Drug-Company Evidence Submitted to Health Plans is of Variable Quality, Study Finds

Business Wire, July 16, 2007

Drug Companies Voluntarily Compare Their New Drugs to Relevant Treatment Alternatives Only 17 Percent of the Time

BOSTON & MOUNTLAKE TERRACE, Wash. -- An opportunity for drug companies to voluntarily provide detailed evidence of their products' cost-effectiveness compared to existing alternatives is showing promise-but still far from successful.

That's one conclusion of a study looking at how closely information submitted to formulary committees at managed health care systems and pharmacy benefit management companies (PBMs) complies with national guidelines from the Academy of Managed Care Pharmacy (AMCP).

The findings of the joint study by researchers at Tufts-New England Medical Center, the University of Washington, and Washington-based Premera Blue Cross, are published in the July issue of The American Journal of Managed Care.

"We reviewed the quality of economic analysis in dossiers submitted to Premera Blue Cross-a large health insurer serving 1.7 million people-between 2002 and 2005," said Peter J. Neumann, ScD, senior author of the study and director of the Center for the Evaluation of Value and Risk in Health (CVER) at Tufts-New England Medical Center. "We also examined the clinical studies included in the submissions made to Premera in 2003.

"What we found was that the quality of information that drug companies submitted was of relatively poor quality, including sub-standard economic analyses," Neumann said.

The FDA does not consider cost-effectiveness a condition of approval. But health insurers and PBMs can ask for such information. Premera routinely requests the information to design benefits that reward consumers for purchasing the most cost-effective and high-quality drugs.

The study of 115 submissions by drug makers found that drug companies voluntarily provided economic or cost-effectiveness analyses about 46 percent of the time. When economic analyses were submitted, they had relatively low levels of compliance with industry standards. In analyzing cost-effectiveness, only 17 percent of the 115 submissions by drug makers compared their new drugs to the most relevant or cost-effective treatment alternatives.

The researchers did find that economic analyses of high-value or innovative products had higher compliance with recommended practices.

"Long-term sustainability of our healthcare system depends on improved lifestyle, adherence to evidence based medicine, and developing a much better ability to determine and pay for the most cost-effective and high-quality care," said Gubby Barlow, CEO of Premera Blue Cross. "I see cause for both hope and concern in this study. The study proves the industry already has the means to voluntarily provide information showing when a drug is not only high quality, but more cost-effective. However, much better information is needed overall if we are to bring health-care spending growth in line with overall economic growth.

"If pharmaceutical manufacturers know that the market will be asking them to show why a new and more expensive drug should be used, that could have a significant impact on long-term affordability of health care," Barlow said.

The joint study team also found substantial amounts of evidence submitted by drug makers in support of various off-label uses, but the information was less extensive and of poorer quality than for labeled indications.

"The take-away message here is that the guidelines contained in AMCP's Format for Formulary Submissions provide an opportunity for health plans to evaluate various drugs' clinical and economic information. But concerns persist about the quality of the information submitted, and continued vigilance and caution is warranted," Neumann said.

Co-authors of the study included Sean Sullivan, Ph.D. of the University of Washington, John Watkins of Premera Blue Cross, and Jennifer A. Palmer, MS, and Kathleen Bungay, both of Tufts-NEMC's Institute of Clinical Health Policy and Research Studies. The study's lead author, Harvard doctoral student Fernando Colmenero, MD, passed away in April 2006. The study was funded by the AHRQ in an award to the Harvard School of Public Health.

About Tufts-New England Medical Center and Floating Hospital for Children

Tufts-New England Medical Center is a world-class academic medical institution that is home to both a full-service hospital for adults and the Floating Hospital for Children. It has long been recognized as a leader in cancer care, cardiology and cardiovascular services, organ transplantation, neurosciences and pediatrics. The Medical Center is the principal teaching hospital for Tufts University School of Medicine and provides comprehensive inpatient and outpatient services for both adults and children in every area of medical specialization.

Today, Tufts-NEMC has 451 licensed beds and the staff includes approximately 500 full-time physicians. Founded in 1796 as the Boston Dispensary to care for sick and needy Bostonians, Tufts-NEMC is the oldest health care facility in New England. The Floating Hospital for Children, Tufts-NEMC's full-service children's hospital, began as a hospital ship more than a century ago.