Premarket Policies May Generate the Best Value

Jayson Slotnik, JD, MPH

June 2010, Vol 1, No 2 - VBCC Perspectives


The Patient Protection and Affordable Care Act (PPACA), which is Congress’ latest attempt to reform our healthcare system, creates 3 new entities that will test new payment methodologies or compare current treatments in an attempt to determine better value for our healthcare dollar. In addition, Congress also enhanced the clinical trial process and created a new process to hopefully expedite new technologies to the marketplace. It is a shame that Congress did not focus more on these premarket policies, as they have the potential to bring greater value to our healthcare system.

Although the 3 newly created entities were significantly debated and somewhat controversial, many both in and outside the healthcare system do not even know about these premarket improvements. Comparative effectiveness was perhaps the most controversial because of its potential ability to be used to reduce access to the “losing” comparator. Opponents called this “government-run healthcare”; supporters claimed the intent is to inform the clinical decision-making process. We shall see. The law states that by September 23, 2010, the Patient-Centered Outcomes Research Institute (PCORI) will exist to assist patients, clinicians, purchasers, and policymakers in making informed health decisions by advancing the quality and relevance of clinical evidence through the conduct of research comparing the clinical effectiveness, risk, and benefits of 2 or more medical treatments, services, or items. Medical treatments, services, or items is defined to include healthcare interventions, protocols for treatments, care delivery, procedures, devices, diagnostics, drugs and any strategies used in the treatment, management, and diagnosis of or prevention of illness. The law also prohibits the institute from mandating coverage or reimbursement for any payer, public or private.

Second, PPACA creates a new Center for Medicare and Medicaid Innovation (CMI) within the Centers for Medicare & Medicaid Services (CMS). By January 1, 2011, the secretary shall select models to be tested where the secretary determines that there is evidence that the model addresses a defined population for which there are deficits in care leading to poor clinical outcomes or potentially avoidable expenditures. The CMI could examine alternate treatment and payment methodologies for treating cancer, such as bundled payments and/or payment for adherence to clinical guidelines.

Lastly, PPACA creates a new Independent Payment Advisory Board (IPAB) whose major purpose is to develop proposals that will reduce the per capita rate of growth in Medicare spending. The IPAB’s first annual proposal will be submitted to Congress and the president no earlier than 2014 and may cover a wide range of reforms, including changes to the payment methodology for therapies that treat cancer. The IPAB must submit a draft copy of its recommendations to the Health and Human Services (HHS) secretary for review by September 1 of each year. By March 1 of the following year, the secretary is required to submit the results of the secretary’s review to Congress. The IPAB must submit its recommendations to Congress and the president by January 15 of each year, beginning in 2014. Once receiving the recommendations, if Congress does not enact alternative measures that achieve the same level of savings or otherwise act to block the recommendations, the secretary of HHS would be required to implement the IPAB’s recommendations.

Cancer-specific Premarket Policies

Each of the initiatives just discussed will receive a great deal of attention and financial resources, and the results may be used to change current policy in the name of improving value within our healthcare system. Hopefully, 2 other policies will receive equal footing because they will certainly enhance cancer care. First, congressional changes to insurance law now require group and individual plans to cover routine patient costs of qualified individuals who participate in certain approved clinical trials. The new policy, however, excludes costs for the investigational item, device, or service itself as well as items and services that are provided solely to satisfy data collection. Despite some of the limitations, this new policy is a dramatic improvement that will hopefully provide for greater clinical trial participation, further enhancing clinical and scientific knowledge around cancer care. This is real value.

The change with perhaps the greatest potential impact is the creation of the Cures Acceleration Network (CAN) within the Office of the Director of the National Institutes of Health (NIH). The CAN is directed to engage in a number of activities, including awarding grant money to support “revolutionary advances” in translating scientific discoveries from bench to bedside and to accelerate the development of “high-need cures.” A high-need cure is defined as a drug, biological product, or device that is needed quickly to diagnose, mitigate, prevent, or treat harm from any disease or condition; and for which the incentives of the commercial market are “unlikely to result in its adequate or timely development.” PPACA also directs the CAN to coordinate with the US Food and Drug Administration (FDA) regarding review and approval of high-need cures, including by establishing regular communication with the FDA regarding CAN activities and ensuring that CAN activities are synchronized with the approval requirements of the FDA.

PPACA only authorizes $500 million for the CAN for fiscal year 2010 and such sums as necessary for subsequent fiscal years. Congress has not yet appropriated the funds for the CAN, thus the program will not be operational until the funding is received by the NIH. Hopefully, Congress will recognize the value in getting such urgently needed therapies to market, and not just focus on postmarket therapies.