Biotech Manufacturers Anticipate CER Challenges

Published on: 
BioPharm International, BioPharm International-11-01-2010, Volume 23, Issue 11
Pages: 40–45

Comparative effectiveness poses challenges for drug manufacturers.

There is great optimism throughout the healthcare community that comparative effectiveness research (CER) on how to prevent, diagnose, treat, monitor, and manage disease will both enhance the nation's healthcare system and curb unwarranted spending. The federal government is poised to invest some $500 million a year in CER studies authorized by the new Patient-Centered Outcomes Research Institute (PCORI), as required by the Affordable Care Act (ACA) enacted last March. PCORI now has a chairman and board representing all stakeholders, and will take on the daunting task of setting the national CER agenda, developing systems for funding research, establishing standards and methods for comparative studies, and devising programs to disseminate results to practitioners and to the public.

Jill Wechsler

Although patients and manufacturers support CER generally, they are wary that government-funded studies will steer health coverage decisions towards low-cost remedies and away innovative products with high price tags. Biopharmaceutical companies have worked hard to shift the focus of the federal program take away from drug–drug comparisons and toward the more difficult task of evaluating medical procedures and methods of care. Personalized medicine advocates, moreover, are pressing for CER to consider treatment effects on patient subpopulations, including minorities, children and individuals with uncommon health problems—and not what works best in the average patient. Yet, designing studies that are able to detect such differences is tricky and may increase the scope and cost of research.



A range of public and private researchers and payers have been sponsoring CER studies for many years in an effort to identify the most effective medical therapies and practices, as well as those that are inappropriate or even harmful. Comparison of the costs and effectiveness of new drugs and medical technology is the objective of most CER initiatives, including the United Kingdom's National Institute for Health and Clinical Excellence (NICE) and the University of Oregon-based Drug Effectiveness Review Project (DERP), which evaluates drugs for state Medicaid programs and other payers. In establishing the Medicare drug benefit in 2003, Congress provided additional funds (nearly $150 million over the last five years) for the Agency for Healthcare Research and Quality (AHRQ) to solicit systematic reviews and literature syntheses related to treatment of prevalent conditions affecting Medicare beneficiaries.

The federal stimulus legislation enacted in 2009 (American Recovery and Reinvestment Act, or ARRA) dramatically advanced federal support for CER by providing $1.1 billion for the Department of Health and Human Services (HHS) to set priorities for and fund comparative studies. Much of the money went to AHRQ and the National Institutes of Health (NIH) to support CER projects and infrastructure development.

This year's health reform legislation built on ARRA by establishing PCORI as an independent, non-profit organization. The initiative's $500 million annual budget, beginning in 2014, will be funded largely by a 1% tax on health insurance premiums—a strategy designed to insulate the program from the highly political annual Congressional appropriations process and provide more stability and predictability.

The PCORI board members, who were announced by the Government Accountability Office (GAO) in late September, represent payers, providers, patients and industry, with an emphasis on women and minorities. NIH director Francis Collins and AHRQ chief Carolyn Clancy are on the panel, but do not chair it; that honor goes to UCLA Vice Chancellor and Dean Eugene Washington, with Steven Lipstein, president of the non-profit BJC healthcare system, as vice-chair. Biopharmaceutical industry representatives include Pfizer Chief Medical Officer and Senior Vice-President Freda Lewis-Hall, Harlan Weisman, head of medical devices and diagnostics at Johnson & Johnson, and Richard Kuntz, senior vice president of Medtronic. These three board members reflect industry efforts to gain a seat at the table, to keep the program independent of the federal government, and to establish a transparent process for authorizing studies and releasing research findings.

Almost as important as the structure of PCORI is the role of its methodology committee, to be named shortly by GAO. That committee's assignment is to define appropriate CER study designs and methods and submit initial recommendations in a report to Congress in only 18 months. The panel will weigh criteria for internal validity, generalizability, feasibility, and timeliness of CER studies. Selecting appropriate comparators and determining strengths and weaknesses of observational studies versus randomized controlled trials (RCTs) are key tasks, and are sure to ignite debate on the value of "pragmatic" clinical trials and observational studies, the ethics of conducting RCTs on available treatments, and challenges in designing studies that include diverse subgroups. Ideally, the process of developing evidentiary standards and common definitions for multiple CER activities and processes will link the many diverse guidelines and methods set by regulators and various payers.

An important consideration for industry is whether the demand for more information on how drugs and clinical treatments work in real-world settings will stymie innovation by expanding the scope of data needed to bring new drugs to market. The US FDA does not require comparative or cost information to approve a new drug, although some foreign regulatory authorities do so. Many sponsors now include comparative and clinical-use measures in preapproval trials to meet demands of private payers, and decisions on advancing from Phase 2 to Phase 3 studies increasingly weigh the feasibility of gathering evidence of product value during development. Biopharmaceutical companies oppose mandates to provide such information as a condition of FDA approval. Yet adoption of CER research methods and standards by PCORI is likely to shape study processes for all effectiveness and outcomes research, including studies required by the FDA as part of postmarketing oversight.


Whether more comparative research will actually limit healthcare spending remains to be seen. Analysts project that PCORI will reduce federal healthcare spending by about $3 billion over 10 years—just about what the government will spend on the CER program. And that calculation assumes that more comparative information will lead to changes in physician practice and patient choice.

More on CER

Potential savings are limited, moreover, by Congress's stipulation that Medicare cannot use CER to establish cost-effectiveness thresholds, set practice guidelines, or make coverage or payment recommendations, as done by NICE. Even so, private insurers and payers are free to tap CER evidence in their coverage decisions, as they have done for years, and more outcomes studies will support efforts by payers to negotiate lower rates and steer consumers to more high-value care options. At a CER briefing last month sponsored by Health Affairs, Harvard researcher and former Medicare official Steven Pearson proposed that Medicare reward innovation by paying higher prices for medical products that can document superiority, but only a comparable or "reference" price for those that demonstrate comparable clinical effectiveness.

At the same time, efforts to limit or curtail treatment choices will remain difficult and will require a very high threshold of evidence. "CER is not a panacea or a silver bullet," stated Kavita Patel, director of health policy at the New American Foundation, at a CER summit in September. Gail Wilensky, senior fellow at Project Hope, said she's "cautiously optimistic" about the progress so far, but acknowledged that CER remains a "very fragile concept" that "a lot of people still want to torpedo."

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