As policymakers grapple with prescription drug access and affordability, some state agencies are using research gained through comparative effectiveness (CE) initiatives to make more informed, evidence-based decisions. CE—which evaluates and compares the effectiveness and cost-efficiency of prescription drug treatments—may help lawmakers and state agencies translate research into policy.
Comparative Effectiveness (CE)
Comparative effectiveness (CE) reviews take a systematic look at existing research on the efficacy and outcomes of certain medicines compared to other similar treatments or the standard of care. Experts say CE research is widely used internationally and identifies what clinical and public health interventions work best for improving health. Patients, providers and policymakers can use this information to make health care decisions and policies.
Comparative effectiveness (CE) initiatives generally:
- Are structured as non-profit entities; some are partially funded through states.
- Seek to obtain and provide objective and balanced facts on both brand and generic drug products.
- Publish medical-oriented research reports.
- Do not make final decisions on drug utilization or price.
- Are not involved in any prescription drug purchases.
This webpage provides more information on various CE initiatives.
The Oregon Evidence-Based Practice Center Project: DERP and SMART-D
The Drug Effectiveness Review Project
The Drug Effectiveness Review Project is a collaborative of more than a dozen state Medicaid and public pharmacy programs. Together, these programs produce concise, comparative, evidence-based research products to assist policymakers with prescription drug coverage decisions. Project research focuses on certain specialty and high-cost drugs.
To help state policymakers make more informed policy decisions, academic researchers involved in the Drug Effectiveness Review Project examine multiple drug studies, appraise the quality of those studies, then report on the evidence-based information found. Reports—which are only available to the project members—are used to develop prior authorization and drug utilization management policies.
State Medicaid Alternative Reimbursement and Purchasing Test for High-Cost Drugs (SMART-D)
The State Medicaid Alternative Reimbursement and Purchasing Test for High-Cost Drugs project, also known as SMART-D, was launched in February 2016 to help states develop alternative payment models for managing Medicaid prescription drug costs.
SMART-D efforts expanded over time provide states additional capacity and subject matter expertise to develop and implement complex pharmacy policy interventions within the confines of current law. This includes multi-payer purchaser partnerships, including Medicaid and other public purchasers, exploring preferred drug lists for Medicaid managed care contracts and pharmacy benefit management oversight and reform.
The Institute for Clinical and Economic Review (ICER)
The Institute for Clinical and Economic Review (ICER) is another major player in value-based pharmaceutical purchasing. ICER is a research organization that evaluates the clinical and economic value of prescription drugs, medical tests, and other health care products and services. One of ICER’s main research goals is to use clinical data to evaluate the effectiveness of drugs to inform prescription drug policy.
ICER evaluates medicines by comparing the price of a treatment to certain health outcomes such as patient populations, evidence synthesis, equal value of life years gained (evLYG) and quality of life metrics (QALYs). Moreover, ICER assesses the budget impacts of new drugs and makes price recommendations.
Value-Based Insurance Design: The V-BID Project
The Center for Value-Based Insurance Design (V-BID), housed in the University of Michigan, focuses on designing insurance plans that lower or remove financial barriers to essential, high-value clinical services, including pharmaceuticals. V-BID plans intend to align patients’ out-of-pocket costs, such as copayments, with the value of services.
For over a decade, researchers at V-BID have worked across payers, consumers and providers to implement and evaluate innovative health benefit designs that balance cost and quality. The goal is to encourage the use of high-value services and discourage the use of low-value services that do not significantly improve health in relation to costs.
Several state and local governments have introduced V-BID into their public employee benefit packages to promote high-value care and encourage employees to take an active role in their own health care decisions. Additionally, Medicaid programs can use V-BID principles to set enrollee cost-sharing levels, remove wasteful spending, and improve quality of care.
Relatedly, research found savings might be achieved by replacing higher cost drugs with less costly and equally effective drugs using a “waste-free” formulary. Tennessee implemented this type of formulary in their state employee health plan and saw an annual savings over $60 million.
The Patient-Centered Outcomes Research Institute (PCORI)
The Patient-Centered Outcomes Research Institute (PCORI) funds CE research to help patients and other stakeholders make better informed health care decisions, including projects related to prescription drugs. Lawmakers may review patient-centered outcomes research to aid in evidence-based decision making for state agencies.
Academic detailing provides unbiased information on safety, efficacy, and cost-effectiveness of medications to physicians. As opposed to pharmaceutical detailing— marketing of pharmaceuticals by industry sales representatives—academic detailing is conducted by health care professionals, typically pharmacists.
According to the National Resource Center for Academic Detailing (NaRCAD), the organization that underpins academic detailing programs, the core focus of academic detailing is to provide physicians an accurate synthesis of the latest clinical data to improve patterns of prescribing, as well as enhance patient screening for certain treatments. Some research shows that academic detailing may improve patient health outcomes while helping to control costs.