Reform sets big budget for comparative research

The latest beneficiary of healthcare reform to step into the spotlight: Comparative effectiveness. The bill signed by President Obama earlier this week sets up a new institute for head-to-head studies of drugs and devices--and arms it with a $500 million annual budget. That positively dwarfs the $1.1 billion in comparative-effectiveness funding approved by Congress last year.

It'll get off to a slow start, however, with just $10 million in funding for 2010; the big money won't kick in till 2013, Bloomberg reports. But it's not only the institute's budget that Congress was hoping to pump up. It wants this institute to save the government some money by identifying the most effective treatments, so that healthcare providers can focus on what works.

The law stipulates that Medicare can't use institute-funded research as sole justification for denying reimbursements. But Leerink Swann analyst John Sullivan tells the news service that "substantial savings" could still be had. If a branded drug is proven to work no better than a generic, for instance, the research could steer more doctors and patients toward the lower-cost alternative.

Sullivan expects the new institute to first focus on drugs used by large numbers of people, such as brand-name statins (Pfizer's Lipitor, AstraZeneca's Crestor), or Johnson & Johnson's anti-inflammatory drug Remicade. In fact, the previous comparative-effectiveness funding spawned a list of treatments to target. And there are plenty of candidates on it.

- read the Bloomberg story