Expect comparative effectiveness research to play a more notable role in payer policies, programs

June 1, 2011

Comparative effectiveness research will take a more prominent role in payer policies and programs, as the Patient-Centered Outcomes Research Institute will increase CER and CER will be used by Medicare and managed care organizations in development of clinical policies and programs, according to a recent audio conference.

Key Points

Comparative effectiveness research (CER) will take a more prominent role in payer policies and programs, as the Patient-Centered Outcomes Research Institute (PCORI) will increase CER, and CER will be used by Medicare and managed care organizations (MCOs) in the development of their clinical policies and programs, according to an Avalere Health audio conference.

"Medicare, just like private payers, has been increasing its use of evidence in a variety of ways to try to ensure better value for every dollar spent," said Steven D. Pearson, MD, MSc, FRCP, president of the Institute for Clinical and Economic Review.

"The increase in funding for CER will provide more data, and specifically, more helpful head-to-head comparative data," Dr Pearson continued. "A dramatic shift in the way Medicare covers and pays for new drugs and other treatments seems unlikely in the short term, but over time all payers will expect better data comparing services head-to-head. This kind of information is not only helpful in supporting policies such as tiered formularies, but it is just as critical in helping doctors and patients make more effective, and therefore ultimately less costly, healthcare decisions."

Additionally, future funding of the PCORI will be largely from the Medicare Trust fund and contributions from health insurance and self-insured health plans. Given the size of the Medicare population, the impact of its decisions on all US payers, and its role in funding future CER through PCORI, CMS' interest in CER will have a direct impact on patient and provider access and payment.

CMS has demonstrated interest in evaluating the comparative effectiveness of expensive, high-profile drugs paid for in Medicare Part B through its national coverage determinations (NCDs) process. Examples include:
     • 2007: NCD on erythropoiesis-stimulating agents for non-renal disease indications
     • 2010: NCD autologous cellular immunotherapy for metastatic prostate cancer (Provenge)

"In these NCDs, CMS utilized HTAs conducted by the Agency for Healthcare Research and Quality [AHRQ] and other comparative studies to inform its final decisions," Carino said. "CMS' increased interest in NCDs on drugs-such as Provenge-is expected to continue in the future."

The ARRA investments significantly increase CMS' data infrastructure to analyze comparative data, according to Carino. For example, one of the ARRA awards was for $10 million-plus to establish a Medicaid Analytic Extracts (MAX) data warehouse with 1999 to 2006 data and additional years as they become available. As part of this award, a data extraction system will be developed to deliver customized MAX data extract files to the research community for public use.

"This is significant because the MAX database will effectively build a robust repository of Medicaid and Children's Health Insurance Program [CHIP] data for CMS and the public to use when conducting CER on specific products of interest to the Medicaid and CHIP populations," Carino explained.

In Avalere's analysis of all NCDs initiated as early as January 2007 and finalized as late as February 2011, it found that 55% of the NCDs considered CER, signaling that this type of evidence is considered by CMS in determining whether or not to cover a product or service.

Private sector entities, specifically payers, and public-private partnerships are similarly engaged in developing and advancing CER, according to Carino. "Payers have begun generating their own CER to inform coverage and reimbursement decision-making-with a particular emphasis on utilization management strategies and formulary design," she said. "For example, WellPoint, United Healthcare, and Medco Health Solutions, all have research subsidiaries conducting CER. Likewise, leading provider groups are increasingly interested in applying CER to decision-making to incent utilization of clinical best practices and reduce cost of care."

"Use of evidence of comparative effectiveness has the potential to improve the quality and value of the healthcare we receive," Dr McDonough said.

Available research on the comparative effectiveness of drugs within a therapeutic class has been used by MCOs in developing drug formularies. "A recent example of comparative effectiveness research is the Comparison of AMD Treatment Trials [CATT (see story "Ranibizumab and bevacizumab show equivalent effects on visual acuity in patients with neovascular AMD"] sponsored by the National Eye Institute, comparing Avastin and Lucentis for wet age-related macular degeneration," Dr McDonough explained. "Monthly injections of either Avastin or Lucentis gave the same end results, as measured by vision testing, despite substantial differences in cost between the 2 drugs."

In the future, a drug with multiple established indications may be able to obtain preferred formulary status and premium pricing for 1 indication but not for other indications, said Dr McDonough. As a hypothetical example, he used infliximab (Remicade) because it is a drug with multiple indications; 2 of the major indications for Remicade are rheumatoid arthritis and psoriasis.

"In this hypothetical example, Remicade has been shown to be superior to other drugs within the therapeutic class for rheumatoid arthritis, but of similar efficacy to other drugs for psoriasis. In this hypothetical example, the Remicade could be formulary preferred-and command premium pricing-for the rheumatoid arthritis indication, but not be formulary preferred for the psoriatic arthritis indication," he said.

Expect changing evidence standards that products and services must meet for coverage and payment, said Carino. "With rising healthcare costs and the increasing number of interventions, physicians, payers, patients, and policy-makers want to know more about how different healthcare treatments and approaches compare," she said. "New federal and private sector CER investments generate evidence to answer this question and thus will likely be increasingly integrated in their decisions in the future."