Life Sciences

Where do your products fit within a comparative effectiveness policy?

Medicare & Reimbursement Advisor Weekly, June 10, 2009

To date, comparative effectiveness (CE) hasn’t been focused on oncology or other specialty pharmacy therapeutic areas where many of you have investment, but this figures to change given the current environment. CE isn’t just about choosing the cheaper drug, and most agree that using CE studies to find a lower-cost alternative would likely waste financial resources. So where does your suite of products fit in with CE? What about private payers? What do they want from industry?

We explore CE’s impact on oncology from multiple perspectives.

Is randomization the best approach to CE studies?

The best model for CE research comparison trials is probably the National Institutes of Health’s (NIH) rigorous randomized controlled trials (RCT), but RCTs are not practical for this type of research, as it is difficult to randomize patients in large clinical trials, says Sean Tunis, MD, founder of the Center for Medical Technology Policy. As an alternative, Tunis suggests patients be recruited from real-world settings with minimal exclusion criteria and randomized, with some equipoise.

Marc Samuels, JD, MPH, at HillCo Partners, a strategic business advisory firm with an office in Washington, DC, believes differently. “Physicians at many of the nation’s pre-eminent cancer centers see such a study as problematic,” Samuels says. “Patients demand what they see as the best therapy, so randomization is difficult.”

In oncology, where only one drug is seldom used for treatment, CE studies must be carefully constructed and applied. Scott Gottlieb, MD, former deputy commissioner for medical and scientific affairs at the FDA, and currently a senior fellow at the American Enterprise Institute, says comparing drugs head to head, although potentially valuable in some therapeutic areas, would misplace financial resources and probably carry little value in oncology. For example, with cardiovascular disease, most of the important CE research to date is not whether one statin is better than another; the same thinking should apply to cancer.

Evaluating cost-effectiveness

To be successful and ultimately useful to oncologists and patients, saving money cannot be the only motivation for conducting CE research. “It’s not as simple as comparing equivalent technologies or drugs, and then seeing what’s cheaper,” says Peter Bach, MD, a former senior advisor to CMS, who is now at Memorial Sloan Kettering Cancer Center in New York City. Medicare cannot use cost to determine whether a drug is reasonable and necessary. “Doing so would be a tough sell,” says Bach.

Even if CMS included cost in its analysis and national coverage decisions resulted, Bach is not convinced that doing so would have much effect on the reduction of total spend. “First, you would need to change the overall culture, and second, the prices for some things, in my opinion, are higher than their value. Frequency of services and drugs is a bigger issue than the units.”

For former Medicare chief medical officer Tunis, cost is a necessary component of all CE analysis. However, he doesn’t think cost should be the determining factor in a yes-or-no decision for a drug or technology, such as the way the National Institute for Health and Clinical Excellence uses cost in the United Kingdom. “I don’t see that going down as politically acceptable here [in the U.S.],” Tunis says.

Cost may find its way into CE research by helping payers design value-based insurance or patient cost-sharing, or some variable based on cost-effectiveness.

Consider colorectal cancer screening, for example. Tunis offers, “We could have no copay, or we could pay people to get screened.” However, if the test or drug to treat colorectal cancer is $100,000 per quality adjusted life year to extend life for an additional 30 days, the patient should take on more financial responsibility for that, he says. In this context, cost-effectiveness in oncology is more likely to have a political chance, rather than Medicare using it as part of a yes-or-no decision for a single product.

But as information from specific oncology CE research is publicized, patients, not payers, may become the ultimate decision-makers. Patients carry increasingly higher cost exposure, and as a result, they’re likely to become more cost and quality sensitive. “It won’t be the health plans making the treatment decision,” says Tunis. “The target has got to be to inform the doctor and the patient, so [both] can make cost-conscious healthcare choices.”

Private payers leading integration

Some commercial payers, which often follow Medicare’s policy lead, are ahead of CMS in integrating CE research into plan policy. Oncology is one of their chief targets. In a proprietary study from Xcenda, an AmerisourceBergen Specialty Group company that provides consulting and research services, almost one-third of 44 commercial plan pharmacy and medical directors said that they are conducting some version of CE studies. Gene Reeder, RPh, PhD, at Xcenda, says a majority of plans (57% in the recent advisory board survey) are apparently using the data they generate from CE studies for formulary development, determining levels of patient copay responsibility, and making decisions about exclusion coverage for less effective treatments.

More acutely, payers say they may use CE oncology research findings in benefit design, including:

  • Tiered payment structure, based on value
  • Tiered cost-sharing, reducing out-of-pocket costs for high-value items and services
  • Limited coverage or payment, if comparative superiority is not established
  • Risk-sharing agreements, which link actual beneficiary outcomes to the payment of a service based on its CE

The commercial sector has practical opinions on the role of a national center. Ron Blumenfeld, MD, the medical director for ConnectiCare Health Plans, says such a center could provide macro-level oncology research to assist payers in providing greater clarity to physicians and coverage decisions for what are difficult choices for patients at the end of life.

Of the plans conducting CE research, 41% were using in-house staff members in 2008. Plans are trying to use their own in-house data, and the answers here reflect the skepticism of using outside information or resources. “This is probably a statement that the private sector is further along with implementing comparative effectiveness than we thought,” says Thomas Bramley, RPh, PhD, at Xcenda.

That the private sector is more in front of this trend than the government may be a blessing, says Gottlieb. “Think of it this way: The Centers for Medicare & Medicaid Services has 10–12 clinicians on its reimbursement staff, and not one oncologist, while a health plan like Aetna has 250 physicians on its reimbursement staff.”

The majority of private plans make their decisions based on readily available published data, which costs the least to get, but may not give the cancer care continuum the best information with which to compare treatments in the long-term.

Industry Challenges

CE represents a bit of a paradox for managed markets and brand teams. For example, second-line therapies that haven’t had the economic market position may benefit from such a study, whereas some products could stand to lose significant share with one landmark decision. Some payers have called for more head-to-head regimental comparisons.

“Manufacturers are not helping themselves when they don’t compare against realistic benchmarks,” says Kerry Bendel, PharmD, the pharmacy and P&T committee director for Medica, a regional Medicare plan headquartered in Minneapolis.

With gaps in available oncology comparisons, Medica relies on published literature to support medical technology assessments and formulary decision-making. Bendel agreed with the 85% in the Xcenda survey who said costs are relevant to evaluating effectiveness and conducting comparative research.

Pharma has not been deterred to innovate and invest in cancer, as the current pipeline suggests, but Gottlieb wonders how long the trend would continue if the government makes CE research a means to more restrictive policies.

Oncologists could benefit immensely if more manufacturers followed Amgen’s lead by conducting a head-to-head study with an active comparator, such as when the company compared the effects of twice-yearly subcutaneous injections of denosumab to weekly oral doses of alendronate (Fosamax®) on bone mineral density in postmenopausal women with osteoporosis.

“Pharmaceutical companies probably need to take more risks with this research and think about comparative effectiveness as part of [their] product development strategy,” says Bramley.

Editor’s note: This is an article that I first wrote in December 2008. You can read the complete article at www.oncbiz.com/ documents/OBR_nov08_CE.pdf.