Health plans to gain more comparative data on drugs

February 1, 2005

AHRQ will communicate results to Medicaid, Medicare and plans.

AHRQ is launching the program by funding reviews of scientific literature on the outcomes from various treatments for a list of priority conditions: ischemic heart disease, cancer, asthma, stroke, arthritis, diabetes, dementia, pneumonia, stomach ulcers, and depression. AHRQ is not supposed to set national standards of care, but will communicate the results to Medicare, Medicaid, plans, prescription drug plans, and the public. The initiative is likely to lead to more common agreement on the relative effectiveness of certain drugs and other interventions and help physicians and patients make informed treatment choices.

In addition to government involvement in this area, private insurers and payers are supporting more comparative studies of similar drugs, as seen in the growth of the Drug Effectiveness Review Project operated by Oregon's Center for Evidence-based Policy Support. The Project is providing 11 states and other organizations with head-to-head comparisons of drugs that treat common health problems such as diabetes, migraine and cholesterol. The prime objective is to help public and private health plans select the most effective and cost-effective drugs for formularies, but analysts are likely to pay more attention to the comparative safety of similar drugs.

The panel acknowledged, however, that it is feasible for the U.S. to establish a large-scale commercial system to reimport low-cost prescription drugs from Canada, but that such a system would be very expensive to oversee and would not save consumers much money in the end. The report [available at http://www.hhs.gov/importtaskforce/report1220.pdf] advises Congress to permit legal importing only for certain high-volume, high-cost drugs. Such an initiative would require a system for product tracking, pedigree maintenance and frequent import sampling by FDA and probably would cost hundreds of millions of dollars to establish and maintain. These costs, combined with wholesaler transaction fees, would further erode any health care savings and dry up industry revenues that otherwise would fund new drug development.

Although the panel's conclusions may be valid, the report was roundly criticized for presenting the same old Bush administration scare tactics largely to protect U.S. manufacturers from foreign competition. And just in case some legislators keep pushing for legal drug importing, Canadian health officials said they might enact new laws and policies to block massive drug exports to the U.S. by Canadian online pharmacies – apparently with strong encouragement from White House trade officials.

JUST ONE FACTOR The U.S. Pharmacopeia made some modest changes to its final model formulary guidelines for Medicare prescription drug plans (PDPs), but pleased MCOs by retaining the basic formulary structure that it proposed last August (2004). Even though pharmaceutical manufacturers lobbied hard for more formulary categories that that would require PDPs to cover more drugs, the guidelines didn't cause much of a stir when they were released in early January because Medicare officials made it clear that adherence to the USP structure is only one factor that it will consider in deciding whether a PDP provides adequate drug coverage for seniors.