Food for Thought: In the Health Care Sector, Who Should Choose Which Treatment Is Best?

The healthcare sector is under scrutiny in major developed countries across the globe. Some nations, like the UK and Germany, have already developed strict guidelines to determine the effectiveness of therapeutics and medical technologies, which must undergo comprehensive cost-benefit analyses as a pre-requisite for reimbursement. You can read more information about European regulations, especially German efforts, in our previous articles about the German Drug Reimbursemend Law AMNOG.

While cost-cutting is not as important in the U.S. healthcare system (yet), the emphasis on so-called comparative effectiveness research (CER), which is to assess the most effective treatment options for a patient,  has become undisputed.

An article in Knowledge@Wharton examines the pros and cons of CER efforts worldwide, stating that  “while not specifically designed to address health care costs, CER could ultimately lead to changes in the ways people seek medical treatment, the development of innovative remedies and other trends within the industry that could impact costs.”

Wharton healthcare management professor Scott E. Harrington takes an even more critical view: “The fear is that significant government involvement in CER will give rise to some form of restrictions on access to care [or to] particular treatments based on research studies and bureaucratic decision-making,” he says. “It might not be tied to what people want to have and what they are willing to pay for.”

On the other hand, if properly applied in both the state-funded and private healthcare sector, CER may incentivize biopharmaceutical and medical device companies to invest even more money into first-in-class or best-in-class innovative treatments by granting special patent protection and market access.

Knowledge @Wharton: In the Health Care Sector, Who Should Choose Which Treatment Is Best?, March 2011