Rare Disease Day Has No Friend in ICER’s Steve Pearson

  • by: Robert Goldberg |
  • 02/29/2016

Today is Rare Disease Day.  You probably missed the media coverage because there was none. 

That will make Steve Pearson, the founder of the Institute for Clinical and Economic Review(www.ICER.org)  – the so-called drug pricing watchdog – very happy.

That’s because Dr. Pearson believes that public awareness of rare diseases leads us to invest in more and more treatments for even more rare diseases that – in his opinion – will make health care spending ‘unsustainable.’

Or has he put it in an article entitled, “Which Orphans Will Find a Home? The Rule of Rescue in Resource Allocation for Rare Diseases,” there is no apparent obligation to rescue identifiable
rare disease patients based on a duty of rescue within personal morality.”  Rather, he claims that while the impulse to save people with rare diseases is appealing, it is more ethical to restrain that policy because it forces us to spend more money on health care at a time of “permanent” resource scarcity.   

To put it bluntly, Pearson believes groups like ICER can use evidence-based policies to decide who shall live and die, who shall suffer and who shall thrive. 

Let’s set aside the specious assertion that we are running out of money to spend on health care.  Like many Malthusians, the underlying assumption shaping Pearson’s and ICER’s mission is the believe that there is a moral imperative to spend less on health care.  And Pearson, like his Club of Rome predecessors, is gripped by the belief that we can’t take care of all these sick, disabled people at any price otherwise we will have no money for anything else!

Here is Pearson with his pessimism in full flower:

“Increasing numbers of expensive orphan drugs are expected to come to market. In addition,
advances in pharmacogenetics will soon be able to separate many common diseases, such as hypertension, arthritis, cancer, and diabetes, into numerous small and distinct subpopulations of patients with specific genetic profiles. This movement toward “personalized medicine” will
produce increasing numbers of drugs that have been developed to treat small, identifiable patient groups.

Instead of a new blockbuster drug to treat millions with hypertension, new targeted therapies will treat only those few thousand with a particular genetic makeup. As the eligible patient
populations decrease in size, the arguments for accepting higher prices per treatment will turn manageable overall costs into unsustainable ones. As the eligible patient populations decrease in size, the arguments for accepting higher prices per treatment will turn manageable
overall costs into unsustainable ones.”

If everyone has a rare disease, there will be fewer people with a one size fits all diagnosis. So the number of people with an illness will not increase (holding population growth constant.)  That mathematical fact eludes Pearson who insists that all these new orphan drugs will crowd out spending for other health care services.

Similarly, claims of budgetary Armageddon have been overhyped by Pearson.   Between 2007 and 2014,orphan drugs have increased as a percentage of spending on drugs (from about 2 percent to 4 percent in Europe and 5 percent to 8 percent in the United States ) even as  the percentage spent on drugs has remained the same.

What about the impact of the ICER like restrictions Pearson wants to impose?  Indeed, “orphan drugs currently have more coverage restrictions than non-orphan drugs in the United States, United Kingdom, and Netherlands.”  And the United States is less restrictive than other countries. 

The rationing of orphan drugs  does increase suffering and cost lives.  Frank Lichtenberg concludes that between 1999-2007, new orphan drug approvals reduced life years lost to rare disease by 4.2 percent a year.  (Without these new drugs, the number of deaths would have climbed by about 1 percent a year)

In France, which took longer to pay for orphan drugs and paid for fewer relative to the US, the number of deaths declined by 1.8 percent.   

This loss of life is, according to Pearson, the price we have to pay for avoiding scarcity. 
And he believes that a “bright line between what constitutes a fair claim on health benefits and what does not will be difficult to draw.” 

Indeed, ICER sets the cut off point for the rationing required to avoid ‘scarcity.’  It has determined exact numbers of people who will be denied access to a growing array of new medicines. 

The media has hailed ICER’s effort to set drug prices.  But these limits are determined by how valuable ICER thinks a new drug is and by the amount ICER believes should be spent on each new drug a year.  This has led ICER to recommend limits on the use of new medicines – even when they are price at levels that would make their development economically impossible – that ensures some people will suffer and die in order to stick to an arbitrary budget threshold.  Indeed, ICER assumes that a new drug – even a cure – is of lower value to society if it increases cost beyond a certain limit. 

Indeed, Pearson’s bright line is drawn based on the number of people that can be treated and little more.   He says that paying $200K for a rare orphan drug is reasonable if it only helps a small number of patients.  But he concludes that people with the toughest cancers to treat, for whom a small average survival benefit is a breakthrough, are not worth treating.   He claims lung cancer patients shouldn’t stir our compassion because our feelings are simply a response to a patient led PR campaign.  Pearson states: “Although nonsmall cell lung cancer is technically a rare disease, 60,000 patients are diagnosed with the illness each year in the United States. The treatment costs for each individual patient average approximately $80,000, which translates into an expenditure of $4.8 billion dollars per year.  “

Pearson – and ICER – deliberately ignore the fact that average overall survival means very little at time when we can match people to combinations of treatments based on our understanding of how tumors thrive and progress.  But even if they did incorporate it, the cumulative spending on lung cancer patients -- $4.8 billion – is about $3.9 billion more than ICER wants to spend on each new drug.  New immunotherapy drugs double the percent of patients living a year or more with lung cancer.  To Pearson, that’s bad news indeed. 

He, like so many social engineers before him, have assumed that keeping more people alive longer will hurt society as a whole.  But incremental and cumulative advances in medicine, as they are diffused and adopted, leads to greater gains in well-being and economic growth.  
It is precisely our moral sense to save lives in immediate danger and at any expense that sustains humanity and economic progress.  We need more orphan drugs because we gain when more of us enjoy life and live longer. 

Pearson and his ICER are a threat to that prosperity and the remarkable advances in medicine that Rare Disease Day celebrates.  Do we really want to allow someone who belittles such acts of awareness to determine who gets what medicines at what price??


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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