Study: Drug company evidence sent to plans is of variable quality

September 1, 2007

NATIONAL REPORTS-An opportunity for drug companies to voluntarily provide detailed evidence of their products' cost effectiveness to existing alternatives is showing progress-but is still far from successful, according to industry experts.

NATIONAL REPORTS-An opportunity for drug companies to voluntarily provide detailed evidence of their products' cost effectiveness to existing alternatives is showing progress-but is still far from successful, according to industry experts.

Covering 115 requests and submissions by drug makers, the study found that drug companies voluntarily provided economic or cost-effective analysis about 46% of the time. When economic analyses were submitted, they had relatively low levels of compliance with Academy of Managed Care Pharmacy (AMCP) standards. In analyzing cost-effectiveness, only 17% of the 115 submissions by drug makers compared their new drugs with the most relevant or cost-effective treatment alternatives.

"Admittedly, we must say that this initial study had mixed results," says Ed Wong, PharmD, vice president of Premera's Pharmacy Services. "Less than half of the responses actually included any cost-effectiveness economic analysis at all. Of those that did, two out of three mixed apples and oranges-using non-relevant treatment alternatives. That is to say that they didn't use the gold standard for comparisons. Instead, they used treatment alternatives that were less comparable than existing alternatives.

Premera's President and Chief Executive Officer Gubby Barlow tells MANAGED HEALTHCARE EXECUTIVE that this study proves that "right now the managed care industry has a proven method to capture and compare cost-effectiveness of emerging and existing drugs. However, the pharmaceutical industry must provide much better information overall for this to be effective."

According to Dr. Wong, in the drug approval process, the FDA approves the drug as well as the product label or package insert. "Typically, this is all the prescribers see," he says. "That said, healthcare professionals can make 'unsolicited requests' as they are known in FDA parlance. The dossier request is basically a blanket unsolicited request. Any clinically qualified person-MD, pharmacist, nurse, etc.-working for a payer can request the information."

According to Dr. Wong, to be AMCP format-compliant, the pharmaceutical company should provide:

At the end is a "value statement"-a two-page document in which the manufacturer is asked to summarize the value proposition for the drug. Then, a bibliographic section.