Healthcare Reform Threatens Biotech Coverage and Access - Biotech companies fear comparative effectiveness analysis will emphasize product costs over value. - BioPharm International


Healthcare Reform Threatens Biotech Coverage and Access
Biotech companies fear comparative effectiveness analysis will emphasize product costs over value.

BioPharm International
Volume 21, Issue 6


Instead of promoting high quality care, biotech manufacturers fear that CE analysis could be manipulated to support a cost-cutting agenda that blocks rapid acceptance of new treatments. A key factor driving the CE clamor is the emergence of new biotech therapies and medical diagnostics with the potential to improve public health and save lives, but at fairly high prices. While CE research could increase drug use and prevent inappropriate uses that raise safety issues, industry leaders maintain that payers should cover all medicines that the FDA deems safe and effective.

At an April briefing in Washington sponsored by the Alliance for Health Reform, David Nexon, senior vice president of the medical device association AdvaMed, raised concerns that CE research might be used to support a "cheapest is best" approach. CE studies are "rarely definitive slam dunks," he said, noting that one treatment often works better for certain patients than another one. A white paper issued by the Biotechnology Industry Organization (BIO) last year questions whether CE research methods are sufficiently developed to deal with the complexities of biotech therapies and the wide variation in individual response.

But the prospect that more effective (and limited) use of medical technology could save billions is too attractive for payers and insurers to ignore. "It makes no sense to us" to establish best treatment processes and then not look at that information in making coverage determinations, said Karen Ignagni, president of America's Health Insurance Plans (AHIP). While CE analysis might not lead an insurer to deny coverage, a health plan might put a more costly drug that lacks a clear advantage in a higher formulary tier, Ignagni noted. "But taking cost out of the equation is putting your head in the sand," she said.

Despite these differences, healthcare experts and pharmacoeconomic analysts are beginning to address operational and organizational policies for a CE research entity. Key issues are who will control and pay for the program, who will set the research agenda, what treatments will be evaluated, and how closely analysts will link CE research to payment policy. Biopharmaceutical companies are leery of a multibillion-dollar agency sponsoring comparative studies that Medicare and other payers would use in making product coverage and reimbursement decisions. And added study requirements could erect higher hurdles for bringing new drugs to market.

Consequently, the industry is encouraging health policymakers to look more broadly for strategies to rein in healthcare costs. Initiatives to reduce medical errors, curb hospital-acquired infections, adopt value-based purchasing, and implement IT systems have potential for reducing health system costs. In the end, the comparative research approach may be preferable to price controls in the guise of government negotiations for the Medicare drug benefit, coverage denials, and limits on access to new technologies.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634,

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