Healthcare reform: comparative effectiveness may be here to stay in the US

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"The latest beneficiary of healthcare reform to step into the spotlight: Comparative effectiveness. The bill signed by President Obama earlier this week sets up a new institute for head-to-head studies of drugs and devices–and arms it with a $500 million annual budget. That positively dwarfs the $1.1 billion in comparative-effectiveness funding approved by Congress last year."

Source: Fierce Pharma


What's interesting to me about the Obama health care reform law is that tucked away on page 1617 out of 2400 is a measure discussing comparative effectiveness (hat tip to Bloomberg for spotting it).  In the short run, the measure won't have much impact, but in the long run, say by 2013 onwards it will start to bite.

This is where savings will start to be made, so if for example, a branded drug doesn't appear to offer much benefit over a generic, then undoubtedly the payers will force dispensing of the generic version and save significant expense in the process.

One thing I had forgotten until sitting through the non-oncology presentations at the recent Roche IR meeting is that most trials compare the new drug to placebo rather than standard comparators, so it will be difficult to compare drug performance in a given class without head to head trials.  Of course, in many cases, they are similar and success may well be determined by either being first to market by several years or by creative marketing and positioning.

In oncology, it is more typical to either compare a new regimen to the established standard of care or to add an experimental agent to the standard of care and then compare to the standard alone.  In this way, a sense can be gained regarding how well the new drug fits in the existing treatment algorithm.  

Thus drugs that do not show significant improvement to the standard of care generally are terminated in that indication or fail to get approval. Brutal perhaps, but it is an effective way to sort the wheat from the chaff.  The only time placebos typically appear in oncology trials is in refractory disease where there are no available comparators, so a drug is compared to placebo or best supportive care.

A world apart in drug development.

So what of the future?  According to Bloomberg:


"The new legislation creates a nonprofit Patient-Centered Outcomes Research Institute and tasks it with setting a national agenda for the studies, as well as providing more money and disseminating results."

It's going to be an interesting ride for sure and of course, other countries already have comparative effective research built into the approval process, as the UK already does.  Ultimately, resources become limited, so it's a choice between having your health care managed by the limitations of the hospital budget (UK) or limited by your ability to pay (US).  Either way, choices and options are always rationed to some degree.

One question I'm wondering about is how well prepared are Pharma and Biotech?  The big companies are already doing CE research, the little guys?  Maybe not so much.

Are you incorporating comparative effectiveness into your strategic and life cycle management plans?

  • http://profile.typepad.com/6p0120a5b7ce1b970c twitter.com/mikehartCXO

    The question will be whether CE will have any meaning to prescribing physicians who to this day prefer branded drugs to generics in many indications. Payers already force patients towards generics through their drug classification process and it is up to the patient to choose. Pay $10 for 2X day Cipro antibiotic or $60 for 1x day Levaquin.
    CE is a great idea in theory and as you mentioned has existed in oncology drug development for years. But why should CE come through yet another tax funded institute? Just have FDA require it as part of an NDA much like it is in oncology. Force pharma to pay, not taxpayers.

  • http://profile.typepad.com/maverickny MaverickNY

    Hi Mike, totally agree many physicians prefer branded drugs over generics.
    In the case of oncology, community doctors make money from selling infusional drugs to their patients, so they will make more on a higher price branded drug at say $1000 than a $10 generic even if the percentage markup stays the same.
    I think we will see the trend going through the FDA eventually as larger scale Pharma registration trials start including sophisticated health outcomes measures. For that to happen though, the FDA needs to be re-engineered from the ground up as even they are beginning to recognise. Where the US could do better than the UK and Europe is creating standards and processes with clear measures of effectiveness rather than the inconsistent black box approach of NICE.

  • bigwiggs@msn.com

    My question is measurement of adherence of prescribing medications which have been determined to be more cost effective under CE. In other words, how will the payer determine a HCP (health care provider) is prescribing the most cost effective drug? How will the payer demonstrate to the government that CE is driving the use of cost-effective drugs in clinical practice? How will CE phase 4 research take into account “quality of life” (especially in end-stage oncology meds)?
    MDs already chafe at the idea of restictive formularies impacting how they can practice medicine. With the notion that government is limiting their treatment choice will not sit well with the public.

  • http://profile.typepad.com/kentwiggs Kent Wiggs

    My question is how will CE adherence by the HCP be measured? Will the MHC provider (e.g. BCBS, UHC) report Rx use to a government agency which then determines whether CE Rx end points are being met? How will MDs react to the idea that CE, funded by the government is limiting how they can treat their patients? What will be the public/patient response?
    When measuring CE who or how will outcomes be weighed? For instance, a key stage 4 cancer outcome measure is quality of life? Will this new panel, appointed by the US Comptroller, determine CE study parameters and weighting of measured outcomes?