June 30 (Bloomberg) -- Arthritis drugs that generated $16.9 billion last year for Amgen Inc., Wyeth, Abbott Laboratories and Johnson & Johnson warrant U.S. review as part of an Obama administration push to overhaul health care, a report said.

Outside advisers told the Department of Health and Human Services today that studies should compare the effectiveness of the drugs, including Remicade from J&J, and Enbrel, marketed by Wyeth and Amgen, in a family of medicines linked to cancer.

President Barack Obama set aside $1.1 billion in the U.S. economic-stimulus law to study which medical treatments are most effective, as a tool to revamp the health system and curb costs. The report today, by the Institute of Medicine, a Washington- based unit of the National Academy of Sciences, recommends how $400 million allocated to the health and human services department should be spent.

“Health care decisions too often are a matter of guesswork because we lack good evidence to inform them,” said Harold C. Sox, editor of the research journal Annals of Internal Medicine, and co-chairman of the advisory group in a statement.

The U.S. spent $2.4 trillion on health care last year, more than any other industrialized nation, and has higher rates of chronic disease and infant mortality, according to the Institute of Medicine report.

J&J fell 16 cents to $56.80 at 4 p.m. in New York Stock Exchange composite trading. Wyeth rose 4 cents to $45.49 and Abbott declined 1.6 percent to $47.04. Amgen slid 17 cents to $52.94 on the Nasdaq Stock Market.

Irregular Heartbeat

Other priorities in the report include comparing drugs to stabilize an irregular heartbeat with therapies that may involve surgery. Research should also compare use of behavioral therapy to medications for Alzheimer’s disease and dementia, the Institute of Medicine’s committee said.

The report also suggests studying the best ways to screen for hospital infections and comparing machines that peer inside the body, such as positron emission tomography, or PET scans, and magnetic resonance imaging, or MRIs.

Health and Human Services Secretary Kathleen Sebelius said in a June 27 interview she would like to see Congress remove restrictions on using cost-effectiveness studies to pick which drugs and medical devices Medicare will cover. Senator Judd Gregg, a New Hampshire Republican and member of the Senate health committee, argues along with other Republican opponents that such comparative effectiveness research would lead to the rationing of care.

“I am a believer that you should use evidence-based research to make decisions to figure out what strategies work, then have incentives to use the best possible -- not only lowest cost, but most effective -- treatment protocol,” Sebelius said.

Childhood Cancer

The U.S. Food and Drug Administration said last year it was investigating a possible association between Enbrel and Remicade and childhood cancer, following 30 cases of lymphomas in patients age 18 or younger who took the anti-inflammatory drugs.

The FDA began investigating cancer cases linked to the family of medicines, known as TNF blockers, which also includes Abbott’s Humira, more than 10 years ago. The prescribing information for all of the medicines already warns of cancer risks.

The FDA also added a so-called black box warning, its strictest, to Enbrel’s prescribing information last year describing links to deadly infections including tuberculosis and bacterial sepsis.

Wyeth spokesman Doug Petkus declined to comment, and Amgen spokesman David Polk wasn’t immediately available. Abbott spokeswoman Melissa Brotz didn’t return a call for comment.

“Comparative effectiveness research should inform medical decisions and not replace medical judgment or be used to limit treatment choices,” said Kathleen Buto, J&J vice president for health policy, in an e-mailed statement. “The ultimate decision about which treatment or intervention is best for a particular individual should remain between a doctor and patient based on real-world data and analyses.”

To contact the reporter on this story: Lisa Rapaport in New York at Lrapaport1@bloomberg.net

Last Updated: June 30, 2009 16:30 EDT