Three federal agencies (HHS, NIH, AHRQ) received $1.1 billion (as part of the stimulus plan) to perform comparative studies on the effectiveness of medical treatments such as drugs and devices. This is another chapter in the ongoing debate between free-market and government-control advocates.
In the free-market, better drugs should be prescribed more often and ineffective drugs should not get approved, and if approved, should go unused. (Incidentally, some ineffective drugs can get approved because of the archaic rule of the FDA that requires positive results in two well-controlled clinical trials, irrespective of the number of negative trials (e.g. 2 positive and 4 negative trials will still get your drug approved).
To the degree that free markets have not resolved this issue neatly, we have three factors to blame: 1.The hype and advertising, coupled with physicians’ participation in both, give the edge to the better publicized drug, not to the objectively better drug. 2. The differences between drugs are often too small to be meaningful. 3. The makers of the drugs hardly ever conduct comparator studies, mostly because they see no reason to risk an outcome unfavorable to their drug. (Another reason that companies don’t perform such studies is that to show small advantages requires very large and expensive trials).
Which brings us to the major problem with this new initiative: comparing “effectiveness” of drugs is not as simple as it sounds. Some advantages could be subtle but important (once a day versus twice a day), subtle but less important (fewer drug interactions) or balanced by an undesired effects (better efficacy but more nausea, for example). I suppose one can think of some situations where studies can be useful (e.g., where collective experience suggests that a drug is indeed inferior, but there is no formal evidence), but at the end this could all be a fool’s errand. The concern of the opposition to these studies is that the “inferior” drug will not be covered by insurance, but if the information is not acted upon, why get it?
On balance, the money could be much better spent on other things—for example, as I have commented before, on driving innovation in small biotech companies.

Subscribe in RSS Reader
If comparative effectiveness were only about drugs and drug companies didn’t practice the ‘art’ of patent extending with minor changes in formulation, then I would agree with you.
However…
Claritin/Claritin-D to name one in the drug realm.
Back surgeries have a long history. The example of what happened when Virginia Mason in Seattle changed the process and started sending people to physical therapy first and they reduced surgeries by 50%.
Knee replacement surgeries that are ineffective.
The list goes on, the waste in terms of overuse is legion. We need to begin to hold the system accountable for providing procedures and services that have incrementally better outcomes rather than simply the newest thing where demand is created by marketing and physician suggestion.
http://ilovebenefits.wordpress.com
I agree wholeheartedly with the comment. My focus was on drugs, because comparative studies would be a relatively new thing. If the money is going to be spent on other types of treatments (mostly surgical) – this would be very useful endeavor indeed, though, of course, such types of studies have been done for a long time. It will also be useful to continue to evaluate the utility of expensive diagnostic tests, often used as part of practicing defensive medicine.