Details

  • Type: Business and industry issue
  • Date: 4/1/2011

Issues for pharmaceutical companies 

Issues for pharmaceutical companies
CER is still a work-in-progress for the US healthcare industry, but several issues can be noted that may have a significant impact on pharmaceutical companies.

Limitations on innovation:

CER might limit innovation and discourage the development of new, potentially effective therapies by creating additional hurdles for innovators.11 According to a recent report, two-thirds of commercially funded drug studies now use a placebo comparator.12 A change from placebo to one-to-one drug comparisons might make drug research too costly for some pharmaceutical companies.


Disruption of existing product development pipeline:

If CER programs in both the private and public sectors are not well co-ordinated, a pharmaceutical company might have to eliminate a product after considerable investments if it is judged less effective. CER might also result in less investment in drug classes where multiple options or generics already exist.


Erosion of markets for existing brands:

If a current brand is found less effective through CER, its maker could see their return on investment for even ‘blockbuster’ drugs steadily decline.


Increased costs:

Companies may underwrite more CER studies to meet regulatory and reimbursement requirements or to advance a particular product against competing therapies. In that case, the company will probably face costly logistical and quality issues when obtaining appropriate comparative products for their CER studies. For global, multisided studies from different sources, difficulties might include product availabilities, expiration dates, storage requirements, and transportation costs.


Greater involvement by payers:

Many payers have received CER funding through the ARRA to design and conduct their own studies. CER programs funded by payers will have a significant effect on how drug costs are reimbursed and, in turn, which drugs are developed and marketed by pharmaceutical companies.


To give just one example, WellPoint recently lifted prior authorization requirements on oral asthma medications after the results of a CER analysis of claims data by its subsidiary HealthCore. The study found that while inhaled asthma medications offered the best clinical outcomes for many patients, among one sub group, patients taking oral asthma controllers, had better clinical outcomes than the group taking inhaled corticosteroids.

 

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