What happens when a government agency in charge of assessing the effectiveness of medical interventions crunches numbers and tells pharmaceutical companies their drugs are just too expensive? Sometimes, the government gets a better deal.
Twice last week, the much-feared National Institute for Health and Clinical Excellence (NICE) in England and Wales was a factor in drug companies offering discounts to the National Health Service (NHS). In one case, it was an explicit NICE proposal to have the manufacturer of Velcade, Johnson & Johnson subsidiary Janssen-Cilag, rebate the cost of the drug for those multiple myeloma patients who do not respond after four cycles of treatment. In the second case, Pfizer decided to cut the cost of its kidney cancer drug Sutent in anticipation of an eventual NICE review.
While the United States has only limited practice at trying to compare the relative effectiveness of drugs, should the costs of Medicare Part D start rising over projections, the calls for better control of Medicare costs could include proposals for an effectiveness agency. Writing for Health Affairs, Project HOPE senior fellow Gail Wilensky suggested one placed in the government, founded as a quasi-government agency, or as a private-sector institute. The agency, Wilensky writes, “would fund prospective trials on key questions for which comparative effectiveness evidence was found missing, in addition to funding systematic reviews of existing research.” Wilensky is testifying about her proposal this morning at a House Ways and Means Health Subcommittee hearing.
However, unlike NICE, which binds the NHS funding to its decisions, Wilensky writes that a U.S. comparative effectiveness center should inform, not mandate: “The appropriate function, structure, placement, and financing of a comparative effectiveness center in the United States will need to reflect this country’s political sensitivities and the unique public/private structure that has developed here. The function of a comparative effectiveness center in the United States would be to provide credible, objective information on the comparative effectiveness of alternative therapies and technologies, not to make centralized coverage decisions. The information would be available to any payer and also could be used for better decision making by patients and providers.”
It may take skyrocketing costs for the United States to take such a step, however. Wilensky writes: “To date, the United States has been unwilling to include statutory language that would allow cost-effectiveness information to be used in making coverage decisions even in large public programs such as Medicare, nor has there been any inclination to make all payers use the same coverage or reimbursement decisions. Although continued increases in health care spending that are much greater than the economy’s growth could change this history, it does not appear likely anytime soon.”
It’s often political suicide to suggest anything that smacks of health care rationing in the United States. On the other hand, countries that have attempted to assess the cost-effectiveness of medicines have a much better track record at controlling medical inflation. It could be the future in the United States.
In the New York Times last week, David Leonhardt noted that all three leading Democratic presidential candidates have proposed comparative effectiveness information institutes. So far, Leonhardt wrote, Hillary Clinton, Barack Obama, and John Edwards, like Wilensky, are all saying that the institute would inform, not mandate. “But campaign advisors acknowledge that any institute will ultimately help set insurance payments, and they are not the only ones pushing the idea. Peter Orszag, the head of the Congressional Budget Office, has mentioned it when talking about the fiscal disaster that awaits if Medicare spending isn’t slowed,” according to Leonhardt.