Cost should be a part of federally funded studies comparing the benefits of medicines, according to a report released Tuesday by an influential science advisory board.

The report, written by the Institute of Medicine at the request of Congress, says studies comparing the benefits of diabetes drugs, epilepsy medicines and other treatments should include cost. "The overall value of a strategy can be understood best by considering costs and benefits together," according to the report, authored by more than 20 doctors and scientists.

The pharmaceutical industry has been working hard to ensure "cost" doesn't become an integral part of federally funded research comparing medical treatments, saying such a move equates to rationing. They also fear that comparing drugs based on costs may make patients favor older, cheaper medicines.

The report was done to help the federal government determine priorities for conducting studies that compare medical treatments. President Barack Obama's economic stimulus bill includes $1.1 billion for such studies.

The report recommends 100 initial priority areas where the government should fund studies to compare medicines and treatments. More than 10 of those priority areas include language about cost.

Among the highest priority recommendations is to study the effectiveness of biologics in treating Crohn's disease, ulcerative colitis, rheumatoid arthritis, and psoriatic arthritis. Biologics are derived from proteins.

Though no drugs are mentioned by name, drugs that fall into this category include Bristol-Myers Squibb Co.'s (BMY) Orencia and Abbott Laboratories' (ABT) Humira.

Another priority is to research the best treatment for a common heart-rhythm problem called atrial fibrillation that heightens the risk of strokes. The disorder is typically managed with drugs, but there is also a fast-growing market - where Johnson & Johnson (JNJ), St. Jude Medical Inc. (STJ) and Medtronic Inc. (MDT) are key players - for attempting to cure the problem with catheters that burn or freeze tissue.

The report says another priority should be comparing the "effectiveness and cost-effectiveness" of conventional therapies to treat type 2 diabetes versus conventional therapies and intensive educational programs. More than 20 million Americans suffer from diabetes.

Dr. Brian Strom of the University of Pennsylvania School of Medicine said comparing medical treatments helps doctors move away from "trial-and-error" treatments.

Strom, who reviewed the report for the Institute of Medicine, said it is often difficult for physicians to understand what treatments work best when there are multiple medicines and treatment options available.

- Peter Loftus, Jon Kamp and Alicia Mundy contributed to this report.

- By Jared A. Favole, Dow Jones Newswires; 202-862-9207; jared.favole@dowjones.com