Policymakers out of sync with cost-effectiveness data

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 - Business Money

Policymakers can be slow to respond to the latest cost-effectiveness data, with the reimbursement of low-osmolar contrast agents (LOCAs) providing an excellent example of this lag, according to an article published in the November issue of the American Journal of Roentgenology.

Saurabh Jha, MBBS, of the University of Pennsylvania, and colleagues explained that while early economic analyses regarding LOCAs concluded that universal adoption was not cost-effective, as the price of these agents dropped, reimbursement patterns were slow to take the new costs into account.

“The clash between policy recommendations and clinical practice, as highlighted by this case, represents a teachable moment,” wrote the authors. “Greater plasticity of economic analyses to future (usually declining) prices and attention of policymakers to the original sensitivity analysis are advocated.”

When LOCAs were first approved by the FDA as an alternative to high-osmolar contrast agents (HOCAs), the cost of LOCAs was 13 to 24 times that of HOCAs, largely due to royalty payments owed to companies holding the patents on the new contrast media, according to Jha and colleagues. As a result of the cost discrepancy, only 15-20 percent of contrast injections in 1988 involved LOCAs.

As patents expired and technology for producing LOCAs advanced, the price dropped considerably, and by 1996, the price of LOCAs was 70 percent below its peak. Jha and colleagues wrote that by 1994, 60 percent of radiologists had adopted a universal-use policy for LOCAs, since they had an improved safety profile with fewer adverse effects.

This did not change reimbursement rates, however, as Medicare and third-party payers were slow to amend their policies, according to the authors. “Payers continued to cite early [cost-effectiveness analysis] research related to LOCAs when restricting reimbursement to high-risk patients, even after the data became outdated.”

In 2004, the American College of Radiology (ACR) sent a letter to Medicare policymakers arguing in favor of reimbursement for universal-use of LOCAs. Medicare revised its policy and instituted universal reimbursement beginning in January 2005.

“The ideal solution to this lag effect would be for payers and other decision makers to regularly update their policies on the basis of emergence of new information. However, there is no way to guarantee that decision makers will reassess policies with such vigilance,” wrote Jha and colleagues, adding, “The role of advocacy groups and stakeholders, such as the ACR, becomes crucial in the education of policymakers.”