Business & Tech

Watchdog group will review prices of all new drugs

Steven Pearson, head of the Institute for Clinical and Economic Review, said grant money “puts us on a new trajectory.”
Jonathan Wiggs/Globe staff/File
Steven Pearson, head of the Institute for Clinical and Economic Review, said grant money “puts us on a new trajectory.”

A Boston watchdog group focused on “value-based” drug pricing will expand its scope to review all new medicines, as well as price increases on existing treatments, under a new grant.

The nonprofit Institute for Clinical and Economic Review said the three-year, $13.9 million grant from the Laura and John Arnold Foundation will allow it to nearly double its staff to about 40 researchers, clinicians, and health economists.

At a time when scrutiny of drug prices is intensifying, the goal of the group, known as ICER, is “to provide an independent source of information and analysis so we can get prices more in line with the underlying value to patients,” said its president, Steven D. Pearson.

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Tapping a $5.3 million grant awarded by the Houston-based Arnold Foundation in 2015, the watchdog institute has over the past two years published a series of reviews of new prescription drugs that treat conditions ranging from high cholesterol to congestive heart failure. While companies have typically agreed to participate in the reviews, ICER has found in most cases that the drugs have been priced above what it has deemed a fair value range.

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But until now, ICER hasn’t had the resources to review all new medicines. The additional funding “puts us on a new trajectory,” Pearson said. “Now we’re going to be able to cover the landscape.”

Going forward, Pearson said, ICER will try to begin its reviews about 7½ months before the date the Food and Drug Administration is anticipated to rule on a drug candidate. The reviews would be made public around the time a company sets the price of a newly approved medicine and health insurers decide whether to cover it.

While drug companies aren’t bound by the reviews, insurers and consumer groups increasingly are citing ICER’s “value frameworks” in negotiating how much they will pay.

Pearson said ICER’s staff also will begin examining the rationale drug companies use in determining whether to raise the price of drugs already on the market. Drug makers will be invited to take part in the review process.

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“It’s generally been a very collaborative working relationship,” Pearson said of ICER’s interactions with manufacturers. “But they might not agree with our findings.”

Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.