Individuals and companies tend to have one arch-villain, one adversary that looms larger than all others. In the pharmaceutical industry, at any given moment, industry veterans might identify the main villain as the generic drug makers, the news media, regulatory officials or even academic physicians.

Now, however, your correspondent is pleased to report a new demon: comparative effectiveness. This trumps everything. Comparative effectiveness is a knowledge domain built on a central critique of the drug industry, namely that industry-sponsored clinical trials seldom compare life-saving medicines as carefully as car makers line up their products for side by side comparisons.

And while it may seem like comparative effectiveness has been around forever, it sprang up (as a term on the internet, at least) just three years ago. True, the British have been doing it for years. But in the U.S., the drive to compare therapies is still gaining momentum.

The key idea is that while best practices in comparative effectiveness research (CER) are still taking shape, the cost-conscious business and governmental bodies implementing CER are as strong and sophisticated as the pharmaceutical industry itself. That could create major headaches and risks for industry that are absent in the current regulatory process.

Conference Report

Such was the gist of the 2011 Post Approval Summit, held annually at Harvard and organized by Richard Gliklich, the president of registry firm Outcome. Gliklich has a day job as a medical professor at Harvard, and consistently organizes a conference with unusual and welcome numbers of physician-speakers at the podium.

One of Gliklich's presenters, David Recker, is senior VP of clinical sciences at Takeda. He gave the audience a quick tour of two CER efforts at Takeda. Besides safety, efficacy and regulatory approval, he said, sponsors now face another gauntlet. “The fourth hurdle we now see is the need not just for approval, but for reimbursement,” said Recker.

Another speaker, Newell McElwee, is an ex-Pfizer executive who is currently executive director of outcomes research at Merck. McElwee didn’t strike us as a particularly sentimental guy. But in his remarks there was a note of wistfulness about the FDA and EMEA. Their processes, after all, are a known entity. Their regulations are published.

Wild West

With CER, McElwee noted, anything goes. Speaking to payers and others holding the CER sword over the industry, McElwee pleaded: “Tell us what you want. Tell us when we've got the drug in development, not at launch.”

For industry, he explained, it’s time to stop pretending CER is a fad, and to start more intensive discussions about what payers need to know about any new therapy in clinical development. “This is definitely going to happen,” he said. “Manufacturers will need to know what the evidence requirements are.”

One wrinkle, of course, is that the best methodology is in flux. The U.K.'s CER office does have a consulting program that helps industry plan research to generate acceptable CER data. McElwee said he expects a similar effort in the U.S. That assumes elected officials understand the concept of CER and have the ability to focus on it in the middle of what appears to be a permanent U.S. budget and political crisis.

A Small Push

The good news, if any, is that the amount of federal spending on CER research is currently dwarfed by other scientific priorities, as McElwee demonstrated by showing a chart listing some National Institutes of Health projects. “Most federal investment will not be on federal head-to-head drug studies,” McElwee said. By his tally, there were just 6 head-to-head studies out of 130 major projects.

Another speaker, Troyen Brennan, echoed that view from a different angle. He’s executive VP and chief medical officer at CVS Caremark, the pharmacy chain.

Data Trove

Brennan noted the firm has data on more than 60 million Americans, and is starting to analyze it to improve health outcomes. In looking at the 15 most important therapeutic areas, Brennan said, and the top five drugs in each one, there are only two patented products that would be obligatory components of an ideal formulary: Nexium and Crestor. Said Brennan: “It's a generic world. You could get a very reasonable formulary without either of those products.”

Using its own data, Brennan said, CVS is getting smarter about what it wants to pay for, not to mention tougher at the negotiating table. “It allows us to be much more sophisticated both about what decisions should be on formulary and negotiations with the pharmaceutical industry in terms of cost,” he said.

Keep Your Money

One note from Brennan was a bit dark. The CVS philosophy appears to be that little of what industry is doing, either in observational or interventional trials, can be trusted. Brennan didn’t say it so baldly; he was a physician speaking to fellow colleagues. But he says CVS is planning to run its own trials, its own meta-analyses, and gather its own clinical data outside the normal channels.

Does he need any help? Nope. Said Brennan: “This is all stuff we would finance ourselves. We would avoid taking any funding from pharmaceutical firms. It may only be a few studies a year. But we'll try to target it to the things that will be the most important to consumers.”

From Brennan's presentation, it was impossible to assess the scope of what CVS is doing. The 2010 financial statements of CVS list no significant R&D expenditures. But the revenue at CVS is already 50 percent larger than rival Walgreen's. To calculate it another way, CVS revenues are equivalent to those at Pfizer and Abbott combined. If CVS ever chose to dip its toe into research, it will have the means.

The Number

Any CVS research that is completed, Brennan vowed, will be published—not buried in a filing cabinet. As an example of what has been helpful, Brennan showed a granular analysis of two new anticoagulants that are aiming to take over from coumadin and warfarin: Pradaxa (from Boehringer Ingelheim) and Xarelto (Bayer).

The research calculated the prevalence of cardiac adverse events in each drug. With each safety profile in hand, CVS has estimated the likely cost of using each drug in large numbers of patients over long periods of time. It’s the sort of common-sense research that academics have long demanded. It's just not part of what most drug companies do on a routine basis.

Brennan spent a good portion of his talk reviewing the associated costs of having a variety of cardiac events occur in patients on a variety of patented and off-patent anticoagulants. With many adverse event and medication pairings, he displayed a simple, easy-to-grasp dollar figure: a quality-adjusted life year, or QALY. It's pronounced "qually."

The use of QALY remains controversial in some medical-economic and epidemiological circles. A QALY may not be the ultimate metric to assess if an innovative drug is a true medical advance. But it’s clear that CVS likes QALY as a rough and useful measuring stick with which to compare the costs of similar therapies. A QALY is to medicine what a calorie is to dieting.

Resource Issues

Brennan explained that for CVS customers, some with hundreds of thousands of insurance plan members or employees, there is relentless pressure to reduce the cost of health care. So demand for QALY data is only likely to increase. “It gives you a sense of the tough hill that new medications have to climb compared to generic medications,” Brennan said.

With little data about actual numbers of CER projects, it appears that the effort is chronically underfunded. As a result, it might take a decade for CER to analyze much more than a few drugs. The much-rumored generic versions of biotechnology products could be a parallel case. Biogenerics have largely been held off the U.S. market, despite being introduced long ago in Europe. CER may be another area in which loud European thunder never leads to rain in America.

There is a danger to prematurely dismissing CER. If one product does amass compelling CER data, establishing clinical and economic superiority, other formerly-viable competitors under development might effectively be locked out of some markets. In business terms, being defeated on the CER battlefield will be the same as having a new drug rejected in the traditional regulatory process.

The trend has potential implications for the pharmaceutical industry's productivity challenge. If Wall Street wizards decide to augment their models of the drug industry to incorporate CER-related risk, there could be opportunities for a few super-blockbusters—but even more therapies that never quite measure up. d9A2t49mkex