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Comparative Effectiveness: A Manufacturer’s Perspective
AHRQ 2007 Annual ConferenceSeptember 27, 2007
Peter Juhn, MD, MPH
Vice PresidentEvidence and Regulatory Policy
Johnson & Johnson Corporate OfficeNew Brunswick, NJ
732-524-6484
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Evolving Environment
Cost
Quality/Safety
Value
DriversChallenges
• Coverage and Reimbursement
• Evidence Review
• Quality Measurement
• Insurance Benefit Design
• HIT – EMR, PHR, Data Mining
Activities
Comparative Effectiveness
Pay-for-Performance
Benefit-Risk Determination
Coverage with Evidence
DevelopmentAccess to and Payment forInnovative and
effective products
Policies
Practice Variation
Aging Population
Rising Demand
Cost of Technology
Budget Pressures
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PatientsProviders
EmployerEmployer EmployerEmployer
PayerPayer PayerPayer
Pharmaceutical Pharmaceutical Manufacturers
Medical DevicesMedical Devices
IntegrateIntegratedd
Networks Networks
HospitalsHospitals
LTCLTCFacilitiesFacilities
OutpatientOutpatient
OtherOther
BiotecBiotechh
Distributor/Distributor/WholesalerWholesaler
RegulatoryRegulatoryAgencyAgency
Physicians Physicians
Payers/ Regulators
Healthcare Stakeholders
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PatientsProviders
EmployerEmployer EmployerEmployer
PayerPayer PayerPayer
Pharmaceutical Pharmaceutical Manufacturers
Medical DevicesMedical Devices
IntegrateIntegratedd
Networks Networks
HospitalsHospitals
LTCLTCFacilitiesFacilities
OutpatientOutpatient
OtherOther
BiotecBiotechh
Distributor/Distributor/WholesalerWholesaler
RegulatoryRegulatoryAgencyAgency
Physicians Physicians
Payers/ Regulators
Healthcare Stakeholders
Patient – “am I getting the best care?”
•Convenient
•Respectful/compassionate
•Trusted information about choices
•Lower out-of-pocket cost
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PatientsProviders
EmployerEmployer EmployerEmployer
PayerPayer PayerPayer
Pharmaceutical Pharmaceutical Manufacturers
Medical DevicesMedical Devices
IntegrateIntegratedd
Networks Networks
HospitalsHospitals
LTCLTCFacilitiesFacilities
OutpatientOutpatient
OtherOther
BiotecBiotechh
Distributor/Distributor/WholesalerWholesaler
RegulatoryRegulatoryAgencyAgency
Physicians Physicians
Payers/ Regulators
Healthcare StakeholdersProvider – “am I being rewarded for good work?”
•Better outcomes
•Higher reimbursement
•Increased volume
•More efficiency
•Chance to innovate
•Enhanced reputation
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PatientsProviders
EmployerEmployer EmployerEmployer
PayerPayer PayerPayer
Pharmaceutical Pharmaceutical Manufacturers
Medical DevicesMedical Devices
IntegrateIntegratedd
Networks Networks
HospitalsHospitals
LTCLTCFacilitiesFacilities
OutpatientOutpatient
OtherOther
BiotecBiotechh
Distributor/Distributor/WholesalerWholesaler
RegulatoryRegulatoryAgencyAgency
Physicians Physicians
Payers/ Regulators
Healthcare Stakeholders
Employer – “am I getting value for money?”
•Lower cost
•“Best care”
•Not unhappy beneficiaries/workforce
•Healthy productive employees
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PatientsProviders
EmployerEmployer EmployerEmployer
PayerPayer PayerPayer
Pharmaceutical Pharmaceutical Manufacturers
Medical DevicesMedical Devices
IntegrateIntegratedd
Networks Networks
HospitalsHospitals
LTCLTCFacilitiesFacilities
OutpatientOutpatient
OtherOther
BiotecBiotechh
Distributor/Distributor/WholesalerWholesaler
RegulatoryRegulatoryAgencyAgency
Physicians Physicians
Payers/ Regulators
Healthcare Stakeholders
Payer – “am I only paying for effective care?”
•Lower cost
•Predictability
•Better outcomes (influence on later costs)
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PatientsProviders
EmployerEmployer EmployerEmployer
PayerPayer PayerPayer
Pharmaceutical Pharmaceutical Manufacturers
Medical DevicesMedical Devices
IntegrateIntegratedd
Networks Networks
HospitalsHospitals
LTCLTCFacilitiesFacilities
OutpatientOutpatient
OtherOther
BiotecBiotechh
Distributor/Distributor/WholesalerWholesaler
RegulatoryRegulatoryAgencyAgency
Physicians Physicians
Payers/ Regulators
Healthcare Stakeholders
Regulator – “am I protecting the public health?”
•Safe and effective products
•Two types of challenges:
•Approving a drug later found to be dangerous
•Not approving a useful drug in a timely fashion
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PatientsProviders
EmployerEmployer EmployerEmployer
PayerPayer PayerPayer
Pharmaceutical Pharmaceutical Manufacturers
Medical DevicesMedical Devices
IntegrateIntegratedd
Networks Networks
HospitalsHospitals
LTCLTCFacilitiesFacilities
OutpatientOutpatient
OtherOther
BiotecBiotechh
Distributor/Distributor/WholesalerWholesaler
RegulatoryRegulatoryAgencyAgency
Physicians Physicians
Payers/ Regulators
Healthcare Stakeholders
Manufacturer – “am I being rewarded for safe and effective products?”
•Improved patient outcomes
•Recoup R&D investments
•Fair and transparent coverage process
•Clear evidence requirements
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Does it work? Is it safe? Regulatory Approval Relevant for covered population (i.e. Medicare over 65y)
When should it be used? Who will most benefit? Appropriateness guidelines Patient selection criteria
How does it compare? Is it definitively better? Earlier generation of technology Within same class of technology Rigor of comparative reviews
Key Questions about Products
What is the value? Can the value be captured? Is it cost-effective? Is it cost-saving? Is there an ROI? When? To Whom?
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Evidence Challenges
Availability of evidence Needs for evidence are increasing Large gaps in the existing literature Limited generalizability of trials data to real-world practice Unique challenges of devices
Distinguishing operator vs. product effects Short product life-cycles Feasibility of RCTs
Conclusions from the evidence Reconciling “average” population effects with individual
effects “Shelf-life” of evidence
Practical use of evidence Application of evidence to real-world medical decisions Provider “accountability” for using evidence
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The Promise of EBM
Properly developed and applied, evidence-based medicine can:
Stimulate the development of high quality information about treatments and devices
Enhance consistent and informed healthcare decision-making by physicians, patients, caregivers and payers
Support patient access to appropriate technologies Help establish the value of medicines, medical devices,
diagnostics and other health services Provide the basis for optimal use of health care resources Promote a more quality-focused and cost-effective
healthcare system that delivers superior patient outcomes
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The Perils of EBM
Potential for unintended consequences Justifies coverage decisions based purely on cost without
regard for overall effectiveness or value Freezes the pace of innovation to the current generation of
products Discriminates against new technologies Leads to prescriptive clinical protocols that do not allow for
physician judgment and consideration of patient preferences
Focuses too narrowly on clinical morbidity or mortality, ignoring a range of other important patient-reported outcomes (ease of use, compliance, functional status)
Changes to coverage policies occur haphazardly without clear rationale, transparency or accountability
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Comparative Effectiveness
What is J&J’s position on comparative effectiveness? Help establish the value of treatments Promote a more quality-focused cost-effective health
system Help physicians and patients make better decisions Be a way for manufacturers to differentiate products However, it is not the “silver bullet” as it will not
automatically solve our cost and quality challenges How should information from CE research be used?
Should inform medical decisions, not replace medical judgment with treatment formulas
Will need to reconcile “average” population effects and with impacts on individuals that reflect differences in side effects, intolerance, noncompliance, and quality of life
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How should it be linked to coverage decisions by payers? Should not serve the cost containment concerns of payers Might be most useful in informing treatment options and
assigning appropriate reimbursement premiums How should this information be communicated?
Share widely with all stakeholders, particularly providers and patients
Consider the dangers of incomplete understanding of results, particularly when communicated in an overly simplistic manner
Acknowledge that CE information can be incomplete, misleading, or misinterpreted
How should stakeholders be involved? Participate in framing the methods that will be used and
prioritizing the key therapeutic areas Promote transparency about the processes, findings,
limitations, and appropriate uses of the information
Comparative Effectiveness
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Definitions Comparison of “what to what”
Drug to drug; drug to procedure; disease management to not What will success look like – information output vs. impact on
care delivery Scope
Clinical decision dilemmas vs. population economics Synthesis of current evidence vs. initiating new comparative
research Funding
Commitment to conduct adequately powered studies Distance from payment authorities
Stakeholders Genuine involvement with priority setting, methods review and
communication approaches
A Few Suggestions