Use of "Efficacy" and "Effectiveness" Often Misleading and May Skew Reimbursement Decisions

Recent Study Demonstrates Interchangeable Use of Terms That Rely on Different Circumstances

NEW YORK, Nov. 6, 2012 -- A recent global analysis of product evaluations for Health Technology Assessments – which are often influential in decision making for approving and/or providing reimbursement for pharmaceuticals and other medical technology – found that the use of the word "efficacy" and effectiveness" proved misleading in the context of reimbursement decisions, which may negatively affect their outcomes.

The study, presented at the International Society of Pharmacoeconomics and Outcomes Research conference in Berlin, suggests that while agencies state they are evaluating efficacy and effectiveness a similar number of times, their evaluations are generally for efficacy. This is important based on the actual meanings of the terms. Efficacy entails how a drug performs in an ideal or controlled circumstance, as in the context of a clinical trial. However, effectiveness describes a drug's success in real-world circumstances where the patient population and other variables cannot be controlled. Although reimbursement decisions are based on HTAs, the study demonstrated that the term effectiveness is often used when the evidence presented for consideration is often based on clinical trial scenarios rather than real world circumstances.

"These two terms have been used interchangeably for quite some time," said Yin Ho, MD, MBA, CEO of New York-based Context Matters, and co-author of the study. "However, the difference between them is a vital one to understand when making reimbursement decisions. It is even more surprising that so many of the HTAs that we evaluated interchanged the two terms, such that only one actually looked at effectiveness."

The study examined 38 HTAs from English-speaking countries, of which 20 stated they were evaluating effectiveness. Of the 20, only one actually evaluated real-world use of the drug. Conversely, 17 stated they were measuring efficacy and actually did so. Interestingly, the UK-based NICE and Scotland-based HIS were the two agencies of six that had the most discrepancy between the two terms.

The study was sponsored and performed by Context Matters, Inc.

Context Matters, Inc. is the next generation of healthcare data analytics, focusing on risk assessment metrics for pharmaceutical and biotechnology products. Its data-driven /evidence-based approach begins with our proprietary software database platform of intelligently culled, curated, and relevant business information and data to answer strategic business questions and provide actionable analysis. Its platform and approach result in more informed decision-making by allowing users to access and understand complex data that has never before been quantified or aggregated through a tailored, needs-based approach.