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The danger is that effectiveness studies could be used to limit coverage to low-cost products and that additional research requirements for sponsors could be costly
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.
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.
Concerns about the safety and efficacy of COX-2 inhibitors, arterial stents, and other treatments also are fueling the push for comparative assessments of medical products. Additional postmarket studies would help identify unsafe drugs, says AHIP, which supports enhanced FDA oversight of drug safety through its user-fee program. The insurers want to strengthen FDA's authority to require drug-labeling changes and postmarket clinical trials—information that would help plans update formularies and reimbursement policies.
The prospect that CE research can hold down healthcare spending without more sweeping drug cost-cutting has generated support from some pharma companies. Johnson & Johnson executives Kathy Buto and Peter Juhn note in a companion Health Affairs article that comparative studies can help establish the value of medicines, enable marketers to differentiate products, support expanded use of certain therapies, and possibly justify more streamlined approvals and premium reimbursement for "clinically meaningful improvements." Information on good clinical choices, they point out, may be the "best antidote" to government-set prices.
The danger is, of course, that effectiveness studies could be used to limit coverage and treatment options to low-cost products. And additional research requirements for sponsors could be costly. Prospective studies cost hundreds of millions of dollars and are vastly different from relatively low-cost retrospective data reviews, points out health economist Bryan Luce of United BioSource at a March seminar on comparative-effectiveness research sponsored by the Center for Medicine in the Public Interest. He notes a tension between FDA officials and clinicians who insist that data has to come from randomized, blinded, controlled clinical trials to support pharma marketing claims, and healthcare providers and payers who object that such trials don't produce "real world" information and prefer data from observational studies.
The proposed research center could be structured and funded in such a way as to address these issues. Current comparative information often is "incomplete, misleading, or misinterpreted," Buto and Juhn observe, noting that establishing a research entity could improve the situation if the center is independent from payers, maintains transparent processes, invites all stakeholders (including manufacturers) to participate, and coordinates research with other government agencies.
One contentious issue is whether a new CE center should be part of the Agency for Healthcare Research and Quality (AHRQ), which currently leads federal efforts to provide clinical-effectiveness data. The new initiative would build on AHRQ's network of research centers. Even though the Medicare Modernization Act of 2003 boosted funding for AHRQ effectiveness research, the proposed CE center would represent a huge expansion.
Of course, it's not at all clear that Congress will provide even $100 million to launch such an initiative. A Congressional backlash in the 1980s eliminated Congress' Office of Technology Assessment and nearly defunded the predecessor of AHRQ, Luce recalls. The legislators also instructed Medicare officials to keep costs and comparisons out of their assessments of new technologies, and that policy still holds. Medicare's Coverage with Evidence Development policy, designed to obtain additional information on newly approved drugs and medical products, also has drawn complaints about linking new research requirements too closely to reimbursement, and CMS is revising the policy.
To fill the comparative-effectiveness information gap, several organizations have launched their own technology-assessment programs. Oregon's Drug Effectiveness Review Project (DERP) assesses clinical trial data on drug therapeutic groups to inform coverage decisions by managed care plans and state Medicaid programs. Consumer's Union uses the DERP assessments for its BestBuyDrugs program, which adds in drug-cost factors. The Academy of Managed Care Pharmacy (AMCP) recommends that drug marketers include such comparative and economic data in the dossiers they submit to formulary committees.
A new CE center would centralize and coordinate these and other research efforts, set standards for comparative analysis, and oversee dissemination of vetted results to providers, payers, and patients. Variations in patient response to treatments and the desire to link provider payments to quality measures speak to the need for more valid comparative healthcare information. Pharma companies will want to have a say in how the questions are framed and how the resulting data is used.
Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at email@example.com