The Food and Drug Administration (FDA) recently received kudos for partnering with social media and online communities to track adverse drug events reported by patients. While this sounds like good news, the fact is the FDA already tracks these events. In fact, the agency has logged more than 5 million reports (and counting) linked to more than 2,000 approved drugs. So isn’t it good for the FDA to gather even more information directly from patients?

Unfortunately, the answer is no. At least not until things change, because much of this valuable data is never used.

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The healthcare system is slow to adopt new technologies, and for all the talk about leveraging “Big Data,” the industry has been even slower to adopt analytics. In fact, few health plans and not one state Medicaid agency currently use post-approval adverse drug events intelligence when creating preferred drug lists, writing prior authorization criteria, negotiating supplemental rebates, educating prescribers and dispensers, or performing prospective, concurrent, or retrospective drug utilization reviews.

In 2014 alone, more than 900,000 serious adverse events from prescription drugs were reported to the FDA. Those reports included more than 216,000 hospital admissions, more than 20,000 disabilities, and worse, more than 94,000 deaths. Nearly a million patient lives are put at risk and billions of dollars are spent every year, yet there is no mandate to use data to inform making decisions about prescription medicines. Unfortunately, until this becomes a priority established by elected officials and government agencies, the status quo will remain.  

Recently, the Centers for Medicare and Medicaid Services released a proposed rule aimed at improving quality and performance of managed care plans that serve the Medicaid program. The new rule seeks to align Medicaid managed care regulations, increase accountability for managed care program rates and promote quality of care by requiring states to establish quality ratings for Medicaid plans.

More than half of all Medicaid beneficiaries (at least 39 million people in 39 states and the District of Columbia) have coverage through managed care plans and prescription drug benefits cost Medicaid more than $28 billion annually. Clearly this is an opportunity to strengthen the Medicaid drug benefit within managed care programs by including adverse drug event data in the overall quality and performance strategies. 

Take the case of using available data to improve formulary decision making for Hepatitis C medications. The new drugs Harvoni and Sovaldi have proven to be very effective in treating Hepatitis C. But they have made headlines because they are very expensive, and state Medicaid programs have had difficulty in determining how to pay for the drugs without bankrupting state budgets. If Medicaid providers were to look at existing data on adverse drug events, they could evaluate these drugs beyond cost alone.

For example, there are significant differences in adverse events among the six current Hepatitis C drugs. The rate of hospitalization associated with Incivek, for example, is nearly 21 times higher than treatment with either Harvoni or Sovaldi. This means while the price of Incivek is cheaper, Harvoni and Sovaldi may be safer and ultimately less expensive when you factor in total costs, including what Medicaid may have to pay long term for patients affected by negative side effects.

Without these data, states and health plans spend more money and patients have poorer outcomes. More importantly, patients are put at unnecessary risk and billions of taxpayer money is wasted on suboptimal and costly care. With its proposed rule for Medicaid managed care plans, CMS has a tremendous opportunity to reform prescription drug decision making by using data to improve outcomes, reduce death and disability, and cut federal and state costs.

I urge CMS to help shape the next era of healthcare improvement by employing these important data tools to safeguard the best interest of patients and lower healthcare costs.

Overstreet is co-founder and president of AdverseEvents, Inc., a healthcare informatics company that provides comprehensive analysis of post-marketing drug side effect data.