NCPA - National Center for Policy Analysis


January 18, 2010

President Obama once famously quipped, "If there's a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that's going to make you well?"  Increasing the use of cheaper, but still effective treatments, medicines and procedures is one of the central ideas behind a new science called comparative effectiveness research (CER), says Tomas J. Philipson, the Daniel Levin Professor of Public Policy at the University of Chicago and the Chairman of Project FDA of the Manhattan Institute. 

Congress is poised to pass health care reform legislation that devotes dozens of pages to creating new agencies, commissions and standards for conducting CER.  CER is a good idea because it aims at cutting billions in unnecessary spending.  It can however be harmful when done through centralized methods, says Philipson: 

  • Fiscal pressures mean that sooner or later CER will drive reimbursement decisions for public programs like Medicare and Medicaid.
  • Some cheaper medicines may become first-line treatments, even if they offer worse outcomes for many patients.
  • The same meds that work well for some patients may not work for others; indeed they may make others worse.
  • Yet such "one-size-fits all medicine" will likely increase under centralized CER.

Clinical trials typically only tell us which treatment is better when administrated once to the overall population, when what we really need to know is the response of patients to subsequent treatments after they fail to respond to the first option -- as many patients often do, says Philipson.

With CER set to take center stage in our cost-control efforts, policymakers must proceed cautiously and improve the science before shifting to new reimbursement policies.  Choosing the blue pill now may give us a bigger headache tomorrow, says Philipson.

Source:  Tomas J. Philipson, "The Blue Pill or The Red Pill?", January 14, 2010.

For text: 


Browse more articles on Health Issues