Boston Business Journal
April 29, 2011
The drug evaluators
By Julie M. Donnelly
As health care costs skyrocket and the federal health overhaul expands the number of patients newly covered by insurance, the federal government and private insurers are increasingly demanding to know which drugs and medical devices work best. Massachusetts is shaping up to be a hotbed of so-called comparative effectiveness research, which seeks to answer those questions.
It’s big business.
President Barack Obama allocated $1.1 billion in funding for comparative effectiveness research in the American Recovery and Reinvestment Act; $473 million of that was awarded in grants by the Agency for Healthcare Research and Quality in September 2010. In addition, the pharmaceutical industry spent at least $5.3 billion on post-marketing studies in 2009, according to industry organization PHRMA.
“The pharmaceutical industry is under siege,” Decision Resources, Inc. CEO Peter Hoenigsberg said. “With the move to health reform, regulatory agencies are demanding an increasing amount of analytics to drive decision-making on costs and ROI.”
Hoenigsberg says his Burlington firm is “very much a Switzerland in this field.” The company does independent forecasts on different therapeutic areas that are then sold to companies, and less frequently, insurers and government agencies. The reports cost between $25,000 and $40,000. Hoenigsberg says revenue last year was well above $100 million, and the company has had a compound annual growth rate of 22 percent since 2004. The company was founded in 1991 and has 450 workers worldwide, with 150 in Massachusetts.
But despite Hoenigsberg’s characterization of the firm as Switzerland, Decision Resources’ work does choose winners and losers. Its recent study on the Multiple Sclerosis market found that a majority of U.S. neurologists surveyed chose Weston-based Biogen Idec’s (Nasdaq: BIIB) Tysabri as the most effective therapy on the market for relapsing remitting MS. It’s a welcome boost for the drug, which remains under some scrutiny due to the risk of a rare brain infection known as PML. The U.S. Food and Drug Administration has maintained that the benefits outweigh the risks. The Decision Resources study could serve to reinforce continued regulatory and insurer support for the drug.
“Certainly when looking at pricing and reimbursement, insurers would use us,” Hoenigsberg said.
Another major local player in the field of comparative effectiveness is the Harvard Clinical Research Institute, an independent nonprofit that is affiliated with Harvard Medical School. The institute and its partners received a $10 million federal grant to study whether African-American asthma patients are more likely to experience adverse events from use of long-acting beta-agonist therapy. The federal government is targeting asthma because it accounts for one-fourth of all ER visits in the U.S., according to HCRI. If the drugs are found to be less effective in the African-American population, the study could potentially shrink the market for drugs like U.K.-based GlaxoSmithKline’s (NYSE: GSK) Avdair, which brought in $7.9 billion in revenue in 2010, and U.K.-based AstraZeneca plc’s (NYSE: AZN) Symbicort, which booked $2.7 billion in 2010 revenues.
“Increasingly, doctors and insurers are going to say, ‘we won’t prescribe to 90 percent of the population when a drug only works in 20 percent of the population’,” HCRI President Spencer Goldsmith said.
One important question in the emerging field of comparative effectiveness is: What are the standards that make a post-approval study rigorous enough to guide drug reimbursement and labeling decisions? Full clinical trials are incredibly expensive, and may not provide the right information about how the drugs work in the real world.
“Clinical trials prove only that a drug works better than… nothing,” Nancy Dreyer, Outcome Sciences Chief of Scientific Affairs, said. “But what about Grandma, who might be taking several other drugs at the same time? Clinical trials never study these people.” Cambridge-based Outcome Sciences, with 250 workers worldwide, conducts post-approval studies and is also deeply involved in developing standards for such studies that will be acceptable to the FDA and insurers. Dreyer said Outcome is in the midst of working on a five-year study of the weight loss lap band, which is marketed by Irvine, Calif.-based Allergan Inc. (NYSE: AGN).
Real-world health outcomes may effectively be measured through the help of social networks, PatientsLikeMe co-founder Jamie Heywood says. The privately-held Cambridge-based company operates an online patient community with more than 10,000 members representing more than 500 conditions.
This week, the company announced it has publishes a study in the journal Nature Biotechnology arguing that lithium carbonate does not slow the progression of ALS, also known as Lou Gehrig’s disease. The 45-person firm said that contrary to a 2008 study, which was published by the National Academy of Sciences, its review of self-reported data from 348 ALS patients found they did not experience an observable effect on disease progression. Heywood said it’s important to note that this is not replacement for an actual clinical trial. But he said this kind of research may prove disruptive to the comparative effectiveness marketplace, by providing valuable data at a small fraction of the cost of a traditional post-marketing study.
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