The Man with a Price: ICER's Steven Pearson

Everyone’s talking value, but not everyone is willing to pin down the elusive concept. Steven Pearson, founder of the Boston-based, not-for-profit Institute for Clinical Effectiveness Review (ICER) talks all things value-based with Leela Barham.

Steven Pearson, ICER

Steven Pearson is convincing when he talks about the ethical challenges faced by health systems. He points out that, “these run the gamut, from how to manage confidentiality, conflicts of interest”, and where he and colleagues now focus on, “making decisions on using financial resources.”

Pearson talks like an economist; not to be confused with hard hearted. Without saying the words “opportunity costs”, it’s clear that at the heart of ICER’s work and ethos is the recognition that when a health system spends on one treatment, it cannot then spend the same dollars on another. There’s not enough dollars available within health budgets to do everything, so somethings gotta give. Better to make those decisions drawing on the evidence than without.

When asked why he wanted to set up ICER, Pearson points to his training as a young physician. He was struck by how everyone – be that insurance companies, hospitals, doctors groups – had to make tough decisions about where to spend when money is limited. He saw it then, as he still does now, as “an ethical and scientific challenge.” ICER is “an experimental lab in the US, a way to work with stakeholders on how to use evidence to inform decision-making.”

Pearson has made a job for ICER to evaluate the evidence on the value of tests, treatments and delivery approaches for health in the US. ICER reports aim to help all those making decisions to translate evidence into decisions. ICER, according to the website, wants to play a “pivotal role in creating a future in which collaborative efforts to move evidence into action provide a foundation for a more effective, efficient and just health care system.” A big ambition and one that has generated big debate, too.

A NICE influence

Pearson was influenced by his experience as a visiting fellow at the UK’s National Institute for Health and Care Excellence (NICE) in setting up ICER. That left an enduring desire to maintain what he describes as “an ethical instinct” that he says permeates throughout NICE.

He describes his time at NICE as an opportunity to “see what NICE was doing”, which then prompted him to reflect on what “we could do in the US that would be better.”

For Pearson at least - not everyone is such a fan of the agency - NICE offers some desirable features. Those features include consistency and transparency, using a rigorous process. Attractive too, although not absent in the US at the time ICER was set up but was perhaps more prominent in the UK, was an “honesty about the challenges, a willingness to talk about trade offs” Pearson says. That is something he hopes that ICER embodies too.

It’s almost inevitable that ICER and NICE are compared given Pearson’s experience at NICE, and because there are similarities in how each goes about their job. For Pearson the comparison is “a mixed blessing.” On the upside, Pearson says, “for people who know about the international scene for Health Technology Assessment (HTA), to be compared to NICE is usually a benefit.” That stems from the fact that, “NICE has a strong reputation in the science and procedures”, Pearson adds. He acknowledges too that, “NICE is not viewed as perfect.”

Pearson points out that despite questions and at some times criticism, “NICE has stood the test of time.” He also admires what he describes as NICE’s willingness to learn over time. The downside is that in the US “NICE used as a kind of bogey man” Pearson says. Memorable for many is when NICE was used in the same sentence as death panel during the controversial progression of Obamacare.

Pearson highlights that there are clear differences. ICER is not governmental and as Pearson says himself, fits into a very different health system context. Afterall ICER reports have a different status to those that come from NICE. NICE Technology Appraisal recommendations are supported by funding; when positive. ICER reports have no such formal position in the complex landscape of US decision-making on new drugs.

The ICER way

ICER is now ten years old. Although the agency has been refining how it goes about its job, Pearson points out that the mission has remained the same.

Not that it’s easy. Pearson talks about the challenges at the start of ICER’s work in 2007, including “just trying to get people involved.” When ICER started out, “people had no idea what ICER was and what we were trying to do,” he adds. Even from the outset ICER wanted to, “engage with manufacturers, health plans, doctors groups and others,” the trouble then was that “people were busy”. Given that there are no more hours in the day today and that ICER no longer struggles to get engagement - inevitably from positive to negative feedback - speaks to how far ICER has come.

One challenge that remains is what Pearson describes as “people always want to assume ICER represents a particular interest.” Pearson is not critical of that per se, pointing out that in the US there is “a very polarized and competitive landscape.” He also acknowledges that unlike many agencies with similar aims, ICER doesn’t have a pre-ordained Governmental spot. He recognises that in some people’s eyes, “ICER is a kind of odd think tank like structure.” Pearson recognizes too that it’s his job, along with the wider ICER staffers, to explain ICER and not only that, but in working with others, let them get to know ICER.

Pearson speaks not only about the challenges in getting ICER to where it is now but also the best thing. He says, “the best thing has been, despite what we know was going to be a difficult ride, is affirmation of our stubborn optimism.” He feels that the interest in ICER’s work – reinforced no doubt by securing funding, since that’s a success metric no-one can ignore – shows that there can be discussions that can challenge those with power, from manufacturers to doctors. He says that “I have the feeling we are making progress.” There’s still much to do though. The ongoing debate across the globe on value and pricing is testament to that.

It’s also clear that it’s not ICER alone contributing to the debate on value and how best to spend limited health care dollars. Pearson often refers to the public meetings that are key to ICERs work throughout the conversation. Pearson promotes a sense of inclusivity even in a one-to-one setting.

Pearson points out that public meetings discuss the content of ICERs reports, helping stakeholders to consider and weigh up the evidence, but also bring what Pearson describes as “a breathtaking honesty” about trade-offs. Unsaid but clear is that ICER doesn’t want to take the decision, but wants to contribute towards improved decision-making. Although ICER isn’t quite purely positive economics – in the sense that subjective and value-based elements are present even in the framework of ICER analysis – the way Pearson describes ICERs work puts in closer to that end of the continuum than to normative economics.

Evolving value framework

ICER has set out a value assessment framework that underpins their approach (see Figure 1). Hidden behind the overview though is a great deal of complexity; it’s simply difficult to get to a summation of value when it comes to health care and not everyone is going to agree.

Figure 1: The ICER value framework

Source: ICER

Pearson and the ICER team have recognized the complexity and the debate in the value assessment framework and ICER has just published the result of a review of its value assessment framework. This is the result of not only on in-house reflection and work but also from comments and input from others outside of the organization.

Pearson says that much of the criticism was what he expected. Many of the same issues – such as the perception of bias in Quality Adjusted Life Years (QALYs) – apply to the way in which HTA is approached in many countries, and not just the ICER way. It was “the misperception that ICER disregarded patient-reported outcomes” that surprised him.

The backdrop is arguably a push by patients and their representatives away from the generic tools that often underpin QALYs, and instead towards patient-reported outcomes and where those aren’t the same as the outcomes that matter most to patients, other outcomes. That can mean using data not drawn from what is still held by many as the gold standard of the randomized clinical trial (RCT).

Pearson knows that there is still work to do to let stakeholders know about what data ICER is not only open to, but actively generates. He says, “we got letters about ICER only using RCTs.” ICER reports actually don’t exclude other sources of data. For Pearson this means that ICER needs to continually reaffirm its “openness and eagerness” for other sources of data. He’s proud of how ICER has been “working with patient groups to launch surveys to get data from patients ‘just in time’ to go into ICER reports.”

The balance between quantitative and qualitative

Pearson points out how the process of consulting and updating the value assessment framework was “a rollercoaster.” It wasn’t a one off process, but instead one that saw ICER seeking feedback more than once, as their proposals were further developed.

The stages within the consultation allows Pearson to look back and reflect on how “we heard that features of value lie outside of the strict confines of a meta analysis of clinical data and cost effectiveness. What we heard reinforced the importance of other benefits – what ICER refers to as ‘other benefits or disadvantages’ and ‘contextual benefits’ in two distinct domains – to the thinking.” An early message was that stakeholders want these additional benefits to be quantified. Yet when ICER put options forward to how to do this, Pearson notes that, “it became concerning.”

There’s consensus that there are other sources of value, but no consensus on how best to capture them, according to Pearson. That’s arguably where the debate has gotten to internationally too. It also means that the ICER value assessment framework is likely to evolve in future too, as new methods and processes are developed and consensus built over time.

Value-based price benchmarks

A notable difference between ICER and many other HTA agencies is that ICER doesn’t only pronounce on cost-effectiveness, but goes further. ICER publishes value-based prices. These are the prices that would be needed in order for the drug to meet a given cost-effectiveness threshold. It’s not a single value-based price, but instead – and as a direct function of having more than one cost-effectiveness threshold – there are at least two, if not more. ICER reports benchmark against a cost per QALY threshold of US$100,000 to US$150,000.

Pearson explains the simple reason ICER decided to go as far as specifying the price at which a drug would offer value for money. He says, “we were often asked what is the right – or fair - price?” He recalls that before looking at Sovaldi – a breakthrough treatment for Hepatitis C with an initial price tag of US$1,000 a pill – he didn’t have an immediate answer. That’s not because it wasn’t there in ICER’s work before, it just wasn’t clearly identified. Pearson realised that ICER would be asked this question a lot and not just for drugs like Sovaldi, so thought it should just as well be made clearer in ICERs work.

Setting out a more explicit value-based price benchmark has been a key change in ICERs approach, as was bringing forward the timing of reports. If ICER wants its reports to contribute to decision-making, Pearson knows that they need to be available at or near to FDA approval. That’s just when insurers and others need to take a view on what to do about a newly approved drug.

Looking into the ICER black box

Pearson doesn’t shy away from responding to the criticism put to ICER about the lack of transparency of their approach. He says, “it’s reasonable to request that the basics of an approach to make a judgement on fair pricing should be open to scrutiny.” He also knows that how to provide the transparency that critics call for isn’t simple. It’s not just ICERs policies and decisions, but also related to the rules set by universities.

The aim, not yet realized, is “to develop a platform to allow people access to what they need to be able to scrutinize ICER models” says Pearson. Pearson knows that not everyone has been able to replicate the results that ICER has published to date, but he’s reassured that for the last four reports “manufacturers have told me that they have been able to replicate our findings.”

Going beyond price and into payment

Pearson is well aware that the solution to rapid access to new drugs doesn’t lie with price alone. He points out that ICER has faced the situation where their analysis has suggested that a drug won’t even be cost-effective when given for free. It’s also true that even if a drug has a price that is considered value for money it may still prove to be unaffordable for the health system. It’s an area where he thinks that there could be a change to the payment side that could make the difference, “we need to think about the payment side. It doesn’t actually change the value assessment, but instead about ways to actually pay. That might be an instalment plan or an outcomes based approach.” Such thinking will challenge payers – manufacturers too - but may be crucial to strike a balance between price, affordability and access in the future.

What difference does ICER make anyway?

What difference does ICER make anyway? This is a key question; if ICERs work makes no difference, then the time and effort and money could have been better spent. Pearson says that “we’ve been using informal surveys, emails to payers, and scan the media for how our work is used.”

Anecdotal it may be, but Pearson suggests that “we have a pretty good idea that the use of ICER reports has been growing.” Pearson, as you’d expect, also regularly meets with payers. Those conversations suggest to Pearson that whilst ICER reports are never the sole driver for decisions, they are useful.

Payers have said to Pearson that ICER reports reinforced what they were thinking and even “stiffened their spine”. It’s not just that ICER reports may have perhaps taken the shine off some new drugs, but have gone the other way and offered new insight to long-term value. Pearson says that, “it’s interesting that payers tell us that ICER reports have given them the idea that a drug is more valuable, more often than the other way round.”

Just as Pearson talks about payment issues too, payers have told him that ICER reports have opened up thinking about outcomes based approaches.

In future ICER will also be able to draw on the newly introduced questions that are asked when people want to download an ICER report. People are being asked about their perspective as well as their intended use of ICER reports. That’s data that Pearson says he is “looking forward to seeing.”