Biotechnology Healthcare - September/October 2008 - (Page 48)

HEALTH PLAN CONFIDENTIAL “The FDA does not require cost-effectiveness data. Does the drug work? Is it better than a placebo? Are the side effects tolerable? If yes, then the FDA will approve it,” says Mark Rubino, MHA, chief pharmacy officer with Aetna Pharmacy Management, in Hartford, Conn. Last February, a U.S. Food and Drug Administration advisory committee voted 5–4 against approving bevacizumab for advanced breast cancer because the clinical trial found that although the drug significantly slowed the progression of cancer, it did not significantly extend life. The FDA went against the panel’s recommendation and approved the drug anyway, a decision that led Republican Sen. Charles E. Grassley of Iowa to ask the Government Accountability Office to investigate the decision and others regarding drugs that “appear to have little to no effect in protecting lives and increasing health.” But even if the FDA did not approve Avastin for advanced breast cancer, the way the coverage and payment system works in the United States, patients would still have access to the drug off label as long as it is listed in a compendium, a reference compiled by cancer specialists. The Centers for Medicare and Medicaid Services has taken steps toward looking at cost-effectiveness. But no federal agency conducts rigorous evaluations for each new drug, and private technology assessments are expensive undertakings. How are payers to determine value? plains that from an insurer’s perspective, side effects sometimes cost just as much money as the primary disease. “We found some of the newer drugs for rheumatoid arthritis, Crohn’s disease, and psoriasis are pretty effective in treating the symptoms and preventing the onset of more severe ones, but the side effects can be significant, like very serious infections. What we are looking at is the cost of those severe side effects. Then we can rank the drugs that treat a specific disease, as well as rank them in terms of how we contract with manufacturers and how we make decisions about first-, second-, and third-line therapy.” HOW TO DECIDE One cost-effectiveness metric, the Quality Adjusted Life Year (QALY), is a tool used to capture quality-of-life gains, looking beyond patient survival. Under the QALY drugs are deemed cost-effective in the sense that the overall health benefits achieved are worth the cost. For example, cholesterol-fighting drugs that cost just a few thousand dollars per QALY saved are cost-effective treatments because they can prevent future heart attacks. In the United Kingdom, although there is not a cutoff value, NICE recommends that drugs and treatments have a QALY at or below $31,000 to $46,000. “QALYs are used by NICE in the United Kingdom and by the Canadian Agency for Drugs and Technologies,” says Elan Rubinstein, principal of the consulting firm EB Rubinstein Associates, in Oak Park, Calif. But in the United States, payers, including Medicare, generally have shied away from using QALYs in making coverage decisions. Many medical directors dislike the QALY because it is difficult to relate QALY data to their responsibilities; in other words, it doesn’t always tell them what they want to know. Rubino thinks there is a better way to measure costeffectiveness. “We look at every condition and the side effects of particular drugs, so the cost benefit may not be so much that it is more effective, but that it is more beneficial because there are fewer side effects,” says Rubino. He ex- TO QALY OR NOT TO QALY? So is the QALY metric a good academic exercise but more or less meaningless in the real world? “QALY is not a useless tool,” says Rubinstein. “It’s the best tool available to link the benefits to the costs of a drug, device, or service. It’s limited because the benefits may be intermediate outcomes that not everyone agrees are valid, or may be difficult to measure, or may have different levels of importance for different audiences.” QALY limitations may arise from an economic standpoint: Why should one payer spend the money to prevent a disease that is years down the road from developing? The drug or therapy will cost them money today, but will potentially save them nothing in the future because another payer will benefit from the preventive treatments. Another challenge in putting a price tag on the cost of one’s health is that many of the high-priced cancer drugs are palliative rather than curative, prolonging the eventual worsening of the disease. Rubino says that can be a challenge, “because the cost equation is a little more difficult to get a return on, at least in the short term.” Probably the biggest difficulty in analyzing cost-effectiveness is the mixture of public and private payers in the United States, each of which have unique reasons for making formulary decisions. Without a common motivation for evaluating a drug’s cost-effectiveness, the QALY may bridge enough differences to help to guide payers until a more commonly accepted tool is developed. REFERENCE Jack A. Dose of reality: health services curb drug costs. «http://us.ft.com/ftgateway/superpage.ft?news_id= fto062320081419096427&page=2». Accessed Sept. 3, 2008. NICE (National Institute for Health and Clinical Excellence). NICE drug reviews terminated when manufacturers fail to submit evidence. June 25, 2008. «http://www.nice.org.uk/media/ BAC/D0/2008040Terminated.pdf». Accessed Sept. 4, 2008. Office of Fair Trading. The Pharmaceutical Price Regulation Scheme: An OFT Market Study. February 2007. «http://www.oft.gov.uk/shared_oft/reports/comp_policy/ oft885.pdf». Accessed Sept. 3, 2008. Amanda Brower is a freelance business writer in Cleveland Heights, Ohio. 48 BIOTECHNOLOGY HEALTHCARE · SEPTEMBER/OCTOBER 2008 http://us.ft.com/ftgateway/superpage.ft?news_id=fto062320081419096427&page=2 http://us.ft.com/ftgateway/superpage.ft?news_id=fto062320081419096427&page=2 http://www.nice.org.uk/media/BAC/D0/2008040Terminated.pdf http://www.nice.org.uk/media/BAC/D0/2008040Terminated.pdf http://www.oft.gov.uk/shared_oft/reports/comp_policy/oft885.pdf http://www.oft.gov.uk/shared_oft/reports/comp_policy/oft885.pdf

Table of Contents Feed for the Digital Edition of Biotechnology Healthcare - September/October 2008

Biotechnology Healthcare - September/October 2008 Openers Editorial/David B. Nash, MD, MBA Contents At a Glance: Multiple Sclerosis Drug Track Personalized Medicine Healthcare Reform’s Effects on Biologic Access Breast Cancer Status Testing: A Crapshoot With Deadly Odds Trends, Issues, and Perspectives In the Management of MS So High-Tech, Yet So Simple The Evolution of Ascertaining the Value Proposition Specialty Pharmacy Employer to Employer Health Plan Confidential Trends

Biotechnology Healthcare - September/October 2008

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