Economic and Quality of Life Outcomes in Oncology: The Regulatory Perspective

Oncology, ONCOLOGY Vol 9 No 11, Volume 9, Issue 11

The federal government's involvement in cost-effectiveness studies, outcomes measures, and practice guideline development is haphazard, with a number of agencies taking part in the process. The Health Care Financing

The federal government's involvement in cost-effectiveness studies, outcomes measures, and practice guideline development is haphazard, with a number of agencies taking part in the process. The Health Care Financing Administration (responsible for Medicare and Medicaid) and other third-party government payers informally and unscientifically judge the cost-effectiveness of treatments, particularly new technologies, when making coverage decisions. FDA policy restricts pharmaceutical companies from disseminating information on cost-effectiveness by requiring that such data be part of the product labeling. The Agency for Health Care Policy and Research has produced only a small number of practice guidelines and at a much higher cost than the private sector. Medical societies and other private organizations will ultimately find it in their best interest to include cost-effectiveness and outcomes measures in study protocols and to develop treatment guidelines related to their specialties.


Sensitivity to health care costs in general and the advent of managed care in particular have greatly enhanced the perceived value of outcomes measures of both cost-effectiveness and quality of life. Since the late 1980s, the federal government has consciously sought to exert a major influence on such activity, but, even before that, federal agencies used these criteria to make treatment and payment decisions. The medical profession is now seeking to assume a leading role in defining practice parameters, but in doing so it must be mindful of the regulatory environment in which these decisions are made.

There are four US regulatory agencies with potential jurisdiction over oncology outcomes measures: the Agency for Health Care Policy and Research (AHCPR), Food and Drug Administration (FDA), Health Care Financing Administration (HCFA), and Federal Trade Commission (FTC). This article will explore the involvement of each of these agencies in cost-effectiveness and quality of life outcomes and how their policies affect the practice of oncology.

Agency for Health Care Policy and Research

In an effort to provide increased funding for and emphasis on outcomes measures, Congress replaced the National Center for Health Services Research with AHCPR in 1989. The agency's general purpose is to conduct research to improve the quality, appropriateness, and effectiveness of health care services. Congress hoped that AHCPR's outcomes research would lead to the elimination of unnecessary procedures and thus save a sizable amount of money.

The agency evaluates and disseminates information regarding the cost-effectiveness and outcomes of health care services and procedures, which may in some instances form the basis for practice guidelines. In addition, AHCPR is specifically responsible for:

1. Funding Patient Outcomes Research Team (PORT) projects, 5-year studies of the prevention and management of conditions such as prostate disorders and diabetes.

2. Preparing the National Medical Expenditures Survey, which examines national health spending every 10 years.

3. Evaluating the safety and effectiveness of specific medical technologies at the request of the Medicare and CHAMPUS (Civilian Health and Medical Program of the Uniformed Services) programs, and recommending whether the federal government should pay for them. [The Office of Health Technology Assessment (OHTA), a component of AHCPR, performs these assessments.]

Track Record-Although its overall success may be open to question, the AHCPR's achievements include the funding of a number of PORTs and completion of 13 practice guidelines. A recent report published by the Office of Technology Assessment (OTA) commended the agency's PORTs-interdisciplinary research teams that study medical conditions and the effectiveness of medical practices to diagnose, treat, and manage them. According to OTA, the PORTs have been particularly successful in developing outcomes measures using patient assessments and in identifying the use and effectiveness of medical practices in particular patient populations. Examples of PORT projects include the Back Pain Outcome Assessment Team; Assessing Therapies for Benign Prostatic Hypertrophy and Localized Prostate Cancer; and Cure, Costs and Outcomes of Local Breast Cancer.

The agency has also been praised for certain of its efforts in guideline development, including the Cancer Pain Management Guidelines released last year. Other practice guidelines produced or under development include those relating to lower back problems, benign prostatic hyperplasia, and colorectal cancer screening (this guideline is being produced by the American Gastroenterological Association under a contract with AHCPR).

Since its inception, AHCPR has produced only 13 guidelines. The agency is currently writing nine additional guidelines and plans to announce new guideline topics this spring. The 13 guidelines written by AHCPR represent a very small portion of the total of approximately 1,500 practice guidelines produced to date. The vast majority of practice guidelines are produced by more than 45 private organizations, including many medical specialty societies. The cost to the agency of approximately $1 million per guideline is dramatically more than the amount medical societies pay, which in most cases is $100,000 or less.

Shortcomings-While OTA's recent report acknowledged AHCPR's contributions, it did note certain weaknesses as well. Because AHCPR is not the only federal agency responsible for drafting practice guidelines, the government lacks a coordinated approach to evaluating outcomes measures and producing practice guidelines. Other agencies responsible for writing guidelines include the Centers for Disease Control and Prevention (CDC), and the National Institutes of Health (NIH).

In response to this problem, OTA recommended that Congress designate a single lead agency to coordinate guideline activities. The OTA report sets out a number of options for creating this centralized system: (1) Fold AHCPR into a "new, larger agency with a broader mandate and more resources," (2) designate AHCPR the lead agency for coordinating guideline efforts, or (3) encourage or require the various existing agencies to act collaboratively through "administrative mechanisms."

According to OTA, a central failure of AHCPR and the entire federal effectiveness effort has been the inadequate use of prospective comparative studies, particularly randomized clinical trials, to evaluate the comparative effectiveness of alternative treatments.

The OTA also reported that while AHCPR's efforts in effectiveness research will probably improve the quality of health care, they "will not necessarily reduce health care costs significantly." This finding countered Congress' intent that AHCPR's activities would lead to health care savings. The report stated that effectiveness research should be considered a good "buy" if it improves health care and pays for its own research-related costs.

The AHCPR's "passive dissemination of guidelines" contributes to the failure to sufficiently transfer the guideline findings into clinical practice, the OTA report said. Providers also often do not readily adopt the recommendations in guidelines.

Future-Last year, during the health care reform debate, many of the Democratic bills included provisions that would have increased the role of AHCPR. Sponsors of such provisions believed that outcomes measures conducted by AHCPR and others were necessary to combat rising health care costs and help ensure the affordability of the expansive health care system they envisioned.

Now, with Congress controlled by the Republicans, AHCPR may become a prime target for budget cutting. While in the past the agency has had bipartisan support in Congress, this year it may have to ward off efforts to trim its activities, if not eliminate it completely. Given the high cost of producing practice guidelines and the expanding, more cost-effective private sector efforts in this field, Congress may choose to limit the federal role in guideline development.

Food and Drug Administration

Through its regulation of information concerning products under its jurisdiction, FDA exerts a significant impact on dissemination of cost-effectiveness and outcomes data. The agency approves not only drugs, devices, and biologicals, but also the labeling that accompanies them. Moreover, it takes a very expansive view of what constitutes "labeling," with the result that pharmaceutical companies and other product sponsors are barred from disseminating any information not completely consistent with the product's approved labeling.

In addition, FDA policy seeks to regulate presentations by physicians or others when the program is funded by pharmaceutical money. In the past, FDA has denounced physicians presenting on off-label uses at pharmaceutical-sponsored seminars as the "paid agents" of the sponsor and included them in enforcement actions. Consequently, FDA often finds itself in the ironic position of asserting that products are "misbranded" and therefore subject to enforcement action because the sponsor has been found to be involved in dissemination of entirely truthful and accurate information about product uses beyond those on the approved label.

Off-Label Uses in Oncology-Many, if not most, anticancer drugs are broadly accepted in the medical community for additional "off-label" uses. Cancer patients rely heavily on off-label uses, since most chemotherapy regimens involve one or more such use. Furthermore, the pace of change in oncology therapy is rapid. Results from the many ongoing clinical trials are quickly incorporated into practice, and oncology drug labels are quickly superseded by new information. FDA has no efficient mechanism for updating drug labeling, thus making labels meaningful for the practitioner.

Variations in use of anticancer chemotherapy drugs can have significant impact on both therapeutic outcome and treatment toxicity. Patients and their physicians need ready access to reliable information about these products. FDA has been urged to use previously published peer-reviewed clinical research data as the basis for approving supplemental new drug applications (SNDAs) for new uses of an already approved product. While FDA accepts this approach in theory, its practice has been not to approve SNDAs for new indications without full-blown clinical trials with all the supporting background data.

Quality of Life and Cost-effectiveness Claims-In addition to restricting information about new off-label uses of approved products, FDA increasingly is paying attention to and regulating claims made by pharmaceutical companies regarding their products' cost-effectiveness or quality of life benefits. The agency is in the process of formulating its policies concerning this subject, and guidance in this area often is not clear.

Underlying this issue is a debate regarding the type of data necessary to make quality of life and cost-effectiveness claims. FDA representatives have suggested that data should come from controlled clinical studies. The agency is recommending that pharmaceutical companies design protocols to show cost-effectiveness and quality of life advantages over competing products. Companies would have to show that their products have fewer side effects, work faster, and require less follow-up care than competing drugs. The pharmaceutical industry, on the other hand, contends that valuable cost data can emerge from after-the-fact analysis of patient records.

Legal Challenge to FDA-While FDA must prevent manufacturers from making false claims regarding the cost-effectiveness of their products, the agency now finds itself in the position of restricting the free flow of truthful information. A conservative think tank, the Washington Legal Foundation, has submitted a Citizen's Petition and filed a lawsuit challenging FDA's policy on promotion of off-label uses on the grounds that it exceeds the agency's statutory authority and violates the First Amendment.

The Foundation argues that FDA should not seek to restrict the dissemination of truthful information about products, even if such dissemination is facilitated by the sponsoring company. FDA sought public comments regarding the Foundation's challenge in a Federal Register notice of November 18, 1994 (59 Fed Reg 59820).

Proposed Legislation-During the last Congress, Rep. Ron Wyden (D-OR) proposed legislation that would have encouraged pharmaceutical companies to conduct trials to demonstrate cost-effectiveness in comparison to other therapies. Such legislation would address one of the weaknesses identified in OTA's report on AHCPR-the inadequate number of trials comparing the effectiveness of alternative treatments.

Under various versions of this bill, which was never introduced, companies that conducted cost-effectiveness trials would have received certain incentives, including additional limited periods of exclusivity, expedited approval of supplemental new drug applications, the ability to charge for products involved in such studies, a requirement that the Secretary of Health and Human Services review Medicare and Medicaid reimbursement and coverage barriers that limit access to products deemed superior under an approved study and remove any such barriers, and a provision that FDA's ability to regulate marketing cost-effectiveness claims be limited to requiring disclosure of the assumptions underlying such cost claims.

This proposed legislation went nowhere, in great part because the exclusivity provisions were deleted. Industry maintains that additional exclusivity is necessary to provide companies with the resources needed to conduct research on cost-effectiveness. Similar legislation including the exclusivity incentive could receive a better reception in the new Republican majority Congress.

Legislation like that initially proposed by Rep. Wyden, including the exclusivity incentive, would encourage pharmaceutical companies to continue and augment their trend toward incorporating cost-effectiveness claims into clinical trials. While companies have been slower to include quality of life in their trials, there is a clear and growing trend to conduct cost-effectiveness analysis in clinical trials of new treatments. In today's marketplace, companies recognize that both cost-effectiveness and quality of life claims can provide them with a competitive advantage. Managed care plans often require such analyses.

Health Care Financing Administration

The Health Care Financing Administration (HCFA), as the federal agency responsible for the Medicare program, makes important coverage decisions about new technologies, sometimes based on rough assessment of their cost-effectiveness. State Medicaid agencies, through formularies, deny coverage of some products on grounds of cost-effectiveness.

Coverage Rules-In determining whether a particular health care product or service is covered by Medicare, HCFA generally considers only safety, effectiveness, medical appropriateness, and whether the product or service is experimental. In January, 1989, HCFA published a proposed rule that would have added cost-effectiveness as a new criterion for Medicare reimbursement decisions. HCFA based its decision to consider cost-effectiveness on the escalating costs of health care and its belief that statutory language requiring Medicare covered services to be "reasonable" permit the agency to consider cost in making coverage decisions.

By HCFA's definition, cost-effective products are those that result in "improved health outcomes for Medicare patients that justify additional expenditures." A technology would be cost effective if it met any of the following criteria:

1. Less costly and at least as effective as alternative covered technology

2. More effective and more costly than covered alternative, but improved health outcomes justify additional expenditures

3. Less effective and less costly but a viable alternative for some patients.

To determine whether a service is cost effective, HCFA proposed the following analysis: Identify the relevant alternative technologies; identify all relevant outcomes-including reduced morbidity and mortality, reduced pain, enhanced personal well being, vigor, and so forth-from the alternative technologies and quantify them, when possible; identify all relevant costs expected, including direct medical and indirect costs; consider and, if necessary, modify analysis to take account of nonquantifiable factors-for example, ease of use and access to ambulatory setting.

Even though HCFA proposed this rule more than 6 years ago, it has never been adopted or otherwise acted on. Medicare does not admit that it currently considers cost-effectiveness in making reimbursement decisions. However, Medicare is less likely to act quickly on decisions regarding expensive products. This rough cost-effectiveness analysis is most obvious in connection with new devices or procedures rather than new drugs. With new drugs, coverage is automatic, at least for the approved indication. Medicare reimbursement is particularly important for cancer patients, more than 50% of whom are 65 or older.

HCFA traditionally permitted Medicare carriers to make coverage decisions regarding off-label drug usage. As a result, there was great regional variation in such coverage. In the Omnibus Budget Reconciliation Act of 1993, Congress stepped in to make Medicare coverage of anticancer chemotherapy drug usage uniform, based on standard medical compendia recognition of medically appropriate off-label uses. The legislation, sponsored by Senator Rockefeller (D-WV) and Congressman Levin (D-MI), was opposed by both HCFA and FDA.

Drug Formularies-More and more, both cost-effectiveness and, to a lesser degree, quality of life claims are considered a factor in including drugs on formularies, and therefore play a role in both public and private coverage decisions. Restrictive drug formularies hinder the ability of patients to receive appropriate anticancer drugs. In developing and operating drug formularies, states have traditionally emphasized cost over quality of care. The reluctance of states to update their formularies to include new drugs is particularly disturbing to cancer patients, who depend on breakthrough therapies.

In 1993, Congress enacted legislation allowing states to establish restrictive Medicaid drug formularies and require prior authorization of newly approved therapies. This legislation in essence created a second-class system of medical care for Medicaid cancer patients.

Historically, physicians have been dissatisfied with formularies, which they often view as incomplete and out-of-date listings of which therapies should be available for their patients. Last year, a study of Tennessee physicians found that 93% of those polled were not satisfied with the formulary imposed by Tenncare (Tennessee's alternative Medicaid program pursuant to waiver of usual statutory requirements).

Private Guideline Development

Thus far the private sector has produced the overwhelming majority of practice guidelines. Examples include the following:

ASCO's Guidelines on Use of Hematopoietic Growth Factors-In November, 1994, the American Society of Clinical Oncology (ASCO) produced its first evidence-based clinical practice guidelines, making recommendations for the use of hematopoietic colony-stimulating factors (CSFs) in connection with chemotherapy administration. While CSFs had shown clinical benefit, their high cost led to concerns about their appropriate use. ASCO received a considerable number of requests for such guidance and convened an expert panel to develop the recommendations.

ASCO's practice guidelines recommend that CSFs be used in some situations, including to reduce the likelihood of febrile neutropenia when the expected incidence is 40% or higher; after documented febrile neutropenia in a prior chemotherapy cycle when chemotherapy dose-reduction is not appropriate; and after high-dose chemotherapy with autologous progenitor-cell transplantation.

Intermediate end points, as indirect indicators of patient quality of life, were the primary outcome measures the panel considered in assessing trial results. The panel responsible for these guidelines recognized that collection of data on the impact of CSF use on survival, quality of life, and costs should be a priority in future clinical trials of CSFs. The panel also acknowledged the fact that guidelines cannot always account for variation among patients and are not intended to supplant physician judgment.

ACP Guidelines-Practice guidelines produced by the American College of Physicians (ACP) have traditionally been well received. Their guidelines, like ASCO's growth factor guidelines, are evidence-based, as opposed to consensus-based. Examples of guidelines produced by ACP include those relating to medical treatment for stroke prevention and screening for ovarian cancer.

Blue Cross/Blue Shield Association Guidelines-The Blue Cross and Blue Shield Association has recently added assessment of cost-effectiveness to its Technology Assessment Center (TEC) program. Assessments now underway include positron emission tomography (PET) for oncology indications, high-dose chemotherapy with stem cell support for treatment of multiple myeloma and low-grade lymphoma, and management of nonpalpable breast lesions. The TEC program conducts 35 to 40 assessments each year.

Antitrust Implications-Development of practice guidelines by a medical society involves concerted action among competitors, ie, physicians. If such action were found to constitute an unreasonable restraint of trade, the antitrust laws, notably the Sherman Act, could impose substantial civil or criminal liability.

In the leading case on guidelines sponsored by medical societies, eight ophthalmologists alleged that the American Academy of Ophthalmology violated the antitrust laws by labeling radial keratotomy, a surgical procedure for correcting nearsightedness, as "experimental." The court of appeals rejected the suit for its failure to assert an antitrust claim. As the court said, "there can be no restraint of trade without a restraint." Because the Academy did no more than state its opinion as to the experimental status of the procedure and did nothing to coerce hospitals, insurers, or others to act consistently with its opinion, the Academy's statement was not covered by the antitrust laws [Schachar v American Academy of Ophthalmology Inc, 870 F. 2d 397 (7th Cir 1989)].

In contrast, the courts imposed liability on the American Medical Association (AMA) for its various efforts to boycott chiropractors and exclude them from medical practice [Wilk v American Medical Association 895 F. 2d 352 (7th Cir 1990)]. Most significantly, the AMA had pronounced it unethical for its members to associate professionally with chiropractors. The critical difference in these two cases lies in the degree to which collective coercion or pressure was employed to enforce medical judgments.

The FTC and the Department of Justice, which share jurisdiction over antitrust regulatory enforcement, recently issued guidelines creating a safe harbor, or "antitrust safety zone," for practice guidelines (Statements of Enforcement Policy and Analytic Principles Relating to Health Care and Antitrust, September 27, 1994).

Absent extraordinary circumstances, the FTC and Justice will not challenge "a medical society's collection of outcome data from its members about a particular procedure that they believe should be covered by a purchaser and the provision of such information to the purchaser" or "providers' development of suggested practice parameters-standards for patient management developed to assist providers in clinical decision making-that also may provide useful information to patients, providers, and purchasers."

The AMA advises medical societies to do the following when developing guidelines:

  • Base practice guidelines on scientific and medical, not political or economic, considerations.
  • Recommend what should be done, not who should do it.
  • Establish and follow fair and open procedures that allow input from all affected professional groups and require explanation of reasons for particular recommendations.
  • Avoid conflicts of interest.
  • Make guidelines voluntary; do not attempt to enforce them through pressure or coercion.

The law is fairly clear in its protection of practice guidelines from antitrust liability, but individuals may file their own lawsuits for private enforcement. Despite the low risk of loss, the consequences of an adverse judgment could be catastrophic: Losing defendants can be forced to pay three times the amount of actual damages plus attorneys fees for both sides. Even a successful defendant must pay its own legal fees, which could exceed $1 million in a significant antitrust case. Accordingly, despite the general protection from antitrust liability for practice guidelines development, some degree of caution is in order when medical societies are involved in such activities.


The federal government is involved in cost-effectiveness studies, outcomes measures, and practice guideline development in a haphazard fashion: HCFA and other third-party government payers engage in an informal and unscientific version of such exercises in making coverage decisions, particularly for new technologies. FDA policy inhibits the free flow of information relating to these activities by its unnecessarily restrictive approach to dissemination of information by pharmaceutical companies. AHCPR has not found a way to deal efficiently with the substantial and constantly increasing demand for quality work in this field.

The best hope for progress lies with medical societies and other private entities who will find it in their eventual interest to undertake the responsibility for gathering data on cost-effectiveness and outcomes measures and developing guidelines related to their specialties. Medical groups should be aggressive in a field dominated by private insurers whose decisions may not be in the best interest of either physicians or patients.