Comparative Effectiveness Research holds extraordinary implications for healthcare stakeholders, notably the pharmaceutical, biotechnology, and medical technology industries; patients; physicians; hospitals; the federal Medicare program; state Medicaid programs; and health plans. In addition to guiding and hopefully improving day-to-day decisions by clinicians and patients, Comparative Effectiveness Research will be extraordinarily influential in coverage and reimbursement decisions.

Here is a quick primer on the massive new Comparative Effectiveness Research program in the U.S., including major changes enacted in the new health reform law.

Comparative Effectiveness Research Defined:

Comparative Effectiveness Research (CER) means research evaluating and comparing health outcomes and the clinical effectiveness, risks, and benefits of two or more medical treatments, services, or items (e.g., drugs, biologics, devices).

More specifically, this includes comparisons of:

• Prescription drugs and biologics
• Medical devices
• Diagnostic tests and diagnostic tools
• Surgical procedures
• Protocols or guidelines for patient treatment
• Care management practices
• Prevention activities

Conceptually, CER looks at medical interventions across the range of prognostic, preventive, diagnostic, therapeutic, rehabilitative, and palliative care. Health policy experts have increasingly proposed that CER should also assess the effectiveness of models or systems of health care delivery. Therefore, there is a degree of interaction and overlap between CER and health services research.

CER studies may compare similar treatments - like comparing several drugs in a therapeutic class - or compare clinical effectiveness of different approaches, like comparing a drug and a surgical procedure for the treatment of the same condition.

CER employs a variety of research methods, including randomized controlled trials, meta-analyses, and observational cohort analyses. In addition to conducting the clinical effectiveness and comparative effectiveness research itself, CER also involves building of the necessary infrastructure (data, research methods, staff, training, etc.). To meet the demands of CER, researchers are developing and testing new methodologies and data sources.

To have any real value, the results of CER must be actionable, with findings effectively translated for and disseminated to the full range of decision makers.

Challenges and Controversies in Comparative Effectiveness Research:

The goal of CER is to increase our collective knowledge of what works and to improve decision making by physicians, patients, purchasers, and payors. However, by its very nature and because of the aggresive use of CER in the UK and other countries, CER raises many difficult or controversial questions. Here are a just a few examples:

1. Should CER look only at clinical effectiveness, with eye to giving physicians and patients more information to guide their decisions?
2. Should CER also look at cost effectiveness and cost-benefit analysis?
3. Should CER influence or drive coverage and reimbursement decisions by Medicare and other government health programs?
4. Who should set research priorities? How should research priorities be set? What are the research priorities?
5. Since many studies look at large populations, how do we ensure research reflects special populations and doesn’t unintentionally discriminate against sub-groups? For example, if a drug, device, or surgical procedure works best for 80% of patients, what about the other 20%?
6. How should CER guide physician decision making or should government and payor policies be used to incent or require physicians and other providers to practice consistent with CER findings?

In a new issue brief, Gene Rich, MD from Mathematica Policy Research and Elizabeth Docteur, MS from the Center for Studying Health System Change discuss key challenges to successful implementation of the large and ambitious federal CER program. They explain how resolution of these challenges “may prove critical to the future role of this research in U.S. health care.”

Comparative Effectiveness Research in Other Countries:

Here is an interesting new comparison on the Use of Comparative Effectiveness Research in Drug Coverage and Pricing Decisions in Denmark, England, France, Germany, the Netherlands, and Sweden.

Comparative Effectiveness Research Prior to 2009:

In the U.S., federally sponsored Comparative Effectiveness Research has been conducted largely by the HHS Agency for Healthcare Research and Quality (AHRQ). The bulk of the AHRQ managed CER is conducted through university-based research centers under contract with AHRQ.

Prior to 2009, the AHRQ Effective Health Care Program spent a modest $15-$30 million annually. The AHRQ Effective Health Care Program was established under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).

AHRQ posts a wealth of reader-friendly information at www.effectivehealthcare.ahrq.gov.

Expansion of Federal Comparative Effectiveness Research in 2009:

In 2009, as part of the ARRA (Recovery Act), Congress appropriated $1.1 billion for comparative effectiveness research - $300 million for the Agency for Healthcare Research and Quality (AHRQ), $400 million for the National Institutes of Health, and $400 million for allocation at the discretion of the HHS Secretary.

Congress created a Federal Coordinating Council through which various federal agency heads could set CER priorities. Under a federal contract, an Institute of Medicine (IOM) committee recommended 100 priorities for CER.

HHS’ latest status report on Recovery Act spending details how AHRQ, NIH, and the Secretary’s office are using the $1.1 billion.

Major Changes to Federal Comparative Effectiveness Research in Health Reform Law:

In the new federal health reform law - Patient Protection and Affordable Care Act (PPACA) - Congress created several major changes to the federal Comparative Effectiveness Research program.

Starting October 2010, a new Patient Centered Outcomes Research Institute (PCORI) will be responsible for overseeing the federal comparative effectiveness research program. PCORI will set the national CER agenda and conduct research through contracts with federal agencies and grants and contracts with universities and researchers.

PCORI will operate as federally funded quasi-independent non-profit organization. The PCORI 19-member governing board will have 17 members appointed by Comptroller General of the US (head of the Government Accountability Office, an agency of Congress) plus directors AHRQ and NIH. The Comptroller General will designate the board chair and vice chair. Congress disbanded the Federal Coordinating Council for CER.

Patient Centered Outcomes Research Institute has a a very broad mission in the law:

Assist patients, clinicians, purchasers, and policy-makers in making informed health decisions by advancing the quality and relevance of evidence concerning the manner in which diseases, disorders, and other health conditions can effectively and appropriately be prevented, diagnosed, treated, monitored, and managed through research and evidence synthesis that considers variations in patient subpopulations, and the dissemination of research findings with respect to the relative health outcomes, clinical effectiveness, and appropriateness of medical treatments, services, and items.

The actual research will be delegated by PCORI to AHRQ and NIH. AHRQ and NIH, in turn, will contract out work to universities and research centers.

The Patient Centered Outcomes Research Institute will use a variety of expert panels. To help to ensure rigor of research methods, this includes a 15-member Methodology Committee appointed by the Comptroller General.

By law, PCORI is required to use open, transparent processes for decision making and include peer review. Wide, fast dissemination of research finding is also required. AHRQ will be responsible for translation and dissemination of evidence from CER to patients, clinicians, and other decision makers.

Expect to see federal officials, particularly the Obama Administration, using terms like “patient-centered research” instead of comparative effectiveness.

Permanent Funding Stream for Comparative Effectiveness Research:

PPACA, the health reform law, establishes a new, permanent funding stream for CER that, once fully implemented, will generate about $600 million annually for PCORI research priorities.

Specifically, health plans and self-insured employers (via TPAs) must pay a new federal tax of $2 per person they insure, generating $300 million or more each year starting in FY 2013. Another $150 million will come annually from Medicare. Finally, Congress also appropriated $50 million in FY 2011 and $150 million annually from FY 2012 through FY 2019. In effect, PCORI will also have unused ARRA CER funding at its disposal.

As part of health reform implementation, states will create a large and complex new marketplace for the buying and selling of health insurance coverage. Through State Exchanges, individuals and small businesses may buy federally defined benefit packages from state licensed and certified Qualified Health Plans.

For health plans, this is a huge new market with potential enrollment of 25 million to 40 million or more. For individuals and small employers, it will create a new, highly regulated pathway to buy coverage and access subsidies. Some 16 million uninsured Americans are projected to be insured through State Exchanges. For states, implementation will present extraordinary policy, regulatory, administrative, and systems challenges.

Briefing on State Exchanges and Qualified Health Plans:

For members of the Medicaid Health Plans of America (MHPA), I recently conducted a webinar on State Exchanges and Qualified Health Plans. For a variety of reasons, Medicaid health plans are better positioned for the Exchange plan market than many commercial plans. For the webinar slide deck, click here (PDF).

It was part of a series of webinars by Sellers Dorsey for Medicaid health plan leaders. Sellers Dorsey’s other webinar topics included (1) grants and demonstrations under health reform law (PPACA), (2) Medicaid expansion, and (3) Medicaid drug rebate.

State Health Insurance Exchanges:

In a nutshell, starting January 2014:

At state option, large employers may buy coverage through State Exchanges starting in 2017. This, coupled with the strong possibility of crowd-out, could lead to major enrollment growth for QHPs.

The latest issue of the journal American Health & Drug Benefits includes a valuable mix of studies and articles of interest to decision makers. Topics include health reform, bundled payment, drug pricing, benefit design, Medicaid, medication therapy, and specific clinical conditions.

The Health Reform Law: Key Changes to Be Implemented in 2010
By Kip Piper, MA, FACHE

Federal Drug Price Controls in Medicaid: Expansion of Mandated Rebates under Health Reform Law
By Kip Piper, MA, FACHE

Prevalence of Treated Bipolar Disorders and Associated Comorbidities in Managed Care and Medicaid Populations
By Jeff J. Guo, PhD; Nick C. Patel, PharmD, PhD; Hong Li, PhD; and Paul E. Keck Jr, MD. With Stakeholder Perspective by Nirav R. Shah, MD, MPH

Impact of Etanercept Treatment on Absenteeism and Productivity: The Work Loss and Productivity Survey
By Denise Globe, PhD; Peter Mazonson, MD, MBA; Chris Santas, MBA; Regina Murphy, MBA; Annie Cheng; Xingyue Huang, BPharm, PhD; and Arthur Kavanaugh, MD. With Stakeholder Perspective by Atheer A. Kaddis, PharmD

Health Benefit Coverage, Reimbursement, and Influences on Traditional Pharmaceutical Channels
By F. Randy Vogenberg, RPh, PhD. With Stakeholder Perspective by Gary M. Owens, MD

Bundled Payment: A Promising Initiative of Payment Reform
By Jim Evans

Impact of 2 Copay Waivers in a Generic Incentive Program
By Anthony F. Liu, MSCS; Tom Jecklin; Geoffrey Lee; and James Hogan

Medication Adherence: Effectiveness of Physician Alerts to Resolve Potential Gaps in Pharmacotherapy
By Joshua N. Liberman, PhD; Janice Moore, MPH; Asif Ally, RPh, MBA; and Troyen A. Brennan, JD, MD

New Approaches to Treating HCV Infection
By Caroline Helwick

Promising New Approaches to Multiple Sclerosis Medications: AAN 2010
By Alice Goodman

The June issue of AHDB includes highlights from the 2010 annual meeting of the Academy of Managed Care Pharmacy:

Read or Download June 2010 Issue:

To read or download the June 2010 issue, click here. To read or download specific articles in PDF, click here.

American Health & Drug Benefits:

American Health & Drug Benefits is available in print and online at www.AHDBonline.com. AHDB is a peer-reviewed journal for 30,000 decision makers in health plans, prescription drug plans, PBMs, the federal Medicare program, state Medicaid programs, and the pharma, biotech, and medical device and diagnostics industries.

Kip Piper is health policy editor of American Health & Drug Benefits.

Federally mandated rebates for prescription drugs in Medicaid were expanded significantly - by $38 billion - under the new health reform law, with extraordinary financial, administrative, and compliance implications for pharmaceutical manufacturers, Medicaid health plans, and state Medicaid programs.

In a new journal article, I explain changes to the Medicaid drug rebate program and implications for drug makers, health plans, and states. The article appears in the June 2010 issue of the peer-reviewed journal American Health & Drug Benefits.

The article provides a primer on the basics of the Medicaid drug rebate program, including Average Manufacturer Price (AMP), Best Price, federal rebate agreements with drug manufacturers, supplemental rebates, Preferred Drug Lists (PDLs), reporting of drug prices by pharma and biotech companies, and drug utilization reporting by state Medicaid agencies.

The article then summarizes the major changes effective for 2010, notably (1) increased minimum federal rebate percentages for brand and generic drugs and (2) extension of federallly mandated minimum drug rebates to Medicaid drug utilization in Medicaid managed care organizations. It concludes with a brief discussion of implications for states, drug makers, and health plans.

MedPAC released its Medicare Data Book for 2010, with a wide range of useful information on Medicare spending, utilization, beneficiaries, providers, health plans, drug plans, access, and quality. The format is reader-friendly charts and tables with bulleted summaries.

Specifically, the latest MedPAC Data Book includes information on:

MedPAC also provides an array of charts and tables on Medicare providers and care settings, with data on Medicare spending, percent of beneficiaries using the service, number of providers, volume, length of stay, and, where available, profit margins, if
applicable. Provider types covered include inpatient hospitals, outpatient hospitals, physicians, skilled nursing facilities, home health agencies, long-term care hospitals, inpatient rehabilitation facilities, ambulatory surgical centers, dialysis facilities, and hospice.

MedPAC - the Medicare Payment Advisory Commission - advises Congress on Medicare policy.