Candidates Target Pharma - Pharmaceutical Executive


Candidates Target Pharma

Pharmaceutical Executive

A key factor driving the clamor for CE is the emergence of new biotech therapies and medical diagnostics with potential to improve public health and save lives—but at very high prices. The promise is that effectiveness data will target new medical technology to patients most likely to benefit, and deflect calls for price controls and coverage denials.

Pharma companies acknowledge that objective CE research could increase drug utilization and prevent safety problems arising from inappropriate drug use. The industry fears, however, that misuse of such analysis could block rapid acceptance of new treatments. Drugmakers want payers to cover all medicines that FDA deems safe and effective, and keep cost out of the calculations. The Biotechnology Industry Organization (BIO) issued a white paper last year questioning whether CE research methods are sufficiently developed to deal with the complexities of biotech therapies and the wide variation in individual response.

At an April briefing sponsored by the Alliance for Health Reform, David Nexon, senior vice president of medical device association AdvaMed, raised concerns that CE research might be used to support a "cheapest is best" approach. CE studies are "rarely slam dunks," said Nexon, noting that different treatments often work better for different patients.

Yet the fact that more effective (and limited) use of medical technology could save billions of dollars is too attractive for payers and insurers to ignore. It "makes no sense" to establish best treatment processes and then not look at that information when making coverage determinations, according to Karen Ignagni, president of America's Health Insurance Plans (AHIP). While CE analysis might not lead an insurer to deny coverage, a plan could put a more costly drug that lacks clear advantages in a higher formulary tier. Nevertheless, cost must be a consideration. "Taking cost out of the equation is putting your head in the sand," says Ignagni.

Creating a Program

Enthusiasm for CE is boosting congressional support for a quasi-governmental CE research organization distinct from the Agency for Health Research and Quality (AHRQ). This division of the US Department of Health and Human Services has been expanding its CE research portfolio to support coverage and treatment decisions for Medicare and other government health programs. But many CE advocates believe that an independent research organization, less subject to political control, is what the industry needs. A central entity would also reduce duplication of efforts by insurers and private groups developing their own CE data.

Senate Finance Committee chairman Max Baucus (D-MT) is looking to authorize such an entity as part of pending Medicare legislation to delay a cut in payments to physicians. Any legislation adopted this year is likely to establish a "placeholder" to launch the program, and not provide much more funding than the paltry $15 million that currently supports the AHRQ program.

Meanwhile, the debate is escalating over how such a research entity would operate. Key issues are who controls and pays for the program, what treatments it would evaluate, and what standards would provide a basis for analyses. CE research appears to be more an art than a science, with big differences in how economists value "quality of life years" and other data.

Drug and device makers want CE studies to deal with total healthcare delivery, not just medical products; they want a seat at the table in setting research priorities, standards, and methods. The National Pharmaceutical Council (NPC) is positioning itself to represent pharma interests in the debate, with a new focus on how best to conduct and utilize evidence-based analysis in making drug coverage decisions.

What remains clear is that while CE advocates say they will focus on effectiveness and tiptoe around the spending issue, cost management will be central to the success of any CE research program.

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

Savings Elusive

To pay for reform, the 2008 Presidential candidates are all proposing to make the US healthcare system more efficient through increased preventive care, coordinated care for high-cost patients, reducing obesity and smoking, and less emergency care. Unfortunately, these "soft" strategies require resources, and savings are elusive. Electronic health information systems can eliminate errors, but are very costly in the short term. Chronic care coordination and disease management promise to improve quality of care, but generate added costs as well as savings. Universal coverage may be more equitable, but it's costly because insured individuals tend to spend more on health services. Even the CE research institute everyone wants has an initial price tag of at least $200 million.

However, real cost-cutting measures—such as higher consumer cost-sharing, benefit curbs, cuts in provider fees, and limits on access to new technology—are not popular with voters, so they don't make it into stump speeches.


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