Health Reformers Seek Effectiveness Data

Health care reform is a high-profile issue in this year's presidential election campaign, and drug access has become a central theme in the debate. The candidates talk of expanding access to generic drugs and to low-cost medicines from abroad. And they're all encouraging comparative effectiveness (CE) research to identify those therapies and treatments with sufficiently high value to warrant high price tags. While pharma companies support CE research in concept, they fear such analysis will lead to inappropriate controls on drug coverage and prices, along with demands for costly additional research.

Jill Wechsler

Both Democratic and Republican candidates have rolled out health reform plans that promise to cover the uninsured while also providing tax breaks and other incentives to help individuals obtain health insurance. The main problem is that these reforms carry multibillion dollar price tags, and proposals to adopt electronic medical records and better coordinate chronic care are not likely to generate any near-term savings.

Consequently, drug prices are a ready target. Sen. Barak Obama (D-IL) promises to provide Americans with access to the "exact same drugs in Europe and Canada" that pharma companies sell at half the price as in the United States. He expects to save up to $30 billion by repealing the ban on government price negotiations for drugs purchased by Medicare and to increase the use of generic drugs by government health programs.

Similarly, Sen. Hillary Clinton (D-NY) promises to hold down fast-rising drug prices by removing barriers to generic competition, allowing Medicare to negotiate lower drug prices and boosting oversight of drug advertising. She wants to speed new generics to market and to create a pathway for biogeneric competition—to end "the monopoly currently enjoyed by large biopharmaceutical companies" and save $5 to $7 billion each year.

Even the presumptive GOP nominee, John McCain (R-AZ), considers his free-market approach to health reform compatible with these initiatives. He wants to develop "routes for safe, cheaper generic versions of drugs and biologic pharmaceuticals" and "safety protocols that permit re-importation to keep competition vigorous."

Comparing effectiveness

A related strategy is to steer health care spending to those medical treatments and products demonstrating real-world effectiveness. The aim is to produce information that will help patients and their doctors choose the most appropriate care options. The Medicare Payment Advisory Commission recommended in its June 2007 annual report that Congress establish an independent entity to sponsor "credible research on comparative effectiveness of health care services." In a January 2008 study, an Institute of Medicine (IOM) committee recommended establishing a national CE research program with "sufficient resources, authority, and capacity" to develop research standards and processes. An IOM Roundtable on evidence-based medicine provides a forum for ongoing discussion of ways to improve medical evidence and its use.

Not surprisingly, the presidential candidates have jumped on the comparative effectiveness bandwagon. McCain says that publicizing information on treatment options and developing national standards for measuring outcomes can address the rapidly rising cost of U.S. health care. Clinton wants to establish a "best practices" institute to provide better information on what works in health care. Obama supports CE research on which drugs, devices, and procedures are the best for individual patients as one way to reduce the "considerable waste in our health care system."

Enthusiasm for CE research is boosting support in Congress for establishing a quasi-governmental CE research organization. Senate Finance Committee Chairman Max Baucus (D-MT) is looking to authorize such an entity as part of must-pass Medicare legislation needed to block a scheduled cut in payments to physicians. Some policymakers talk about building on the CE research program at the Agency for Health Research and Quality (AHRQ), which supports studies to inform coverage and treatment decisions for Medicare and other government health programs. But the current thinking is that an independent research entity will be more protected from government controls and political whims.

The envisioned CE operation would be able to accept funding from private organizations as well as the federal government, an important consideration for raising the $200 million or so needed just to start such an operation. Any legislation adopted this year, however, is likely to establish only a "placeholder" to launch a CE program and not provide much more than the paltry $15 million that currently supports the AHRQ program.

Insurers and payers point out that the United States is virtually alone among developed nations without an entity dedicated to comparing the effectiveness and value of new drugs, devices, and medical procedures. They and other CE enthusiasts see a model for an expanded CE research program in the United Kingdom's National Institute for Health and Clinical Excellence (NICE), which reviews clinical and outcomes data to evaluate new medical technologies. NICE's cost-effectiveness assessments help national health officials establish clinical guidelines and make coverage decisions. But NICE analyses often take more than a year and can delay patient access to new treatments.

Industry concerns

Pharma companies acknowledge that objective CE research could increase drug utilization and prevent safety problems that arise from inappropriate drug use. At the same time, sponsors believe that payers should cover all medicines that the Food and Drug Administration deems to be safe and effective. Manufacturers fear that CE analysis could be manipulated to support a cost-cutting agenda, as opposed to promoting high-quality care, and could block rapid acceptance of new treatments. A key factor driving the CE clamor is the emergence of new biotech therapies and medical diagnostics with the potential to improve public health and save lives, but at fairly high prices.

Additional research requirements for sponsors, moreover, could be costly: Prospective studies cost hundreds of millions of dollars and are vastly different from relatively low-cost retrospective data reviews. A white paper issued by the Biotechnology Industry Organization (BIO) last year questions 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 in Washington, DC, sponsored by the Alliance for Health Reform, David Nexon, senior vice president of the medical device association AdvaMed, raised concerns that CE research might be used to support a "cheapest is best" approach. CE studies are "rarely definitive slam dunks," he said, noting that one treatment often works better for certain patients than another.

But the prospect that more effective (and limited) use of medical technology could save billions is too attractive for payers and insurers to ignore. "It makes no sense to us" to establish best treatment processes and then not look at that information in making coverage determinations, said Karen Ignagni, president of the association America's Health Insurance Plans. While CE analysis might not lead an insurer to deny coverage, a health plan might put a more costly drug that lacks a clear advantage in a higher formulary tier, Ignagni noted. "But taking cost out of the equation is putting your head in the sand," she observed.

Setting standards

Despite these differences, health care experts and pharmacoeconomic analysts are beginning to address operational and organizational policies for a CE research entity. Key issues are who will control and pay for the program, who will set the research agenda, what treatments will be evaluated, and how closely analysts will link CE research to payment policy. Pharma companies are leery of a multibillion 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. But industry leaders want a seat at the table in setting research priorities, standards, and methods.

All parties see a need to clarify methodology and standards for CE research, which many in the field consider more an art than a science. There are big differences in how economists value "quality of life years" and other standard values used in CE research. The International Society for Pharmacoeconomics & Outcomes Research has been addressing these and related topics at conferences and through journal publications, and CE research is the topic of discussion at numerous academic and industry meetings. The National Pharmaceutical Council has shifted focus to play a role in the debate on how best to conduct and utilize evidence-based analysis in making drug coverage decisions. In the end, the comparative research approach may be preferable to price controls in the guise of government negotiations for the Medicare drug benefit, coverage denials, and limits on access to new technologies.

Jill Wechsler is the Washington editor of Applied Clinical Trials, (301) 656-4634 jwechsler@advanstar.com