Bethesda, MD, USA
OBJECTIVES: As part of the Medicare Drug Price Negotiation (MDPN) program, ICER submitted a Special Report to CMS evaluating two drugs selected for 2024 negotiations. The report aimed to translate evidence into initial offer prices based on a product's clinical and economic value. As CMS considered ICER's input during 2024 negotiations, understanding ICER’s approach to pricing is critical. This analysis aims to evaluate the ICER Special Report relative to CMS Guidance to determine potential readiness implications for drug manufacturers participating in MDPNs.
METHODS: The methods and value framework used to generate preliminary pricing in the ICER Special Report were examined against the 2023 Final CMS Guidance. Alignment and discrepancies between the two approaches were analyzed to understand potential implications on negotiations and manufacturer strategies. Recommendations for MDPN readiness for manufacturers were generated based on key findings.
RESULTS: While value frameworks from ICER and CMS are similar, there are meaningful differences. For example, ICER’s methods are more quantitative, leveraging a de-novo decision-analytic model followed by a price premium threshold analysis to inform preliminary price estimates. Conversely, CMS Guidance uses a qualitative approach for initial price offers to preserve flexibility in negotiations. This flexibility may allow for consideration of broader value elements, including societal impacts, as these outcomes may not be adequately captured in standard models. Manufacturers should highlight the benefits and limitations of ICER’s framework and provide CMS with evidence supporting a comprehensive evaluation of their product’s comparative value. Engaging with ICER during Special Report development can support alignment and validation of manufacturer-submitted evidence.
CONCLUSIONS: ICER’s Special Report aligns with CMS Guidance with limitations. Manufacturers should consider the findings of this analysis when developing their evidence and negotiation strategies. Future analyses are needed to understand ICER’s potential impact within the context of evolving CMS Guidance and its influence on final pricing.
METHODS: The methods and value framework used to generate preliminary pricing in the ICER Special Report were examined against the 2023 Final CMS Guidance. Alignment and discrepancies between the two approaches were analyzed to understand potential implications on negotiations and manufacturer strategies. Recommendations for MDPN readiness for manufacturers were generated based on key findings.
RESULTS: While value frameworks from ICER and CMS are similar, there are meaningful differences. For example, ICER’s methods are more quantitative, leveraging a de-novo decision-analytic model followed by a price premium threshold analysis to inform preliminary price estimates. Conversely, CMS Guidance uses a qualitative approach for initial price offers to preserve flexibility in negotiations. This flexibility may allow for consideration of broader value elements, including societal impacts, as these outcomes may not be adequately captured in standard models. Manufacturers should highlight the benefits and limitations of ICER’s framework and provide CMS with evidence supporting a comprehensive evaluation of their product’s comparative value. Engaging with ICER during Special Report development can support alignment and validation of manufacturer-submitted evidence.
CONCLUSIONS: ICER’s Special Report aligns with CMS Guidance with limitations. Manufacturers should consider the findings of this analysis when developing their evidence and negotiation strategies. Future analyses are needed to understand ICER’s potential impact within the context of evolving CMS Guidance and its influence on final pricing.
Conference/Value in Health Info
2025-05, ISPOR 2025, Montréal, Quebec, CA
Value in Health, Volume 28, Issue S1
Code
HPR71
Topic
Health Policy & Regulatory
Topic Subcategory
Pricing Policy & Schemes
Disease
No Additional Disease & Conditions/Specialized Treatment Areas