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The Official News & Technical Journal Of The International Society For Pharmacoeconomics And Outcomes Research

Diana Brixner PhD, 2007-2008 ISPOR President and Associate Professor and Chair of the Department of Pharmacotherapy and Executive Director of the Pharmacotherapy Outcomes Research Center at the University of Utah College of Pharmacy, Salt Lake City, UT, USA

Comparative Effectiveness: What Are We Comparing?

A new term -- “comparative effectiveness” -- has been introduced to our outcomes vocabulary, and many of us are struggling with the definition. The reason for this uncertainty is most likely a combination of perspectives, national experiences, and roles--researcher, policy maker or payer. As an international organization of health care researchers and policy makers from various settings including academia, research organizations, industry, health insurers and payers, we need to collectively embrace our differences in perspective, and therefore the alternative ways we may each define and utilize the terms of our science.

The United Kingdom has a well recognized approach for evaluating health technologies by the National Institute of Health and Clinical Excellence (NICE) [1], whereby the outcomes of using all technologies are translated into a common denominator based on the Quality Adjusted Life Year (QALY), and judged by the incremental cost per unit of health gain. This approach is inherently a societal approach, focused on the indirect benefit of quality of life and considered across all therapeutic areas equally. Comparative effectiveness in this context includes quality of life as an effectiveness measure, and the costs to gain that benefit.

Contrast this with the recently proposed approach by the Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen (IQWiG) [2] in Germany, where the focus is on the benefit vs. cost of a new therapy within a therapeutic area only. Although the principle of not restricting any benefit of therapy because of cost was initially intended, the recognition of the non-sustainability of such an approach has led to the development of a system for the economic evaluation of new drug therapies and other technologies. The determination of value across therapeutic areas is left to the decision making bodies designated by law. In the German system it is also important to note that the perspective is narrower than society at large, and instead represents that of the community of citizens insured by the Statutory Health Insurance of the country. In this case, effectiveness measures would be the clinical outcomes, e.g., blood pressure lowering for hypertension or A1C lowering for diabetics, and the direct costs of technologies in each of these areas to the insurance provider.

The listing of reimbursed medicines for Australian citizens is called the Pharmaceutical Benefits Scheme (PBS). The Pharmaceutical Benefits Advisory Committee (PBAC) also considers both cost and effectiveness, among other factors, when reviewing an application to list a new medicine on the PBS, referred to as a “value for money” assessment. Once a medicine has been recommended by the PBAC, it is referred to the Pharmaceutical Benefits Pricing Authority (PBPA) for consideration who then advises the Health Minister on the pricing of medicines on the PBS. Recommendations are referred to the Minister, or to the Cabinet, if the estimated annual cost to the PBS is greater than AU$10 million in any of the first 4 years of listing, for approval. In this system, comparative effectiveness again takes a broader view, clearly including both effectiveness and cost.

In the United States we have been engaging in ongoing discussions about the establishment of a comparative effectiveness program intended to provide better health outcomes and value nationwide. However, the diverse system for delivery and payment of health care in this market is not conducive to a single approach in combining outcomes and costs collectively in decision making. Health care spending in the United States currently accounts for 16% of the gross domestic product (GDP). Despite the significant higher level of spending-both as a % of GDP and in real per capita terms-in the U.S. vs. other developed countries such as Australia, Germany, and Great Britain (where spending ranges from 7-10% of GDP), there is little evidence of improved health outcomes in this country [3, 4]. A formal comparative effectiveness center will provide an opportunity for clinical effectiveness and observational data to complement currently available information from selective clinical trials in controlled environments. Collectively, these data can enable clinicians to improve performance, consumers to make more informed decisions, and payers to set medical policies that improve quality and value. In the United States, however, there is an active debate about whether cost should be an integral part of comparative effectiveness assessments performed by a national body. Perhaps the best approach currently for the United States is for comparative effectiveness research to explicitly inform considerations of cost-effectiveness. At a minimum, recognizing that comparative effectiveness should not focus only on clinical outcomes, but should also consider important measures of effectiveness such as patient-reported outcomes, including healthrelated quality of life, patient satisfaction, activities of daily living, and work productivity as relevant to the various U.S. stakeholders. In a letter to the Congressional Budget Office, ISPOR leaders have pointed out that if we appropriately execute comparative effectiveness studies, then the cost-effectiveness analyses will improve based on a more accurate denominator. We recognize the diversity across the United States in health care budgets, practice patterns, and cost levels, and we acknowledge and recognize the necessary flexibility in the interpretation of comparative effectiveness and cost-effectiveness by health plans, employers, government payers, and policy makers. Therefore, the varied perspectives of the U.S. prohibit a country-specific or country-wide definition of comparative effectiveness- and certainly cost-effectiveness.

Regardless of our individual or country perspectives, the expertise of ISPOR's membership in outcomes research, economics, and health policy can assist in the ongoing discussions of these important issues. For example, we must continue to debate the appropriate scientific methods of incorporating economic factors in assessments in order to provide relevant information for decision makers across perspectives. Clinical effectiveness will be defined by data from randomized clinical trials, retrospective and prospective observational data, and other sources. Cost considerations by patients, payors, providers, and society as a whole will be incorporated by individual stakeholders as appropriate to assure a foundation for informed health care decisions.

As a collective membership of health care researchers, policy makers and payors around the world, where both comparative effectiveness and cost-effectiveness information are integrated into the health care decision making process in various ways, we can all learn from our diverse experiences.

3. Orszag PR. (2007). Challenges of Health Care Costs,
Congressional Budget Office.
4. Wilensky GR. Developing A Center For Comparative
Effectiveness Information. Health Aff 2006;25: w572-85.


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