Thank You For Your Service? VA-ICER Partnership Breaks Shulkin's Promise to Veterans

  • by: Robert Goldberg |
  • 10/27/2017

In testimony as the nominee to be Secretary of the Department of Veterans Affairs, Dr. David Shulkin promised: “There will be far greater accountability, dramatically improved access, responsiveness and expanded care options…. If confirmed, I intend to build a system that puts Veterans first and allows them to get the best possible health care wherever it may be – in VA or with community care.”
Sadly, less than five months into his appointment, Dr. Shulkin’s promise was broken when The VA’s Pharmacy Benefits Management Services office (PBMS) started partnering with The Institute for Clinical and Economic Review(ICER) set drug prices and limit veteran access to new medicines. 

According to ICER, the VA PBMS will use its “drug assessment reports in drug coverage and price negotiations with the pharmaceutical industry.”  But given ICER’s disregard of how patient’s value medicines the partnership has generated legitimate concern

The program’s directors - C. Bernie Good, Tom Emmendorfer and Michael Valentino recently churned out an incoherent and fact-free response to criticism of the partnership on the Health Affairs blog.  They defended the ICER partnership as contributing to the VAPBMS unsurpassed ability to provide the best medicines at the lowest cost.   They also claimed, with a straight face, that the VA health system provides better care than any other place.   As anyone who has read the book "Thank You For Your Service" or seen the movie version knows, quite the opposite is true.  And frankly, the "everything is perfect" tone of their blog suggests that they are more interested in sucking up to professional critics of the pharmaceutical industry then they are in helping making wounded warriors whole.  

In fact, ICER and VAPBMS are clearly more interested in using the VA as a model for determining drug prices and access nationwide.    The authors insist ICER evaluations will only be used to help the VA  authors set prices for new drugs.  That's nonsense.  The VA pharmacy benefits program already sets prices and restricts access to new medicines.  Under federal law, drug companies must the VA a price at least 24 percent lower than the best private sector price.  They also must give the VA rebates if prices go up more than inflation.   

So what is ICER's role likely to be? The authors assert that as “a federal organization, the VA lives within the reality of a fixed annual budget. Money spent well for high-value drugs (regardless of the overall individual cost of that drug or technology) is a good thing.” 

But that is not how the VA or ICER approaches access to new medicines. Apart from mandated price controls, the VA excludes some drugs and not others to get additional discounts.  This is an approach ICER has supported since its existence.  

Despite the authors' support of high-value medicines, the VA as consistently limited access to them at a great cost to patients.  A study by economist Frank Lichtenberg found that not only were 20 percent of drugs approved since 2000 covered by the VA and that the limited access was associated with lower life expectancy over age 65 compared to Medicare.  The innovation gap has grown since then.  Less access means more death. 

Indeed, since Lichtenberg did his study, the innovation access gap has gotten worse. A recent Avalere study found that "The VA National Formulary covers 54 percent of drugs on the California public employee retiree plan formulary, including 46 percent of brand drugs (102 of 222) and 61 percent of generic drugs (174 of 287.) " And it covers 50 percent few medicines than most state Medicaid plans. 

Yet, the authors claim lots of people get access to drugs not covered under the VA formulary.  Also, untrue. Getting a drug that is not on the formulary is difficult.  Most reviews are denied and over half take two weeks to process.  Veterans often have to travel hundreds of miles to get the medicine from a VA pharmacy.  

Indeed, the Inspector General's audit of the death of a lung cancer patient at a VA Southern Nevada Health System found that” patient had to travel 30 miles each way from his home to a system clinic for pharmacist review and approval of his physical prescription. " It took 14 days to get an off-formulary medicine approved.  In the meantime, the patient had to pay $4000 out of pocket for drugs.

ICER will only make the VA’s denial of timely, effective treatment worse, if that’s possible.   In the past, ICER reports have been used to limit access to cures for hepatitis C, drugs that reduce the risk of heart attacks and a wide variety of medicines for people with rare cancers.   ICER’s estimate of the value of medicine is so low that many of the drugs used to treat HIV would have been rejected by the group. 

The authors claim that VA patients get faster and broader access to HCV drugs than commercial patients.  But until this year, the VA used the ICER guidelinesto limit access to a cure.    As a Newsweek article reported, a VA memo recommended treating those with advanced liver disease but holding off for patients with mild cases of the illness.  ICER’s recommendations are meant to save money, not save lives.  And when the VA started paying for drugs, cure rates went up.  

New medicines are what reduce the total cost of care and mortality. Price concessions and budget caps obtained by limiting access come at the expense of the most vulnerable and sickest people. If the VA uses ICER’s rationing scheme it will not only break Dr. Shulkin’s promise, it will darken and damage the lives of those veterans who need the VA the most.  


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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