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Legislation Would Put Drugs and Other Therapies to a Useful Test

MANAGED CARE May 2008. © MediMedia USA
Legislation & Regulation

Legislation Would Put Drugs and Other Therapies to a Useful Test

A proposed research institute would pit medications against each other instead of against placebos, and that might save $368 billion over 10 years
John Carroll
MANAGED CARE May 2008. ©MediMedia USA

A proposed research institute would pit medications against each other instead of against placebos, and that might save $368 billion over 10 years

John Carroll

In many late-stage clinical trials, a new therapy has only to prove that it’s safe and significantly better than a placebo to win approval by the FDA. That system has often spawned therapies that compete against each other — and often leave payers and providers scratching their heads over which are better.

Now lawmakers are considering the establishment of an institute charged with sponsoring a host of independent studies to examine the comparative effectiveness of medical therapies. Supporters are gearing up for the debate, equipped with analysis claiming hundreds of billions of dollars of potential savings and an argument for improved outcomes, even as makers of drugs and devices warn against taking a good idea too far.

“We are concerned that insurers could use the research to do blanket denials of coverage,” asserts David Nexon, senior executive vice president of the medical technology trade association AdvaMed. In an age when new genetics research is offering almost daily insights into the characteristics of diseases and treatments, the manufacturers say this is no time to adopt the kind of cookie-cutter approach bad legislation could create.

Legislation is being worked up in both the Senate and House. It’s a slow process. The Senate bill, introduced in mid-April, has since been pulled, but things seem to be moving along in the House.

It’s a good thing, too. The United States is well behind the comparative research curve laid out in other industrialized countries. As the economist Gail Wilensky, PhD, noted in a study late last year, Australia, Canada, Germany, and the United Kingdom already fund public research comparing the efficacy and cost of treatments.

An independent group of investigators with a budget of about a billion dollars a year in this country could deliver $368 billion in savings over 10 years, according to an economic analysis completed by the Lewin Group for the Commonwealth Foundation.

“There’s a sense in the health care system that there are many services being done that don’t have a corresponding payoff,” says Commonwealth Fund economist Stuart Guterman, who helped write the report.

Guterman, though, says that comparative effectiveness research wouldn’t necessarily be a panacea.

“When we worked on this estimate, we got pushback from the Lewin Group that just putting information out there wouldn’t necessarily generate savings, because there’s no assurance the information would be used. I personally think people tend to underestimate how effective such information would be,” he adds, “especially if there was a centralized source of that information with high stature in the clinical community. A lot of that information would be useful simply by being available, but there is a gap between availability and use.”

To achieve the estimated savings, Guterman says, they assumed that doctors would be required to review alternative treatments with their patients.

Who pays?

HR 2184 would tap a variety of payers, including Medicare and insurance companies.

Guterman feels it is important to share the cost of the research among payers — not only Medicare and Medicaid, but also private insurers and self-insured employers. The center’s budget of $10 billion over 10 years could be produced by assessing each payer a small fraction of its revenue — .05 percent of the money spent by the public health agencies and .05 percent of private premiums.

“It needs to be a public/private partnership,” says Guterman, “to get a buy-in from all the interested parties.”

In managed care’s interest

Helping pay for this kind of work is exactly what managed care should encourage, says Alissa Fox, vice president for legislative and regulatory policy at the Blue Cross and Blue Shield Association. “This is so important that we recommend all payers be assessed. It shouldn’t be just government run. Everyone should have a seat at the table. If it’s 100 percent government it would be more political; we want to make sure the science prevails.”

“It’s exactly the kind of initiative that can deliver significant savings as well as improve care by offering unbiased information on medical alternatives,” says Steven Wojcik, vice president for public policy for the National Business Group on Health. “It’s needed so we know that we’re getting the best value for our dollars.”

It’s a logical approach to avoid the rationing of therapies that will inevitably follow a sustained failure to rein in costs.

Wojcik has heard some patient groups expressing concern that comparative effectiveness would spur one-size-fits-all medicine, discouraging payers from covering therapies that apply to only a segment of the popu?lation.

“Our view is the opposite. The research stops the one-size-fits-all research we have comparing therapies to a placebo and allows us to tailor it to specific needs. Instead of mass marketing medical interventions, this research will show which interventions would be most effective.”

Ideally, the NBGH would like to see research cover both effectiveness and cost, but it will compromise at the be?ginning.

“Just having that information on clinical efficacy is definitely progress,” says Wojcik.

It’s hard to find anyone completely opposed to the legislation. However, the companies that are most likely to find their products under the microscope have some clear reservations about how Congress should define a new institute’s mission.

“Proposals to expand government-?supported comparative clinical effectiveness research should be structured to promote better patient health and timely patient access to needed therapies, rather than denying or delaying patients’ access to beneficial care, as often occurs in Europe and Australia,” said Ken Johnson, senior vice president of Pharma?ceutical Research and Manufacturers of America, before the Senate draft was circulated.

“Comparative effectiveness studies could be very valuable,” agrees AdvaMed’s Nexon, “but the real issue is how this stuff is used” as well as the nature of the studies that will be mounted. In particular, he adds, comparative research on cost effectiveness should not be included.

“We’ve never accepted that people should get second-rate care based on cost,” says Nexon. As for the ambitious cost savings outlined by advocates, “We should not regard comparative effectiveness research as a solution to the cost problem. Nothing says that it will make that much difference in the behemoth of the system we have.”

Waiting for the launch

At least a few of the advocates appear willing to give up cost comparisons now, if they can get a green light to start efficacy research.

“We think cost effectiveness is important,” says Fox, “but we think it’s so important to get this institute off the ground, it should first focus on clinical effectiveness.”

It couldn’t be approved too fast for the Blues.

“We would love to see something happen this year,” Fox adds.

“Savings won’t be automatic; it will take a while. We need to get the best information into the hands of consumers and physicians, and the quicker you get it going, the quicker you improve the health care system.”

John Carroll, a freelance writer, has been a contributing editor of MANAGED CARE for six years.

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