Comparisons and Costs

Nov 01, 2010

Jill Wechsler
The federal government is poised to invest some $500 million a year in comparative effectiveness research (CER) studies, funded and managed by the new Patient-Centered Outcomes Research Institute (PCORI), as required by the Affordable Care Act (ACA) enacted last March. PCORI now has a chairman and board representing all stakeholders, who will take on the daunting task of setting the national CER agenda, developing systems for funding research, establishing standards and methods for comparative studies, and devising programs to disseminate results to practitioners and to the public.

Even though Republicans initially supported comparative research as a way to improve health care decision making, last year they raised the specter of rationing and "death squads" in their effort to kill health reform. Pharma companies and patient advocates support CER generally, but remain wary that government-funded studies will steer health coverage decisions towards low-cost remedies and away from innovative products. In response, manufacturers seek to shift the focus away from drug-drug comparisons and towards the more difficult task of evaluating medical procedures and methods of care. Personalized medicine advocates, moreover, are pressing for CER to consider treatment effects on patient subpopulations, including minorities, children, and individuals with rare conditions—and not what works best in the average patient. Yet, designing studies that are able to detect such differences is tricky and may increase the scope and cost of research.

Gail Wilensky, senior fellow at Project Hope, says she's "cautiously optimistic" about the program's progress so far. But she acknowledged at a recent CE Summit in Washington that CER remains a "very fragile concept" that "a lot of people still want to torpedo."

Launching PCORI

Considering costs
CER, or health technology assessment, has been around for years, funded largely by the National Institutes of Health (NIH) and public and private payers seeking to identify more effective medical products and practices versus those that are inappropriate or even harmful. New drug costs and effectiveness are a ready target, particularly for the UK's National Institute for Health and Clinical Excellence (NICE) and the University of Oregon-based Drug Effectiveness Review Project (DERP).

The federal government became more involved in this field when it established the Medicare drug benefit in 2003 and authorized additional funds (nearly $150 million over the last five years) for the Agency for Healthcare Research and Quality (AHRQ) to fund systematic reviews of treatments for conditions largely affecting seniors. The 2009 federal stimulus bill (American Recovery and Reinvestment Act, or ARRA) dramatically advanced federal support for CER by providing $1.1 billion for the Department of Health and Human Services to set priorities for and fund comparative studies, primarily through NIH and AHRQ.

This year's health reform legislation built on ARRA by establishing PCORI as an independent, non-profit organization. The program's annual budget, estimated at $500 million by 2015, will be funded largely by a 1 percent tax on health insurance premiums—a strategy designed to provide more stability and predictability for the initiative by insulating it from the highly political Congressional appropriations process.

PCORI's 21 board members, who were announced by the Government Accountability Office (GAO) in late September, represent payers, providers, patients, and industry. NIH director Francis Collins and AHRQ chief Carolyn Clancy are on the panel, but do not chair it; that honor goes to UCLA vice chancellor and dean Eugene Washington, with Steven Lipstein, president of the non-profit BJC Health Care system, as vice chair. Industry reps include Pfizer senior vice president Freda Lewis-Hall, Medtronic senior vice president Richard Kuntz, and Harlan Weisman, head of medical devices and diagnostics at Johnson & Johnson.

"This is not the list of usual suspects," commented National Pharmaceutical Council president Dan Leonard on the PCORI board makeup, which is listed with full bios in an excellent NPC resource guide (found at All the board members are highly qualified and reflect diverse backgrounds, but are not regulars on the busy CER conference circuit.

The board's composition reflects industry's success in gaining a seat at the table, and in ensuring PCORI's independence and transparency. The Institute is expected to award many of its grants through NIH and AHRQ to take advantage of their peer-review and research infrastructure. But before it can start funding projects, the board has to hire a staff, set up offices, and craft a charter for operations.

Almost as important as the structure of PCORI is the role of its methodology committee, which GAO is slated to name shortly. That committee's assignment is to define appropriate CER study designs and methods and submit a report with recommendations in only 18 months. The panel will weigh criteria for internal study validity, generalizability, feasibility, and selection of appropriate comparators. The task of determining strengths and weaknesses of observational studies versus randomized controlled trials (RCTs) is sure to ignite debate on the value of "pragmatic" clinical trials, the ethics of conducting RCTs on marketed therapies, and design of studies with multiple subgroups. Ideally, the process of establishing common definitions and evidentiary standards will link the many diverse guidelines and methods already adopted by various agencies and payers.

An important consideration for pharma is whether the demand for more information on how drugs work in real-world settings will expand the scope of data needed to bring new products to market. FDA does not require comparative or cost information to approve a new drug, although some foreign regulatory authorities do, and patient advocates would like FDA to follow suit. Sponsors now regularly include comparative and clinical-use measures in preapproval trials to meet demands of private payers, and decisions on advancing from Phase II to Phase III studies increasingly weigh the feasibility of gathering evidence of product value during development. Adoption of CER methods and standards by PCORI thus is likely to have a broad impact on the design of all effectiveness and outcomes research, from preapproval trials to studies required by FDA as part of postmarketing oversight.

Savings and Support

Whether more comparative research will actually limit healthcare spending remains to be seen. Analysts project that the CER initiative will reduce federal healthcare spending by about $3 billion over 10 years—just about what the government will spend on PCORI. And that calculation assumes that more comparative information will lead to changes in physician practice and patient choice.

For CER results to have the desired impact on the medical community, Harvard Medical School professor Jerry Avorn proposes that PCORI support "academic detailing" and "social marketing" of comparative assessments, largely to offset "pharma's hype of newer, more costly products," he commented at a CER briefing last month sponsored by Health Affairs. Avorn also wants FDA to require "relevant comparisons with alternative treatments" in pharma promotional materials, and to crack down on unsubstantiated superiority claims.

Public support for CER is fairly strong, according to recent public opinion surveys, but physician backing for the research is necessary to assuage Americans' fear of mandatory guidelines that could lead to "one-size-fits-all" medicine, policy experts Alan Gerber and Eric Patashnik reported.

An "early win" for the program could come from some of the studies funded under ARRA that should start to yield results. "But CER is not a panacea or a silver bullet," observed Kavita Patel, director of health policy at the New American Foundation. She and others advise PCORI's board to look for some "low-hanging fruit" on the CER priority list that can demonstrate value and how comparative research can accelerate patient access to treatment. ECRI Institute president Jeffrey Lerner observed that it "will take a great deal of work convincing people that CER is in their favor—that it's something they should want."

Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at

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