How Comparative Effectiveness Research Can Increase Costs

Comparative effectiveness research is often viewed as a method to achieve cost savings, but it has the potential, perhaps even an equal potential, to increase costs.   A recent drug trial on a new anticoagulant therapy may demonstrate this potential.  The compound, marketed as Pradaxa in many countries outside the United States but not yet approved in the United States, was shown in a head-to-head comparison with warfarin to be at least as good and to potentially have fewer bleeding adverse events.  The study results are reported in the New England Journal of Medicine.  (NEJM Article)

Warfarin is generic and relatively inexpensive.  Pradaxa is a brand medication which undoubtedly will cost a great deal more in the United States.  A full understanding of the economics would require looking not just at the cost of each drug, but any associated testing and the cost of treating adverse advents caused by each as well as health care which may be avoided because of the therapeutic benefits of the drug.  But at least in regard to cost of the drug, a significant switch to Pradaxa will raise costs.

This is a classic comparative effectiveness trial–two alternative treatments for the same condition.  The results will surely be used to facilitate marketing and use of the newer, more expensive compound and very substantial switching is likely to occur.  Patient outcomes may be improved, but costs will probably go up.