OBJECTIVES: The Institute for Clinical and Economic Review (ICER) publishes an annual Unsupported Price Increase (UPI) report that emphasizes the annual increase in “unsupported” drug spending due to net price changes. Despite allowing for medical inflation in the UPI protocol, ICER’s reported annual increases in spending are not accordingly adjusted for inflation. This study compared ICER’s unadjusted findings to the inflation-adjusted findings to evaluate the real impact on drug spending.

METHODS: We inflation-adjusted ICER’s reported annual net price percentage changes using the time-period-specific medical consumer price index (CPI) in ICER’s protocol (e.g., 4.05% from 2021-22). Following economic best practices, the inflation-adjusted net price percentages were used to recalculate corresponding changes in drug spending via a linear ratio. We analyzed all instances of “unsupported” price increases from ICER's four most recent UPI reports (2018-19 through 2021-22), totaling 31 cases involving 23 distinct drugs, with some like Humira (adalimumab) and Xifaxan (rifaximin) appearing across multiple reports.

RESULTS: After adjusting for inflation, all eight “unsupported” drugs from the most recent report (2021-22) reflected a decrease in drug spending of $134 million, a stark contrast to the unadjusted ICER finding of a $1.27 billion increase. This discrepancy largely stems from Humira's net price increase being lower than medical CPI. Excluding Humira, the inflation-adjusted analysis reveals that the remaining seven drugs only account for a $282 million rise in drug spending from 2021 to 2022, a 68% reduction from the $888 million increase reported by ICER. Inflation adjustment produced reductions in each of the prior three reports (16% from 2020-21, 47% from 2019-20, and 39% from 2018-19).

CONCLUSIONS: This analysis shows that by not accounting for inflation, ICER overestimates the impact of price increases on drug spending and calls into question the value of its UPI reports for informed policy-making.