Blog | 5/17/2023

Impact of the Institute for Clinical and Economic Review (ICER) on Cell and Gene Therapy Pricing and Access

By Tom Fitzsimons, Ned Wydysh, and Vivek Mittal


 In contrast to most other developed countries, the United States does not have a defined national health technology assessment (HTA) program with the ability to enforce pricing and access decisions for drugs and other health technologies. The lack of a predominant government-affiliated HTA organization is partly a product of a decentralized insurance system. In this system, public and private payers are given free rein to make their own coverage decisions as well as negotiate pricing and rebates directly with manufacturers. In the absence of an overarching governmental HTA body, the Institute for Clinical and Economic Review (ICER) has emerged as the leading authority on the economic valuation of prescription drugs as well as other therapies and innovations, earning the moniker of the nation’s “drug pricing watchdog.”

ICER operates as an independent, non-profit NGO that publishes assessments evaluating clinical and economic evidence to help inform at what price a particular therapy is cost-effective. Despite the watchdog title and HTA classification, ICER’s assessments are not enforced by any specific regulations, and instead publicly provide points of reference and value thresholds that are utilized by parties involved in drug price negotiations. ICER generally publishes reports on specialty drugs and novel, relatively expensive therapies. Unsurprisingly, cell and gene therapies (CGTs) are often selected for assessment by ICER. The high price tag, coupled with the potentially curative nature of some of these therapies, raises big questions surrounding fair valuation.

As CAR-Ts and other cell therapies gain traction, and we approach our first approval of therapies leveraging CRISPR gene-editing technology, CGTs continue to be at the forefront of novel therapeutic development. With CGTs consistently breaking list price records, ICER continues to weigh their clinical impact on patients with economic impact on payers and providers. The extent of ICER’s impact on drug pricing, specifically for intrinsically expensive CGTs, remains to be seen. In this post, we aim to explore if ICER assessments demonstrably have a substantive impact on drug pricing decisions and coverage today, as well as how the organization’s influence might evolve moving forward.

Pricing and Access Challenges for Cell and Gene Therapies

With the promise of CGTs that are curative, or able to vastly improve existing standard of care, comes increasingly high price tags. The U.S. healthcare system has successfully absorbed the cost of Novartis’ $2.1MM SMA gene therapy Zolgensma, but payers are now grappling with granting coverage to a number of other approved or anticipated single-use therapies that are increasingly expensive, such as bluebird bio’s $2.8MM Zynteglo for beta thalassemia, CSL’s $3.5MM Hemgenix for hemophilia B, and BioMarin’s Roctavian, which is still under FDA review for treatment of hemophilia A.

In an interview with Fierce Pharma, ICER’s President, Dr. Steven Pearson, echoed this concern: “We have to figure out how we don’t fall into the same hole where every orphan drug is $300,000. I don’t want it to be every gene therapy is $3 million. We have to be able to distinguish what’s really bringing value and what’s not.”1

This concept of distinguishing fair value is challenging when dealing with single-use CGTs in relatively rare indications where standard of care is costly and unmet need remains high. Historically, orphan and ultra-orphan drugs have been priced at a premium compared to non-orphan drugs, with manufacturers often inflating prices above cost-effective thresholds. In such small patient populations, payers have been fairly amenable to higher drug prices as long as coverage expenses remain in-line with health care expenditure budgets. Although a value-based approach to pricing is undeniably a step in the right direction, calculations of cost-effectiveness thresholds that rely on inflated standard of care costs can pass on these price distortions to the next generation of therapies. Today, in hemophilia A where standard of care remains very expensive, conventional methods of calculating value-based cost savings could theoretically justify a price for a one-time curative therapy to be in excess of $10MM.2 Roctavian is currently priced at €1.5MM in Germany and, even in the U.S., will not have a list price near $10MM if approved. However, it does highlight the need for more nuanced approaches to calculating value-based prices.

It is also necessary to address the fact that payers are not actually paying full list price for these therapies due to negotiated rebates, discounts such as the 340B program, and value-based payment models. The latter of which, acts as a kind of warranty in which the full cost of treatment is only covered if certain patient outcome benchmarks are met. This approach is becoming increasingly popular with CGTs. In the case of bluebird bio’s Zynteglo, bluebird will reimburse payers up to 80% of the cost of therapy if a patient fails to achieve and maintain transfusion independence for at least two years after the beta thalassemia therapy is administered.3 Still, the disparity between list and net pricing continues to grow in the U.S. with the gross-to-net bubble exceeding $200B in 2021.4 This lack of transparency between what manufacturers initially charge and what payers eventually pay highlights the uniqueness of the U.S. situation and contributes to additional challenges when it comes to fair drug pricing.

ICER Assessments and Approach to Pricing

To date, ICER has published assessments on almost 100 indications and associated therapies. Since 2017, these assessments have leveraged the organization’s proprietary Value Assessment Framework to standardize and guide evidence generation and analyses:


The framework itself “seeks to inform decisions that are aimed at achieving sustainable access to high-value care for all patients, [requiring] consideration of two general concepts: long-term value for money and short-term affordability.” When calculating incremental cost effectiveness, ICER follows universal academic and health technology assessment standards by using cost per quality-adjusted life years (QALYs) as primary measures of cost-effectiveness.5 Cost-effective thresholds (CETs) are calculated by determining at what prices widely accepted benchmarks of $100,000 and $150,000 per additional QALY can be achieved. This post will not dissect ICER’s framework in greater detail, but additional information on the Value Assessment Framework can be found on the ICER website. 

Critics of ICER’s methodologies argue that reliance on a QALY-based approach increases the threat of manufacturers raising prices on therapies previously deemed cost-effective in order to align with the upper end of determined thresholds. Much of this can be combatted, however, as long as ICER continues to take a nuanced and situational approach to its assessments, especially in the case of novel CGTs.

Others believe that the vast majority of ICER assessments find drugs to be overpriced and that the organization’s purpose is merely to reduce drug prices indiscriminately. However, across all assessed therapies, more than 25% had a price (net of rebates and discounts) that fell within ICER’s recommended health-benefit price benchmark (HBPB) range.6 ICER asserts that its goal is not to lower drug prices across the board, but rather stop overpayment for treatments that do not offer as much benefit for patients, while continuing to incentivize transformational innovation. This is a laudable sentiment and, in the case of CGTs, does appear to be valid. A comparison of ICER’s published pricing recommendations for notable single-use gene therapies and CAR-Ts can be seen in the table below:



From the above data, ICER takes a situational approach to its assessments of various interventions and has found several CGTs to be cost-effective in the past. It should also be noted that reports provide a snapshot of the situation from the time they are published. The significant variance between CAR-T valuations in 2018 and 2021 can be attributed to several factors including differences in standard of care costs across indications, evolving lines of treatment for each intervention, level of available clinical data, and RWE. ICER also revisits some of their analyses and provides formal updates to already published assessments. In the beta thalassemia report, ICER noted that Zynteglo could be cost-effective up to $2.77MM depending on which cost offset benchmarks were used.7 Likewise, the hemophilia A and B assessment states that Hemgenix “transitions from not being cost effective at $150,000 per QALY to being a dominant treatment at 7.5 years at a price of $3,500,000,”8 indicating that final valuations will be heavily dependent on the determined durability of the therapy.

As a whole, ICER’s assessments of CGTs do not indicate a concerted effort to lower prices across the board or inflate prices for all novel modalities. Instead, ICER indicates relatively strong support for individual CGTs that can significantly improve quality of life for patients or dramatically reduce the cost of standard of care. That being said, assumptions will be tested as CGTs accrue more data, and pricing assessments will need to be continually updated as the space evolves and grows.

Perceptions of ICER Utility Among Payers

As evidenced by the evolving landscape for pricing and access of CGTs, there is little doubt that ICER as an organization provides value in its assessments of these novel therapies. However, quantifying the influence that ICER has on coverage decisions and pricing negotiations remains difficult. ICER itself states that “Major public and private payers—including state Medicaid agencies, the Department of Veteran’s Affairs, more than 75% of private insurers and PBMs, and multiple employer coalitions—now use ICER’s assessments to inform formulary decisions, coverage criteria, and price negotiations.”6 Although this sounds impressive, ambiguity surrounding the level of impact this has on downstream pricing decisions remains.

A recently published survey on the impact of ICER assessments on payer decision making, provided some additional insights into payer perceptions of ICER and the use of its value assessment tools. Survey respondents (n=51) all held senior positions at established health plans, pharmacy benefit managers, or integrated health delivery systems.

Interestingly, ICER’s Value Assessment Framework was seen as the most useful value assessment tool among the 5 provided options. 90% and 82% of respondents found ICER’s tool to be at least ‘somewhat useful’ for informing formulary decisions and pricing negotiations, respectively9:


When asked about use cases for different therapeutic types, respondents noted that the most prevalent use of ICER reports was in high-cost drugs or disease states (78%) followed by rare/orphan disease states (71%) and oncology/hematology (67%).

An earlier 2019 survey that looked at payer reliance on ICER assessments also supported the above findings. In this survey, 65% of respondents (pharmacy and medical directors) believed that ICER cost effectiveness reviews were ‘likely’ or ‘extremely likely’ to function as a benchmark in price negotiations. 100% of respondents also agreed that ICER’s influence in the pharmaceutical industry was likely to grow in the following five years, with 36% stating that ICER would be ‘much more’ influential.10

Evidence of ICER Impact on Pricing Decisions to Date

Payers are increasingly leveraging ICER assessments as benchmarks during pricing negotiations. However, the question remains if and how this directly translates into significant adjustments in manufacturer pricing decisions. In 2017, the Veterans Affairs Pharmacy Benefits Management Services (VA PBM) entered into a collaborative relationship with ICER. This partnership has since offered some interesting case studies that provide insights into the influence ICER’s value assessments have on pricing and access.

In the case of PCSK9 inhibitors, Praluent and Repatha, both drugs were approved by the FDA in 2015 and priced at over $14,000 annually. At this price point, and with a large addressable patient population, the cost of treating all eligible patients for five years exceeded $600B. The VA and other payers imposed restrictive prior authorization criteria and cost-sharing requirements, leading to over half of prescriptions being rejected. In anticipation of new clinical trial results being published, Sanofi and Regeneron proactively worked with ICER to determine value-based price benchmarks for Praluent. ICER published an assessment based on the new data and provided an updated cost-effective price range of $4,800-$8,000 for Praluent in higher-risk patients.11 In response, payers were able to negotiate lower prices within this range and the VA designated Praluent as the preferred therapy over Repatha in this class of drugs.  

Critics of the VA ICER partnership often argue that access to life-altering therapies will be limited or refused if the therapy is deemed not cost-effective by ICER. However, the VA and payers more broadly have taken a case-by-case approach to coverage of ICER reviewed therapies. One example that contradicts this assertion is the VA’s coverage of tardive dyskinesia medications. In 2017, ICER published an assessment on VMAT2 inhibitors Ingrezza and Austedo, calling for WAC discounts of 85% and 90%, respectively to reach accepted CETs. The VA does not list these medications on its official formulary, however, the medications are frequently covered through prior authorization by providers. In fact, prescriptions filled for both drugs heave steadily increased since the ICER report was published in 2017.12

Another more recent example of the VA straying from ICER guidance is its decision to cover the recently approved Alzheimer’s medication Leqembi. Eisai listed the drug at an annual price of $26,500 which represents a 19% premium over the upper range of ICER’s updated assessment of the drug’s CETs. In January of this year, Leqembi received an accelerated approval from the FDA, however, full approval is not expected until early Q3 of this year. The VA’s coverage of Leqembi is divergent from CMS’ decision not to cover the drug until full approval or adequate additional clinical data is published. The existing coverage of Leqembi highlights a broader pricing and access climate in the U.S. where decisions ultimately remain in the hands of individual payers.

ICER’s assessments of Alzheimer’s therapies are viewed as somewhat fluid in such a rapidly evolving market, evidenced by Leqembi’s wide HBPB range at $8,900 - $21,500 annually.13 The FDA’s decision on Eli Lilly’s donanemab will also inevitably have an impact on these benchmarks. ICER stresses that these reports are iterative and updated as new information emerges, but it still begs the question of when final ICER assessments can and should be relied on for pricing and access decision-making. In the aforementioned 2019 survey, over 60% of payer respondents agreed or strongly agreed that manufacturers were preparing for ICER assessments more proactively and in earlier phases of development:


ICER’s assessments are initially released publicly as “Draft Evidence Reports,” after which, the organization fields input from manufacturers, payers, patients, clinical experts, and other stakeholders. After comments are publicly discussed and considered, the final report is published. In 2019, an independent review found that of 256 comments from manufacturers calling for ICER to revise its analysis, 35.5% caused ICER to revise its assumptions, but only 2.0% caused ICER to revise its conclusions.14 However, soon after this review was published, ICER pulled its draft report on JAK inhibitors and reversed its stance on AbbVie’s Rinvoq. After reviewing stakeholder input, ICER revised some of its assumptions and calculations, which notably brought the cost burden of Rinvoq below the $150,000/QALY benchmark.  

ICER’s Influence Moving Forward

While most past case studies do not involve CGTs, many of the same principles and findings can be applied. CGTs are a relatively nascent development and, up to this point, have been reviewed relatively favorably by ICER. Additionally, the CGTs with the greatest sticker shock are in indications with poor standard of care and very small addressable populations. However, as more CGTs come to market in larger indications, payers will increasingly look to leverage ICER assessments and pushback on therapies where price tags are not commensurate with improved outcomes. ICER has already published a draft report on two highly anticipated therapies in sickle cell disease (SCD), lovo-cel and exa-cel. SCD represents a larger patient population when compared to other approved single-use CGTs. For this reason, the pricing of these two drugs will likely draw additional scrutiny from payers and set the stage for evaluating ICER’s influence over pricing and access in this class of therapies.

At a macro level, we still see that payers do not universally align with ICER’s recommendations and frequently decide to defer to internal analyses on a case-by-case basis. The organization has also only assessed a fraction of approved therapies and maintains no regulatory oversight or ability to directly dictate pricing. Instead, the organization relies on payers and their negotiating strategies to indirectly influence pricing and access when value is not being achieved. This overall structure is not likely to change any time soon in the U.S., and with increased awareness will come questions surrounding the organization’s independence, the widespread applicability of its methodologies, and the reliability of its claims.

Despite these limitations, it is evident that payers are increasingly leveraging ICER value assessments to negotiate pricing and access with manufacturers. Manufacturers are also engaging with ICER earlier in a drug’s lifecycle to strategically plan for these negotiations and shape the value conversation. In the examples of PCSK9 and JAK inhibitors, proactive engagement with ICER proved to be a powerful differentiator in highly competitive markets. These trends are expected to continue as the organization grows and develops tools like its ICER Analytics platform, which aims to make evidence reports even more accessible and integrated with stakeholders’ own processes.

As the organization continues to gain trust across the industry and refine its approach, we expect to see its assessments used as validated benchmarks in progressively more pricing and access negotiations. ICER will continue to prioritize reviews of CGTs, and developers who are able to best articulate the full value of their data packages, not only to ICER but all stakeholders, will find the most commercial success. CGTs with strong clinical benefit will be rewarded for the value they bring and ICER will continue to support innovation that benefits patients.



Tom Fitzsimons is a Senior Analyst and member of Health Advances’ Cell and Gene Therapy Practice
Ned Wydysh is a Vice President and co-leader of Health Advances’ Oncology and Cell and Gene Therapy Practices
Vivek Mittal is a Partner, Managing Director, and co-leader of Health Advances’ Oncology and Cell and Gene Therapy Practices

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