Washington Report: Shop and Compare

Insurers and payers believe that more comparative information on medical treatments will save money and improve care, but such analysis may be costly to pharma
Jun 01, 2007


Jill Wechsler
The comparative-research bandwagon is gathering steam in Washington health-policy circles. Economists and health experts are clamoring for more evidence on how medical products and procedures compare in safety, efficacy, and cost. One aim is to establish a quasi-public research entity to produce more information on the value of different healthcare treatments and services.

Such proposals raise difficult questions about who should conduct comparative analyses, who will pay for them, what standards will apply, and what should be done with the resulting information. Pharma companies are leery of a multi-billion-dollar agency sponsoring comparative studies that Medicare and other payers would use in making product-coverage and reimbursement decisions. And added study requirements could erect higher hurdles for bringing new drugs to market. Yet, even within the industry, supporters believe that the comparative-effectiveness (CE) approach may be preferable to price controls.

The CE research campaign is moving forward on several fronts. The FDA Revitalization Act, which the Senate approved last month to reauthorize FDA user fees and enhance drug safety (see "House Gets FDA Bill,") also strengthens FDA authority to require postmarket comparative studies on drugs and biologics. In the House, Reps. Tom Allen (D-ME) and Jo Ann Emerson (R-MO) have proposed legislation establishing a Comparative Effectiveness Advisory Board to identify and fund high-priority research. Health insurers and government health agencies would support an initial $100 million–a-year budget that would rise to $900 million a year by 2010. Sen. Hillary Clinton (D-NY) is also working on a CE measure, and Senate Finance Commitee Chairman Max Baucus (D-MT) has expressed interest.

In addition, the Medicare Payment Advisory Commission (MedPAC) is recommending in its June annual report that Congress establish an independent entity to sponsor "credible research on comparative effectiveness of healthcare services" for public dissemination. The Institute of Medicine has established the Roundtable on Evidence-Based Medicine to discuss how to improve evidence and its use.

Controlling Costs

The stated goal of these proposals is to improve patient care. But the underlying aim is to contain healthcare spending. US outlays for healthcare are skyrocketing, and insurers and government health programs are looking to adopt evidence-based medicine and pay-for-performance models to gain some control over expenditures. These remedies require more credible information on what works best for treating patients and which new technologies merit high price tags.

MedPAC avoids any specific mention of costs or prices in its CE research recommendation. In discussing the issue at an April meeting, health-policy expert Gail Wilensky of Project Hope said combining comparative and cost-effectiveness analysis at this time would be "the kiss of death," an observation reflecting still-strong political opposition to price controls on medical care. However, panel members acknowledged that CE analysis will be used by insurers and government health programs in reimbursement decisions.

In an article published by Health Affairs last November, Wilensky made the case for a multi-billion-dollar Center for Comparative Effectiveness with sufficient funding to conduct prospective trials on the effectiveness of medical treatments and procedures. This quasi-public entity would assess alternative therapies and procedures, but it would not address costs directly.

Health insurers, however, don't mince words on this topic. America's Health Insurance Plans (AHIP) backs a new CE entity to help patients and clinicians make "value-based healthcare decisions." AHIP wants Congress to give "explicit authority" to the Centers for Medicare and Medicaid Services (CMS) to use this information to set rates for new technologies "more in alignment with the added (or marginal) value of a new technology over established alternatives." Its members hope that other federal and state health programs will do the same.

Insurers also point out that the United States is "virtually alone among developed nations" in lacking an entity dedicated to comparing the effectiveness and value of new drugs, devices, and medical procedures. They and other CE enthusiasts cite the United Kingdom's National Institute for Health and Clinical Excellence (NICE) as a model. NICE reviews clinical and outcomes data to compare new medical technologies. Its cost-effectiveness assessments help national health officials establish clinical guidelines and make coverage decisions. But the process can be lengthy, delaying patient access to new treatments.