# Presentation: 737375

## Comparative Effectiveness:             	A Manufacturer’s Perspective

- AHRQ 2007 Annual Conference
- September 27, 2007

- Peter Juhn, MD, MPH
- Vice President
- Evidence and Regulatory Policy
- Johnson & Johnson Corporate Office
- New Brunswick, NJ
- 732-524-6484

## Evolving Environment 

**Cost**

**Quality/Safety**

**Value**

**Drivers**

**Challenges**

**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 Development**

**Access to and Payment for**
- Innovative and effective products

**Policies**

**Practice Variation**

**Aging Population**

**Rising Demand**

**Cost of Technology**

**Budget Pressures**

## Healthcare Stakeholders

***Patients***

***Providers***

**Employer**** **

**Payer**** **

**Pharmaceutical **

***Manufacturers***

**Medical Devices**

**Integrated****Networks **

**Hospitals**

**LTC****Facilities**

**Outpatient**

**Other**

**Biotech**

**Distributor/****Wholesaler**

**Regulatory****Agency**

**Physicians **

***Payers/ ******Regulators***

## Healthcare Stakeholders

***Patients***

***Providers***

**Employer**** **

**Payer**** **

**Pharmaceutical **

***Manufacturers***

**Medical Devices**

**Integrated****Networks **

**Hospitals**

**LTC****Facilities**

**Outpatient**

**Other**

**Biotech**

**Distributor/****Wholesaler**

**Regulatory****Agency**

**Physicians **

***Payers/ ******Regulators***

**Patient** – *“am I getting the best care?”*
- Convenient
- Respectful/compassionate
- Trusted information about choices
- Lower out-of-pocket cost

## Healthcare Stakeholders

***Patients***

***Providers***

**Employer**** **

**Payer**** **

**Pharmaceutical **

***Manufacturers***

**Medical Devices**

**Integrated****Networks **

**Hospitals**

**LTC****Facilities**

**Outpatient**

**Other**

**Biotech**

**Distributor/****Wholesaler**

**Regulatory****Agency**

**Physicians **

***Payers/ ******Regulators***

**Provider** – *“am I being rewarded for good work?”*
- Better outcomes
- Higher reimbursement
- Increased volume
- More efficiency
- Chance to innovate
- Enhanced reputation

## Healthcare Stakeholders

***Patients***

***Providers***

**Employer**** **

**Payer**** **

**Pharmaceutical **

***Manufacturers***

**Medical Devices**

**Integrated****Networks **

**Hospitals**

**LTC****Facilities**

**Outpatient**

**Other**

**Biotech**

**Distributor/****Wholesaler**

**Regulatory****Agency**

**Physicians **

***Payers/ ******Regulators***

**Employer*** – “am I getting value for money?”*
- Lower cost
- “Best care”
- Not unhappy beneficiaries/workforce
- Healthy productive employees

## Healthcare Stakeholders

***Patients***

***Providers***

**Employer**** **

**Payer**** **

**Pharmaceutical **

***Manufacturers***

**Medical Devices**

**Integrated****Networks **

**Hospitals**

**LTC****Facilities**

**Outpatient**

**Other**

**Biotech**

**Distributor/****Wholesaler**

**Regulatory****Agency**

**Physicians **

***Payers/ ******Regulators***

**Payer*** – “am I only paying for effective care?”*
- Lower cost
- Predictability
- Better outcomes (influence on later costs)

## Healthcare Stakeholders

***Patients***

***Providers***

**Employer**** **

**Payer**** **

**Pharmaceutical **

***Manufacturers***

**Medical Devices**

**Integrated****Networks **

**Hospitals**

**LTC****Facilities**

**Outpatient**

**Other**

**Biotech**

**Distributor/****Wholesaler**

**Regulatory****Agency**

**Physicians **

***Payers/ ******Regulators***

**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

## Healthcare Stakeholders

***Patients***

***Providers***

**Employer**** **

**Payer**** **

**Pharmaceutical **

***Manufacturers***

**Medical Devices**

**Integrated****Networks **

**Hospitals**

**LTC****Facilities**

**Outpatient**

**Other**

**Biotech**

**Distributor/****Wholesaler**

**Regulatory****Agency**

**Physicians **

***Payers/ ******Regulators***

**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

## Does it work?  Is it safe?
Regulatory Approval
Relevant for covered population (i.e. Medicare over 65y)

- 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?

## 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

## 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

## 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

## 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

## 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

- 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

## 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

- 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