In this original editorial piece, Elizabeth Garry (Aetion Inc.; MA, USA) discusses how real-world evidence (RWE) could be used to help inform healthcare spending and what resulting impacts this could have on health outcomes.
Garry is a Principal Scientist at Aetion Inc. She is an epidemiologist by training, with over 14 years of experience managing and implementing pharmacoepidemiological and clinical research.
Healthcare spending in the USA is nearly twice as high as other developed countries such as Canada, Germany and The Netherlands , with a minority of patients responsible for the majority of healthcare costs. Therefore, it was not surprising that in an analysis of a state-level cohort of commercially insured beneficiaries with diabetes, 20% of patients were observed to be responsible for nearly 80% of the healthcare spending .
“…the latest and greatest treatments are often the most expensive.”
Patients with chronic conditions – such as diabetes – often require a lifetime of treatment, resulting in continued demand for new and improved therapies. The catch, of course, is that the latest and greatest treatments are often the most expensive. As a result, decision makers – prescribing physicians, patients and payers – are often faced with the dilemma of whether to choose the newest treatment or one of the existing treatment options that may not only be more familiar but also less expensive, especially if available generically.
Payers have the difficult task of determining coverage for new treatments by developing drug formularies based on a combination of safety, efficacy and cost data – even if initial trial data are not representative of the payer’s target population. Cost can play a large role in mitigating uncertainties about the safety or efficacy of potential new therapeutics, therefore, coverage is often conditioned on prior treatment failure of one or more less expensive available treatments, which may lead to poorer health outcomes if the treatment is inferior or has an adverse effect.
“When there are multiple treatment options to choose from that range in cost, RWE can facilitate informed decisions about healthcare spending and ultimately improve health outcomes.”
RWE – the clinical evidence about the benefits or risks of a medical product derived from real-world data, commonly used to satisfy post-approval regulatory requirements to evaluate drug safety among patients treated in real-world practice  – has become an increasingly hot topic since the Cures Act was signed into US law in 2016 .
In fact, when the International Society for Pharmacoeconomics and Outcomes Research (ISPOR; NJ, USA) surveyed its membership last year, RWE was ranked number one among the top ten trends in 2020 for health economics and outcomes research, with half of the remaining trends relating to healthcare spending (drug pricing, affordability of novel and curative therapies, overall healthcare spending, value-based alternative payment models, and price transparency for healthcare products and services) .
When there are multiple treatment options to choose from that range in cost, RWE can facilitate informed decisions about healthcare spending and ultimately improve health outcomes.
RWE can be used to compare total healthcare spending – both pharmaceutical and medical – among patients using more expensive treatments and those using less-expensive alternatives. It is important to first understand the distribution of demographics, medication use, comorbidities and healthcare resource utilization (e.g. frequency of hospital visits, frequency of specialty care visits, duration of hospitalizations) among patients incurring the greatest costs.
“The same factors that might exclude patients from clinical trials…are often predictors of greater healthcare costs, which further underlines the importance of RWE.”
Predictors of high cost can facilitate identification of patients to target for intervention. The same factors that might exclude patients from clinical trials – for example, older age and multiple comorbidities – are often predictors of greater healthcare costs, which further underscores the importance of RWE.
In the diabetes care example referenced above, despite an increase in pharmaceutical spending, a substantial total healthcare savings was identified among patients at high cardiovascular risk initiating SGLT2 inhibitors – a newer, more expensive class of antidiabetic treatment not yet available generically – compared with those initiating sulfonylureas, which represent an older, less expensive class of antidiabetic treatment, available generically. This savings was largely driven by a reduction in hospitalizations . However, it is important to note that among the patients who were not classified as high cardiovascular risk, there was no clear pattern of cost savings identified, as the additional cost of the treatment outweighed the savings on medical spending, further highlighting the importance of use of RWE to identify targeted subsets of patients.
“When principled epidemiology and robust methodology is employed, RWE can inform prescribers, patients and payers about the value of their choices for prescribing, using and covering treatments, allowing them to make better decisions.”
To truly evaluate the value of a new treatment, one must consider more than just the price tag of the treatment itself; one must take account of the reduction in healthcare spending that accompanies improved health outcomes, benefiting both the patient and the payer. These types of RWE studies can be conducted using large, representative real-world data sources to make general recommendations to inform healthcare spending and improve health outcomes, such as targeting patients for educational interventions to improve care. They can also be conducted within a specific payer network to develop targeted pharmacy case management solutions and engage in outcomes-based contracting with manufacturers, without generalizability concerns .
The ultimate goal is to know what health treatments work, who they work for and what we should pay for them. When principled epidemiology and robust methodology is employed, RWE can inform prescribers, patients and payers about the value of their choices for prescribing, using and covering treatments, allowing them to make better decisions.
Elizabeth Garry is a full-time employee of Aetion, Inc., with stock options.
The opinions expressed in this feature are those of the interviewee/author and do not necessarily reflect the views of The Evidence Base® or Future Science Group.
 Papanicolas I, Woskie LR, Jha AK. Health care spending in the United States and other high-income countries. JAMA. 319(10):1024–1039 (2018).
 Garry EM, Schneeweiss S, Eapen S et al. Actionable real-world evidence to improve health outcomes and reduce medical spending among risk-stratified patients with diabetes. J Manag Care Spec Pharm. 25(12):1442–1452 (2019).
 United States Food and Drug Administration. Framework for FDA’s Real-World Evidence Program.
 114th Congress (2015–2016): 21st Century Cures Act.
 International Society for Pharmacoeconomics and Outcomes Research. 2020 top 10 trends for health economics and outcomes research.