HFMA NEWS

Requiring larger preapproval clinical trials could be a cost-effective method of reducing post-approval injuries and deaths caused by new medications, according to a study published today on the Health Affairs web site.

Drug safety has been a much-discussed topic recently, but most of the attention has focused on strengthening postmarketing surveillance of prescription drugs. In their paper, researchers from Duke University point out the potential for strategies at the preapproval stage--before the Food and Drug Administration has cleared the drug--to detect adverse events caused by new medications, known as adverse drug events (ADEs).

The model put forward by the researchers examines how increasing the size of a clinical trial affects the odds of detecting an ADE. In general, the researchers say, the effect of increasing the number of patients in the trial depends on the “background” frequency of the ADE in the general population and the increased odds of encountering the ADE among those taking the drug (the “odds ratio”).

When they plugged in the cost of running a larger clinical trial, they found that increasing the size of a preapproval trial from 2,000 to 4,000 patients per treatment arm, for example, could be a cost-effective method of avoiding the ADEs. The incremental cost was approximately $27,100 per life-year saved. Read the report.

In response to concerns that the Centers for Medicare and Medicaid Service’s (CMS) oversight of suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) is inadequate to prevent fraud and abuse, the Government Accountability Office (GAO) conducted covert testing of the DMEPOS process. It found that weaknesses in the DMEPOS enrollment and inspection process have allowed sham companies to fraudulently bill Medicare for unnecessary or nonexistent supplies. It also confirmed the CMS estimate that from April 2006 through March 2007, Medicare improperly paid $1 billion for DMEPOS supplies--in part due to fraud by suppliers.

Specifically, in response to concern about vulnerabilities in the enrollment process, GAO used publicly available guidance to attempt to create DMEPOS suppliers, obtain Medicare billing numbers, and complete electronic test billing. GAO also reported on closed cases provided by the HHS Inspector General to illustrate the techniques used by criminals to fraudulently bill Medicare. Read the report highlights.