Industry Perspective:
Understanding the Impact of Comparative Effectiveness Research

Charles A. Stevens, JD, MBA, is Vice President and General Manager, Reimbursement and Market Access, for PAREXEL.  He has more than 17 years of industry experience, including responsibility for strategic reimbursement, pricing, product distribution, pharmacoeconomics and payer marketing for both commercialized and non-commercialized products.  In a recent interview, Chuck discussed the rapidly changing landscape of comparative effectiveness research (CER).

How will the growing trend of healthcare payers requiring CER data affect the biopharmaceutical industry?

The fact that public and private payers are now looking to engage in CER will significantly impact the biopharmaceutical industry.  The main goal of CER is to analyze “real world” data on therapies to determine which ones are best for patients.  This focus on results from patients in realistic treatment settings is critical, because it requires an analysis of the therapies outside the confines of randomized, controlled clinical trials.  There is an on-going debate as to whether data gathered from research that does not include a placebo control can be relied upon when making an outcomes-based judgment about treatment superiority.  Even with that debate, payers are showing a willingness to incorporate CER data into their decision making regarding product coverage.   A number of private payers have already established formal CER policies, and many others are considering this approach.  For example, the Centers for Medicare and Medicaid Services relied on a CER study conducted by the Agency for Healthcare Research and Quality in making a recent decision not to issue any new treatment codes for novel products in the negative-pressure-wound therapy market. 

The real goal of CER is to determine which treatments, therapies and procedures produce better results for patients when considering clinical outcomes, safety and patient-reported outcomes –  in essence, determining the “value” of  the product or treatment.  The challenge for all stakeholders is that there are so many methods that can be used to capture and analyze data that it can be difficult to make valid comparisons based on different clinical trials and different data collection tools.

Biopharmaceutical companies will need to ensure that they develop data on new products that can demonstrate product value compared with other treatments to payers, providers and patients.  It seems clear that, in the long term, the CER trend will encourage product innovation and discourage “me too” product development.  To the degree that “me too” products are developed, the ability to charge a premium over other products and achieve commercial success is greatly reduced.

Drug development costs might also increase if more or larger trials are needed to gather comparative data.  While value-based medicine will encourage innovation, it will simultaneously increase the hurdles new products must clear to attain market acceptance.  The emphasis on CER could also accelerate the development of new diagnostics, preventive interventions such as vaccines, and personalized medicine as biopharmaceutical companies explore novel approaches to improving health outcomes.

CER will also have a major impact on the relationships between the biopharmaceutical industry and key payer groups.  Private payers and their largest customers – employers – are leading the way in the value-based treatment movement.  Because most of these companies are profit-driven, they are strongly focused on the cost of new therapies and how they will impact total treatment costs for a particular condition or group of patients.  The influence of Medicare and Medicaid in the US will also increase as programs expand to accommodate baby boomers and the increased number of Americans who gain Medicaid coverage under the Affordable Care Act.  Biopharmaceutical companies with new products must thoroughly understand the requirements of these major payers and formulate strong value propositions for the patient populations they cover.

What actions should biopharmaceutical companies be taking to prepare for this new era of evidence-based medicine? 

One of the biggest challenges for the biopharmaceutical industry in meeting this growing demand for information about the value of new products is that there are no standards or conformity about what types of data will be required by various stakeholder groups, or even an agreed-upon definition for CER.  Despite the absence of an industry-wide consensus on CER, the biopharmaceutical industry cannot wait for standards to be adopted before changing their approach to product development.  The industry must think beyond regulatory approval and focus on developing strategies that support both regulatory and payer approval. 

To support patient access and commercial success under the requirements of evidenced-based medicine, biopharmaceutical companies and their clinical research partners must immediately integrate some of the principles of CER into the earliest stages of the product development process.  This will ensure that clinical development includes the gathering of reliable data that demonstrates product value to patients, clinicians and payers.

In addition to incorporating the CER concept into their clinical trials, biopharmaceutical companies can take a number of other steps to strengthen their evidence-based research efforts, such as:

• Meeting with public and private payers early in Phase II to better understand the challenges facing payers in managing certain disease categories
• Honestly assessing current and in-development products to evaluate the impact CER requirements on the value and viability of the portfolio 
• Analyzing the portfolio mix (highly innovative vs. "me-too" vs. generic, for example) to weed out weak products and allocate resources to high value targets 
• Reviewing the product development decision-making process to ensure that the right products are being selected for the right reasons
• Examining shifts in influence among different stakeholders in a CER-based market, and involving  relevant stakeholders in modifying clinical study design to meet the demand value-based data
• Rethinking current commercialization models to determine their appropriateness in this new environment
• Working with industry groups, regulatory agencies, and payers to establish standards for CER and product value

Although CER is not a requirement for regulatory filings in the US, the message for the biopharmaceutical industry is that a strong value proposition is essential for every new product to support payer acceptance and optimal reimbursement.  By including payer interests about product value early in the development process, a company with a potential new product will be better prepared to demonstrate that product’s value to key payers and improve its chances for commercial success.