Value Assessment Framework

The ICER value framework describes the conceptual framework and set of associated methods that guide the development of ICER evidence reports.  The purpose of the value framework is to form the backbone of rigorous, transparent evidence reports that, as a basis for broader stakeholder and public engagement, will help the United States evolve toward a health care system that provides sustainable access to high-value care for all patients.

The initial framework was developed with input from a multi-stakeholder workgroup that included the perspective of patient advocates, clinical societies, life sciences companies, pharmaceutical benefit managers, and insurers.  All participants provided input into the development of the value assessment framework but none should be assumed to approve of its approach.

In 2020, ICER received feedback from 60 stakeholder organizations during an open call for suggested revisions, and from 41 organizations after ICER posted proposed revisions for comment in August 2019, which are woven into the final document.

The next update cycle is planned for 2023.

Dr. Steven Pearson presents ICER’s updated Value Assessment Framework. 
Click here to download the updated slide deck.

Read ICER’s  updated value assessment framework here.

Potential Budget Impact Threshold Updated for 2019-2020

ICER is committed to ensuring its methods and processes are aligned with current information on the health care environment in the US. In May 2019, ICER decreased its annual budget impact threshold for prescription drug therapies from $991 million to $819 million. This update reflects the increased rate of FDA approvals, as well as new estimates for US medical spending, pharmaceutical spending, and gross domestic product (GDP).

When annual US spending on a specific drug is likely to exceed this threshold, ICER’s report will highlight potential short-term affordability and access challenges. The report will also include the maximum percentage of eligible patients who would be able to receive the therapy, at multiple possible price points, without exceeding the threshold.

The budget impact threshold will continue to be calculated as double the average net budget impact that would contribute to overall health care cost growth exceeding the anticipated growth in the US economy. Updated calculations with sources for data are shown below.

1Growth in US GDP, 2019 (est.) +1%3.5%World Bank, 2019
2Total personal medical health care spending, 2018$2.95 trillionCMS National Health Expenditure, 2019
3Contribution of drug spending to total health care spending (%)
(Row 4 / Row 2)
4Contribution of drug spending to total health care spending, 2018$498.6 billionCMS National Health Expenditures, 2019 Altarum Institute, 2018
5Annual threshold for net health care cost growth for ALL drugs
(Row 1 x Row 4)
$17.4 billionCalculation
6Average annual number of new molecular entity approvals, 2014-201842.6FDA, 2019
7Annual threshold for average cost growth per individual new molecular entity
(Row 5 / Row 6)
$409.6 millionCalculation
8Annual threshold for estimated potential budget impact for each individual new molecular entity
(Doubling of Row 7)
$819 millionCalculation

Adaptation of the ICER value framework for the assessment of treatments for ultra-rare conditions

ICER’s modified framework for ultra-rare conditions is the culmination of a nine-month public process of engagement with the rare disease patient community, the life sciences industry, and US health care payers. As part of this process, ICER published a white paper discussing the evidentiary and ethical challenges associated with evaluating treatments for rare conditions, hosted a multi-stakeholder policy summit, and accepted public comment from more than 50 organizations and individuals regarding an initial proposal of framework modifications. ICER looks forward to ongoing input from the entire stakeholder community and launched a formal update to these methods in 2019.

ICER is aware that questions are being raised about the best way to assess the cost-effectiveness and calculate value-based prices for emerging treatments that are considered to be potential cures.  Some would argue that potential cures offer benefits incompletely captured by traditional utility measurements related to the added well-being patients and families realize from being “free” from disease.  Many have noted that cost-effectiveness analyses of potential cures are particularly sensitive to assumptions about the durability of clinical benefit beyond the available short-term data.  And others have raised concerns that, without some modification, traditional cost-effectiveness methods would assign an unrealistically high price to a potential cure for conditions such as hemophilia or some cancers currently associated with very high lifetime treatment costs.

Given these issues, ICER will continue to seek input from all stakeholders on the key assumptions that will be used to guide the base case cost-effectiveness analysis in any review.  If a potential cure is selected for review, ICER may also consider various novel approaches to address the issues described above.  In order to produce reports that can be most useful to inform policy making, ICER may therefore test and implement new methods for calculating value-based prices for potential cures.

The 2017-2019 Value Assessment Materials are now out of date, but for reference they are included below: