Pharmawire - regulatory article:
14-Jan-09 16:54 Funding for comparative effectiveness studies likely to come during health reform debate, sources say
Story * First funds more likely to come through stimulus package, rather than part of SCHIP
* Funds of USD 1.3bn could fund studies that would guide reimbursement decisions
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Legislators will likely free up funding for comparative effectiveness studies as part of any healthcare reform package this year, but the short-term impact on drug makers will likely be minimal, healthcare policy experts said.
However, they noted that the long-term impact will likely create "winners and losers" in drug development. These studies are used to assess the cost effectiveness of different treatment options - looking at, for instance, whether a generic drug would work just as well as a newer agent for a particular disease.
Support for these studies has been building over the past year in order to control rising healthcare costs and reign in Medicare spending. Bruce Fried, a partner at law firm Sonnenschein, Nath & Rosenthal, noted that the Congressional Budget Office recently included funding for comparative effectiveness research in its list of budget options.
He noted that one proposal being discussed on the Hill would allocate USD 100m for these studies starting in 2010 - going up to USD 400m in 2014. All together, the proposal would allocate USD 1.3bn by 2019, he said.
"The savings would be realized by not paying for treatments that are less effective," said Fried, who previously served as director of the Center for Health Plans and Providers at the agency now known as the Centers for Medicare and Medicaid Services. "Those treatments that are found to be less effective than others are going to receive less payment."
Congressional Democrats will probably use the upcoming economic stimulus bill to get the ball rolling, according to Dan Mendelson, president of Avalere Health and former associate director for health at the Office of Management and Budget. Mendelson said he expects funding of more than USD 10m to be included in the stimulus package and allocated for further research into comparative effectiveness.
While specific drugs and devices haven't been singled out, regulators will likely look first at the therapeutic areas with the highest spending, Fried noted. "They're going to go after the low-hanging fruit," he said.
Private insurers will also use this work to guide reimbursement decisions, he said, adding, "There are going to be winners and losers."
Former FDA chief counsel Daniel Troy, who is now general counsel at GlaxoSmithKline, also predicted last year that a democratic administration would usher in a comparative effectiveness mandate. "The pressure there is extreme," he said at a conference on cancer drug development.
"The trend is essentially moving in conjunction with personalized medicine," said Robert B. Nicholas, a partner at law firm McDermott Will & Emery and former chief counsel to Vice President Al Gore.
Nicolas noted that Congress is likely to provide funding and other incentives to managed care companies and drug makers to perform the studies themselves - rather than charge a particular government office with that task. Comparative effectiveness studies are costly to conduct and take time to yield data, he added.
A rumor has circulated Washington in recent days that the reauthorization of the State Children's Health Insurance Program (SCHIP) may have some comparative effectiveness language in it, according to Jeff Chertack, vice president for health policy at Ogilvy Public Relations Worldwide.
While the House version - which was released yesterday - does not appear to have this language, the Senate version is still an open question, Fried noted.
Yet Fried was also skeptical that comparative effectiveness would be tacked onto SCHIP. "They've been fairly constrained in adding on extraneous issues," he said. "They want to pass SCHIP quickly [and] comparative effectiveness is not without controversy."
Nicolas agreed. "To the extent that [SCHIP] could become controversial, that would make it harder [to pass]," he said.
More likely, Mendelson said, will be a piecemeal strategy that pushes the issue forward for the next two years. While the creation of a new federal agency to monitor the issue is possible, Mendelson said he thought it was more likely that legislation would dramatically increase funding for the Agency for Healthcare Research and Quality (AHRQ) and house comparative effectiveness under that agency's roof.
"The implication for the companies is that this will change the way drugs are evaluated post-market," Mendelson said.
by Beth Herskovits and Marc Longpre
Source Pharmawire
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