How to build value through comparative effectiveness research
Angelo DePalma explores how pharma firms can benefit from comparative effectiveness research (CER) regardless of their drugs marketplace position
Comparative effectiveness research (CER) seeks to compare the effectiveness or safety of two or more treatments head-to-head; for example, two statins for cholesterol lowering or two antidepressants.
Primarily an observational or epidemiologic activity, CER is increasingly employed to determine whether a drug will be reimbursed and, for private payers, at what level.
During the 2008 US presidential elections, every major candidate proposed healthcare initiatives and most included some implementation of comparative effectiveness research.
CER already plays into drug pricing decisions in Denmark, England, France, Germany, The Netherlands, and Sweden.
President Obama allocated $1.1 billion toward CER as part of the Recovery and Reinvestment Act.
One factor underlying the drive to compare treatments is the disturbing claim made by the US Institute of Medicine (IOM) that half of all treatments lack sufficient evidence of efficacy.
Another is the recent spate of product recalls for often-serious safety issues.
But perhaps the most significant factor is the drive toward value by private and governmental insurers.
The drive toward value
CER is just a starting point, however.
Ultimately, benefit plans will need to make decisions based on cost-benefit metrics, of which CER is but one ingredient.
CER only tells which drug is more effective or safer; other factors enter the picture when cost-effectiveness is the goal.
For example, should a plan utilize a $100-per-dose drug regimen that is 90% curative or a $1,000 drug that is 95% curative?
That depends on the disease, argues Jason Shafrin: The lower-cost medicine might be called for in case of minor illness but not cancer.
At some point, there must be a trade-off between cost and benefit, Shafrin writes in the March 2010 issue of Healthcare Economist.
Regardless of how the US approach diverges from those of single-payer systems, America has significant catching up to do compared with European and some Asian plans.
IOM, a non-governmental arm of the independent National Academy of Sciences, has identified approximately 100 therapeutic areas in which CER could achieve the most, or most immediate, benefit.
These were tiered by priority and divided, along with the funds, among three US agencies.
Neither significant results nor concrete policies have yet emerged from this funding.
Theyre still trying to figure out how to do this, says J. Michael Sprafka, a VP at Kendle Consulting in Cincinnati, Ohio.
How its used in medical decision-making and determination of cost-support remains to be seen.
Build a value story
It would be a mistake to fashion CER wholly on the clinical trial model.
The real test of a drugs value is its utilization in the real world, in populations suffering from co-morbidities and whose compliance to therapy is less than ideal.
For this reason, much of CER is observational, data-churning work, preferably conducted in phase IV or post-approval.
Sprafka goes so far as to call it non-experimental.
But he raises the point of whether it is ethical, or even scientifically valid, to base formulary and reimbursement decisions on anything less than head-to-head clinical studies.
Is the observation that one drug works better than another sufficient to remove the less-effective drug from practice?
I think thats rather short-sighted, says Sprafka.
Also relevant is the personalization factorone drug may work better than others in some but not all patient subsets within a disease class.
Ideally, personalized medicine and CER will co-evolve in ways that are mutually supportive. (For more on personalized medicine, see Personalized medicine: A kick-start for innovation?).
Sprafka argues that pharmaceutical firms need to do better in explaining to plans why their drugs belong on formularies.
That includes identifying conditions and patient sub-populations in which the products are optimally effective.
Otherwise, formularies will act on cost alone and that would be to the detriment of patients, according to Sprafka.
In fact, unless a drug sponsors business strategy is intimately tied to demonstrated therapeutic superiority, head-to-head clinical trials on branded products are rare.
Head-to-head studies, when they occur, are usually government-sponsored and involve off-patent drugs.
European Union plans use similar (epidemiologic or surveillance) methodology, but Europeans are more likely to apply CER and cost-effectiveness measures directly to formulary status, or even access, than US payers.
Eventually, Sprafka says, all regulatory jurisdictions and private insurers will require some prior CER or cost-effectiveness calculation before considering a new drug.
Its critical to build a value story, says Sprafka.
Maybe not for every patientsubgroups will work, toobut safety and efficacy are no longer enough.
Like personalized medicine, CER will produce winners and losers within therapeutic classes, except that here the silver linings of premium pricing and higher compliance are absent.
Drugs with lower effectiveness and more safety issues, expensive medicines, and those that were aggressively marketed will likely lose market share.
Branded, premium-priced top sellers will have nowhere to go but down, while also-rans can only improve.
The added dimension of personalization could, theoretically, substantially affect the calculation.
Re-defining who is meant to take a drug wipes the slate clean, at least in principle, since CER-worthy data would almost certainly not exist for such patient-drug pairings.
Build a CER strategy
To counteract the impact of generating winners and losers, Sprafka suggests sponsors build a CER strategy into their development plans and not wait until after approval.
Companies must be stewards of their drug not only during early stages but post-approval, in broader populations, Sprafka argues.
Its a whole different strategy than simply assuming you can get $8 per pill.
Moreover, companies should conduct CER on their own, making the case through literature searches and post-marketing surveillance that the drug is performing as it should.
Is the drug being prescribed to the right patients?
How is it being used off-label?
Could adverse events lead to label changes?
Can the appropriate value argument be based on observational studies?
The responses of clinical study subjects do not always translate cleanly to larger patient populations.
Sprafka advises sponsors to build bridges from experiment to the general population to assure regulators and payers, through epidemiologic data and pharmacoeconomics, that their drug has value.
Traditionally, research grinds to a halt after approval, Sprafka says. Now it continues.
The new health
John Doyle, of Columbia University and clinical research organization Quintiles, refers to the emerging industry landscape that includes CER and personalization as the new health.
A defining characteristic of this paradigm is the changing role of drug-makers and the complex interplay between them and other stakeholders.
Biopharma companies need to be part of the universe and not the center of the universe, Doyle observes.
Similarly, physicians will increasingly become less significant in prescribing.
Lujing Wang, senior VP at Campbell Alliance, a pharma and biotech management consulting firm, notes the inevitability of big pharma existing within a paradigm in which they are not the only significant players.
According to Wang, the focus on CER and evidence-based medicine (EBM) has been increasing, driven in part by government pressure as well as grassroots interest from industry players, including manufacturers and managed care.
It is not a question of whether the pharmaceutical industry should avoid or embrace this trend; it is already a reality, Wang says.
Pharmaceutical companies need to prepare themselves to deal with it effectively and efficiently.
Wang suggests two areas where the industry can begin: Incorporate market access considerations as early as possible, ideally at the preclinical stage, to anticipate emerging payer standards with respect to product differentiation and pricing; and create and maintain a transparent, predictable, and stable platform for CER and evidence-based medicine with government and academia.
This will help sustain an environment of fair play, according to Wang.
Reinforcing value
The emphasis on value and the demand for CER will transform drug development by altering pre-market research protocols to address these multiple stakeholder needs, while simultaneously demanding post-market observational research to evaluate real-world performance.
Quintiless Doyle points to the need for convergence, combining these two historically disparate functions and forcing their collaboration and mutual support to assure the approval of safe, effective, and profitable products.
The winners will be companies that recognize they cannot afford to wait passively for policy makers to dictate comparative effectiveness requirements, but rather embrace the opportunity to reinforce the value of their products.
The CER evolution really should be viewed as an opportunity rather than a burden, Doyle says, particularly if biopharma gets involved in developing the standards for demonstrating value. There is a significant opportunity for them to take charge of their future.
Part of the equation will involve public and private sectors working together to develop a universally accepted pharmaceutical valuation system based on commonly appreciated CER principles.
Doyle notes that the US Patient Centered Outcomes Research Institute (PCORI), a quasi-government organization affiliated with the Government Accountability Office that includes industry representatives, is an excellent starting point.
But it will only succeed if it can drive closer collaboration among regulators and payers and focus on long-term safety and cost-effectiveness.
Another step in the right direction, he says, is the Agency for Healthcare Research and Qualitys (AHRQ) CER initiatives.
One AHRQ initiative, undertaken in collaboration with the American Medical Association and a coalition of insurance companies, has been the creation of a national clearinghouse for treatment guidelines that summarizes available medical evidence on the appropriate treatments for various conditions.
Although AHRQ traditionally focuses on relative clinical benefits of different treatments, some of its studies examine cost-effectiveness as well.
But up until now, CER accounts for only a modest portion of AHRQs budget.