AHCPR NEEDS TO BE "EXPLICITLY" INVOLVED IN DEVELOPING COST- EFFECTIVENESS RESEARCH, HHS' LEE TELLS REP. WYDEN; AHCPR BUDGET IS $178.1 MIL, UP $19 MIL. IN FY 1995

HHS' Agency for Health Care Policy & Research needs to be involved "explicitly" in developing cost-effectiveness data for prescription drags and medical technologies, HHS Assistant Secretary for Health Philip Lee, MD, told Rep. Wyden (D-Ore.) during a Feb. 8 House Energy & Commerce/Health Subcommittee hearing.

"We need to get that information; we need to be looking at that with NIH with respect to clinical trials;...we need to be doing that in the Agency for Health Care Policy and Research," Lee said.

In his prepared testimony, the HHS assistant secretary highlighted what he considered to be "the most important and perhaps most promising of these strategies" -- for preserving quality and controlling costs -- "gathering and disseminating better cost-effectiveness data on a variety of medical treatments." The Clinton Administration is "vitally interested," Lee said, "in appropriate strategies to further strengthen the emphasis on cost-effectiveness research throughout the health care system and the translation of that research into quality health care."

FDA Commissioner Kessler also has been discussing cost- effectiveness data with the caveat that the agency cannot use that data as grounds for product approvals. Kessler told a pharmacoeconomics symposium in November: "Perhaps it is appropriate that we be involved...because in the end, this is a fundamental patient care issue" ("The Pink Sheet" Nov. 1, 1993, p. 8).

Declaring that "it is not enough merely to focus on drug coverage and pricing," Lee presented a number of practices to consider in the context of cost-effectiveness. These include: an increased focus on medical outcomes data; expanded use of practice guidelines such as those published by AHCPR; revised coverage guidelines; continuing medical education in clinical pharmacology; drug utilization review; and, reiterating his interest from the 1970s, "patient package inserts, to get effective information directly to patients on the proper way to use prescription drugs." Lee was a principal proponent in the Carter Administration of a proposal for PPIs.

Genentech and the Biotechnology Industry Organization are promoting the idea of AHCPR as a possible cost-effectiveness study center; the company's option paper on alternatives to the Clinton health care reform plan suggests that rather than create an Advisory Council on Breakthrough Drugs, the Administration could "consolidate, enhance and refocus the technology assessment activities of agencies such as the Agency for Health Care Policy and Research" ("The Pink Sheet" Feb. 7, p. 4).

Rep. Wyden used Lee's testimony on AHCPR's purported willingness to move forward with cost-effectiveness research as a way of bringing up some carrot-and-stick proposals for making cost-effectiveness data a part of pharmaceutical pricing.

Looking at Lee's written testimony, Wyden said: "You're satisfied, then, with the kind of information you're getting from the private sector on the quality of various kinds of pharmaceuticals and cost-effectiveness? When I meet the buyers, the HMOs, and others, they tell me they're getting very little in the way of good, objective information," Wyden said.

Lee responded: "Well, I would say we're not satisfied at the present time, but I think that there has been a good deal of progress made, particularly in recent years, as we have moved toward more managed competition approaches, and this kind of more prudent buying on the part of large plans, though I don't think any of us are satisfied yet that that information is fully available."

The Oregon Democrat, "in raising the issue of possible incentives for drug and medical technology cost containment through cost-effectiveness data, also brought up the issue of funding for those incentives. Wyden told Lee: "Your vision is a laudatory one of really being able to compare one product to another. But I think we're dreaming if we think that the government has enough money to do it."

Lee concurred, stating: "Clearly the manufacturers need to be developing that information, because clearly it will be important. Just how we do that, how we create incentives to do that, I think is a question that we have to work together to resolve."

"I want the record to reflect," Wyden said to the heating, "that Dr. Lee is interested in incentives to get the private sector to do this research."

Wyden then threw out to the heating a number of incentives for drug companies to provide early information to the government, indicating that he still is open to options presented by the government and by the pharmaceutical and medical technology industries.

"For example," Wyden said, "we could give [cost-effectiveness data] out over an electronic bulletin board, so that HMOs and insurance companies could get it. I'd like to see it be used in conjunction with this matter of marketing plans that has been certainly an issue important to the companies."

"On this matter of the proposed price review board," Wyden continued, ["we could say that] companies that bring the cost- effectiveness and clinical effectiveness data to the government would be exempt from the price review board.... Why don't we say that if you earn it through giving us good, objective, verifiable data, maybe we say you're exempt from the price review board."

The last Wyden proposal picks up a theme introduced by Senate Special Committee on Aging Chairman Pryor (D-Ark.), who recently said he may try to use drug patent terms as awards as well as threats to keep drug industry pricing in line. Sen. Pryor raised the idea of patent flexibility at a Jan. 31 press conference, where he said he will be introducing legislation on drug price restraints "sometime this spring" ("The Pink Sheet" Feb. 7. p. 6).

Glaxo Chairman and CEO Charles Sanders, MD appeared to respond favorably to Wyden's concept of drug price review exemption as did Alliance for Aging Research Executive Director Daniel Perry.

Sanders presented the idea of "a structure which could be devised to the mutual satisfaction of industry and the government that would employ a public-private partnership...[the benefit of which] would be by developing information relating to cost- effectiveness and the trade-offs therefore between the two, that you would really obviate the need for a drug price review board. You'd have all that information available and disseminated by the government." Perry described Wyden's proposal as "very interesting ....I believe that any rigorous outcomes research in this area ...would probably underscore even more the cost-effectiveness of pharmaceutical drugs." Incentives to "encourage better outcomes research would probably point us in the right direction."

The Clinton budget, sent to Capitol Hill Feb. 7, bumps AHCPR's budget up by $19 mil. for fiscal 1995, an 11.9% increase from fiscal 1994 of $178.1 mil. Activities fitting under the heading "Research on health care costs, quality, and access" although marked for a $21 mil. loss on paper, will receive a $9 mil., or roughly 15%, increase in real funds through "mandatory set-asides, or 'evaluation funds,' assessed to other agencies within the Public Health Service," an AHCPR spokesperson explained.

Cost-effectiveness-related studies currently run out of AHCPR include the agency's Medical Treatment Effectiveness Program (MedTEP), which has 16 pharmaceutical projects that include cost- effectiveness measures, and the Patient Outcomes Research Teams (PORTS), which emphasize cost-effectiveness through emphasis on research, dissemination, practice guidelines and data development. In addition, HHS' Office of Disease Prevention and Health Promotion (ODPHP) studies cost-effective drug therapy in connection with their Clinical Preventive Services.