Comparative Effectiveness Research: One Size Does Not Fit All
About This Event

Comparative effectiveness research (CER)--in which two or more medical treatments, including pharmaceuticals, are compared--is now widely viewed as an essential tool for cutting health care costs. Yet current research has done little to address whether CER is likely to reduce costs without sacrificing the quality of care. At this event, Listen to Audio


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University of Chicago economist Tomas J. Philipson presented his analysis (with Anirban Basu) of one of the largest CER studies yet conducted: the CATIE study of antipsychotics. These drugs, which are used mainly to treat schizophrenia, are an important component of Medicaid spending. Finding that patients do not all react the same way to older antipsychotics and newer, more expensive ones, the authors explained why reimbursement policies based on "one size fits all" CER results can reduce patient welfare while failing to save taxpayer money.

Discussing CER analysis, the CATIE findings, and the balance between government savings through the use of cheaper pharmaceuticals versus reductions in quality of life were Sean Tunis, former chief medical officer of the Centers for Medicare and Medicaid Services, and Bryan Luce, a widely published researcher on the clinical effects of pharmaceuticals.

Agenda
Event Summary

WASHINGTON, JUNE 23, 2010--A panel of experts gathered at AEI Wednesday to discuss the implications of comparative effectiveness research (CER) from economic, clinical, and policy perspectives. University of Chicago economist and AEI visiting scholar Tomas J. Philipson presented his analysis (with Anirban Basu) of the CATIE study comparing the effectiveness of first-generation and more expensive second-generation antipsychotic drugs, which are essential treatments for schizophrenia. He noted that, because of the heterogeneity in patient responses to the two drugs, public subsidies favoring older, cheaper drugs would sacrifice the quality of life of patients who respond better to newer drugs, offsetting any cost savings. Bryan R. Luce, senior vice president of science policy for United BioSource Corporation, provided examples of CER-related programs and provisions that demonstrate that federal agencies and recent legislation are already responsive to the variations in drug response among patient subpopulations. Sean Tunis, M.D., founder and director of the Center for Medical Technology, argued that while Philipson and Basu's paper provides a useful quantitative framework from which to assess CER, the drug class they analyze overstates the potential dangers of CER as an instrument to influence payment policy. The panelists agreed that more robust CER could fill in knowledge gaps for drugs and medical procedures but would be costly to undertake effectively.

  • "Suppose you run a standard comparative effectiveness study with the gold standard study of having a randomized clinical trial, and we obtain average treatment effects that tell us, let's say, that the first treatment is a winner. . . . If that's the case, then the first treatment is presumably a winner of the CER. But there's a large amount of people actually benefitting from the loser of the CER study. And that's going to be clearly important when you have responsive subsidies because responsive subsidies are going to generate more coverage for CER winners. But the problem with those kinds of subsidies is that they are product specific, as opposed to treatment effects, which may be patient-specific to the products. So what we're focused on currently in our work is to find ways to better match patients to treatments as opposed to declar[ing] certain treatments better than others, which I think is misleading when you have differential responses. So the question is not so much whether the blue or red pill is the better pill, the question is: for whom is the red or blue pill better?"
    --Tomas J. Philipson, AEI and University of Chicago

  • "It's clear to me that the CER policy presently being conceived at the U.S. national level includes, but does not equate, CER with head-to-head trials and does definitely include observational and randomized studies; is highly and politically sensitive to the heterogeneity problems; is particularly concerned with new methods development in large part to solve the heterogeneity challenge; is even hamstringing the CER process, especially through the quarry of funding. . . . In sum, the paper and the concern [are] highly consistent with the direction of what is supposed to happen. However, there is no assurance that CER development method policies will adequately solve the heterogeneity conundrum. It's a huge issue and very very difficult, and my guess is it will not be dealt with well and will be semi-ignored unless it is followed carefully from a policy and political standpoint."
    --Bryan R. Luce, Senior Vice President, United BioSource Corporation

  • "The premise of CER is if you get the decision makers more involved in the research process we won't have so many egregious gaps in the knowledge base from which we can make informed decisions. . . . So the notion that Tom [Philipson] pointed out and I think is the key premise of this paper--about heterogeneity of effects within subpopulations and studies--is absolutely recognized as a fundamental challenge for CER, and it's understood that the way these studies need to [be] designed will be oriented to providing insights about effects within subgroup levels."
    --Sean Tunis, M.D., Founder and Director, Center for Medical Technology Policy
--ROHIT PARULKAR
View complete summary.

Speaker biographies

John E. Calfee is an economist who studies the pharmaceutical industry and the Food and Drug Administration (FDA), along with the economics of tobacco, tort liability, and patents. He previously worked at the Federal Trade Commission's Bureau of Economics. He has also taught marketing and consumer behavior at the business schools of the University of Maryland at College Park and Boston University. While Mr. Calfee's current writings are mostly on pharmaceutical markets and FDA regulation, his academic articles and opinion pieces have covered a variety of topics, from patent law and tort liability to advertising and consumer information. He is the author of Prices, Markets, and the Pharmaceutical Revolution (AEI Press, 2000) and the coauthor of Biotechnology and the Patent System (AEI Press, 2007). Mr. Calfee also writes regularly for AEI's Health Policy Outlook series. He has testified before Congress and federal agencies on various topics, including alcohol advertising; biodefense vaccine research; international drug prices; and, most recently, FDA oversight of drug safety.

Bryan R. Luce is the senior vice president of science policy for United BioSource Corporation (UBC). Mr. Luce founded MEDTAP® International (now part of UBC), serving as its chairman, president, and chief executive officer until 2002. Previously, he held positions as director of Battelle's Centers for Public Health Research and Evaluation; director of the Office of Research and Demonstrations, Centers for Medicare and Medicaid Services; and senior analyst, Office of Technology Assessment of the U.S. Congress. Mr. Luce is a consultant to numerous government agencies and pharmaceutical and device firms worldwide, and he is a member or chair of socioeconomic and public health policy advisory boards for several leading pharmaceutical companies. Recently he was a member of the Medicare Evidence Development and Coverage Advisory Committee. He is a senior scholar with the Department of Health Policy, Jefferson Medical College; an adjunct senior fellow at the Leonard Davis Institute, University of Pennsylvania; and the author of more than ninety scientific publications, including three textbooks on technology assessment, health policy, and cost-effectiveness analysis. He founded the Bayesian Initiative in Health Economics and Outcomes Research. He is a past president of the International Society for Pharmacoeconomics and Outcomes Research and, in 2008, received the Society's Avedis Donabedian Outcomes Research Lifetime Achievement Award. A former Special Forces officer, Mr. Luce holds the rank as lieutenant colonel (retired), Medical Service Corps, U.S. Army Reserves.

Tomas J. Philipson is a visiting scholar at AEI and the Daniel Levin Chair in the Irving B. Harris Graduate School of Public Policy as well as an associate member of the department of economics at the University of Chicago. He was a senior health care adviser to the 2008 presidential campaign of John McCain and served in the Bush administration as the senior economic adviser to the commissioner of the Food and Drug Administration from 2003 to 2004 and subsequently as the senior economic adviser to the administrator of the Centers for Medicare and Medicaid Services from 2004 to 2005. Mr. Philipson is an editor of Forum for Health Economics & Policy and is on the editorial board of Health Economics and The European Journal of Health Economics. He has twice been the recipient of the highest honor of his field, the Kenneth Arrow Award from the International Health Economics Association, in 2000 and 2006. Mr. Philipson is the cofounder of Precision Health Economics, an adviser to the Gerson Lehrman Group, and a consultant for Compass-Lexecon and Analysis Group.

Sean Tunis, M.D., is the founder and director of the Center for Medical Technology Policy, an independent nonprofit entity focused on improving the value of clinical research for decision making by engaging a range of experts and stakeholders in study design and implementation. He advises numerous domestic and international health care agencies and organizations on issues of comparative effectiveness, evidence-based medicine, clinical research, and technology policy. Through September 2005, Dr. Tunis was the director of the Office of Clinical Standards and Quality and chief medical officer at the Centers for Medicare and Medicaid Services (CMS). In this role, he had lead responsibility for clinical policy and quality for the Medicare and Medicaid programs, which provide health coverage to over 100 million U.S. citizens. Dr. Tunis supervised the development of national coverage policies, quality standards for Medicare and Medicaid providers, quality measurement and public reporting initiatives, and the Quality Improvement Organization program. As chief medical officer, Dr. Tunis served as the senior adviser to the CMS administrator on clinical and scientific policy. He also cochaired the CMS Council on Technology and Innovation. Dr. Tunis joined CMS in 2000 as the director of the Coverage and Analysis Group. Before joining CMS, Dr. Tunis was a senior research scientist with the Technology Assessment Group, where he focused on the design and implementation of prospective comparative effectiveness trials and clinical registries. Dr. Tunis also served as the director of the health program at the Congressional Office of Technology Assessment and as a health policy adviser to the U.S. Senate Committee on Labor and Human Resources, where he participated in policy development regarding pharmaceutical and device regulation.

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AEI Participants

 

John E.
Calfee
  • Economist John E. Calfee (1941-2011) studied the pharmaceutical industry and the Food and Drug Administration (FDA), along with the economics of tobacco, tort liability, and patents. He previously worked at the Federal Trade Commission's Bureau of Economics. He had also taught marketing and consumer behavior at the business schools of the University of Maryland at College Park and Boston University. While Mr. Calfee's writings are mostly on pharmaceutical markets and FDA regulation, his academic articles and opinion pieces covered a variety of topics, from patent law and tort liability to advertising and consumer information. His books include Prices, Markets, and the Pharmaceutical Revolution (AEI Press, 2000) and Biotechnology and the Patent System (AEI Press, 2007). Mr. Calfee wrote regularly for AEI's Health Policy Outlook series. He testified before Congress and federal agencies on various topics, including alcohol advertising; biodefense vaccine research; international drug prices; and FDA oversight of drug safety.

 

Tomas J.
Philipson
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