Compare and Contrast – US Analyses Treatment Options

1 October 2009 (Last Updated October 1st, 2009 18:30)

At the start of 2009, the US Congress made available $1.1bn in stimulus funds for comparative effectiveness research. A report from Global Data investigates its impact and how it is set to bring down costs of drugs, medical devices and treatments.

Compare and Contrast – US Analyses Treatment Options

Comparative effectiveness research (CER) is a simple but enlightening method of understanding the relative positives and negatives of different treatment options for the same disease condition. Such is its importance to the medical sector that often physicians and patients will base their clinical decisions on the information it provides.

The healthcare industry and patients alike contend that cost alone shouldn't be the only criteria in deciding the treatment options for patients. Research may help save costs in the short term but eventually in the long run the costs are going to escalate further if patients do not receive the right treatment for their medical condition.

Decisions should be based on overall effectiveness of a drug, device or treatment rather than on cost alone. Imposing cost constraints may lead to patients' conditions deteriorating and increases the healthcare costs in the long-term.

"The healthcare industry and patients alike contend that cost alone shouldn't be the only criteria in deciding the treatment options for patients."

According to a special report by market analysts Global Data, CER needs to expand its focus to studies that encompass all aspects of the healthcare delivery system rather than just concentrating on drugs, biologics and devices. The research should include preventative services, emergency response and diagnostic tests to reflect the various components of the overall healthcare delivery system.

Stimulating stuff

The US has begun moving towards such research through the $789bn economic stimulus bill approved by the US Congress in early 2009. This substantial investment will be used to compare the effectiveness of different treatments for the same disease condition. In particular, it will provide $21bn for a 60% subsidy of healthcare insurance premiums for the unemployed under the COBRA health insurance programme, $87bn to help states with Medicaid and $19bn to modernise health information technology
systems. In addition, $10bn will be dedicated to health research and the construction of National Institutes of Health (NIH) facilities and $1.1bn for comparative effectiveness research

The American Recovery and Reinvestment Act of 2009 (ARRA) has created the Federal Coordinating Council (FCC) for Comparative Effectiveness Research (CER) to coordinate the research activities. A council of up to 15 federal employees – largely comprised of clinicians – is expected to coordinate the research and advise President Barack Obama and Congress on how to spend the money.

The legislation provides $300m for the Agency for Healthcare Research and Quality (AHRQ), $400m for the NIH and another $400m for the Office of the Secretary of Health and Human Services (HHS). These funds will be used to support research that assesses the comparative effectiveness of diagnosis, treatment and strategies.

The research will be particularly geared towards comparing the clinical outcomes and effectiveness of items, services and procedures that are used to prevent, diagnose or treat health conditions. It is also hoped to encourage the development and use of clinical registries, data networks and electronic health data that can be used to generate or demonstrate the outcome.

AHRQ is drafting a plan that specifies the scope of research activities that it will fund to achieve the programme's main objectives of providing information on the relative strengths and weaknesses of various medical interventions. The agency is considering expanding and broadening CER research activities initiated in response to the Medicare Prescription Drug, Improvement, and Modernisation Act of 2003. This includes the Effective Health Care (EHC) programme, which supports research activities performed using rigorous scientific methods within a previously-established process.

"NIH is expected to spend $400m on enhancing clinician decision making and is also deciding how to distribute its funds."

Once this period is complete, AHRQ will use financial award mechanisms to execute the programme. It is considering competitive award mechanisms, such as grants, contracts and cooperative agreements.

Meanwhile, the NIH's objective is to provide the scientific research that supports the goals of the ARRA. NIH is expected to spend $400m on enhancing clinician decision making and is also deciding how to distribute its funds. According to reports, NIH plans to obligate resources across several major activities that include previously peer reviewed and approved projects that were not funded in 2008 and grant applications that would not otherwise likely be funded in 2009 or 2010.

It is also looking at new and competing research efforts that focus on health problems where significant progress can be made within two years alongside continuing ongoing research efforts.

Cutting costs

CER's main aim is to reduce the spiralling healthcare costs that have been increasing in the US for the past several years. In 2007, the total spend on healthcare was $2.2tr with the spending accounting for 16.2% of the nation's Gross Domestic Product (GDP). The Congressional Budget Office estimates that healthcare costs will rise to 25% of GDP in 2025 if no reforms are made. The US healthcare expenditure as a percentage of GDP is more than any other developed country but it still remains unable to meet the demands of all its patients. Currently, 15% of the population (approximately 45 million) are uninsured.

While comparative effectiveness research offers a path towards curbing inflating prices, the healthcare industry's primary concern with the concept is that some may misuse such information to deny coverage or payment for expensive treatments. Some senators have already highlighted this and put forth recommendations to keep the research information relating to costs hidden from the general public.

The healthcare industry contends that the Food and Drug Administration delay in the approval process is leading to an increase in the prices of drugs and devices. One suggestion to tackle this problem is reducing the device or drug approval time. Less approval time means the product has more patent life and companies can price it accordingly. The healthcare industry has also argued that comparative effectiveness studies of medical devices, drugs and treatments should be conducted by the private sector without government intervention.

"CER's main aim is to reduce the spiralling healthcare costs that have been increasing in the US for the past several years."

Supporting this stance is the simple fact that the private sector is better equipped than government in terms of personnel and technology to conduct CER. The government maybe able to fund CER in the near term but any long-term investment will stay within the private sector.

The negative aspect of rationing medical services is that there will be less incentive for companies to continue investing in progress and innovation, which means patients may not be able to receive better treatment alternatives in future.

Final thoughts

In order for CER to be truly effective, it must meet patients' clinical demands rather than be based around just cost. Patients should still have enough personal freedom to choose the healthcare that, in the professional judgment of their doctors, best serves their personal healthcare needs.

Implementation of CER should therefore be based on patient input and feedback on a continuous basis. Transparency should be maintained in the decision making process and the reasons for denial of a particular drug, device or treatment should be made available to the patient. Innovation in patient care should be recognised and encouraged and finally the CER initiative must be structured to meet the increasing demands of a diverse patient population.

More reports are available to purchase at www.globaldata.com