At the Financial Times: Health and Life Sciences Summit, held in New York City, leaders from pharma, biotech and other sub-sectors of the healthcare industry came together to discuss a shared hot topic: value, access and pricing in medicine in the new health economy. With drug companies, insurance providers and pharmacies alike facing increased scrutiny over the cost of therapies, executives from across the healthcare industry, as well as government and non-government leaders in health policy reform, weighed in on their approaches to defining and delivering value in healthcare.
Facing new industry disrupters, and whether these disruptions opened the door to opportunities or created further challenges to address, was also a common thread discussed across panels at the Financial Times event. In pharma and biotech, disruption can take the form of “bad actors” whose individual actions – for example, increasing the costs of long-established and low-cost medicines – can result in broad, bipartisan criticism of the entire industry. In the payor setting, navigating the current uncertainties around healthcare reform, as well as the recent shift of consumers beginning to manage their health benefits rather than working through employers, is challenging the financial models in place to access treatment.
Even the medical community is facing disruption, in the form of upcoming reform mandated by MACRA (the Medicare Access and CHIP Re-authorization Act of 2015), which is shifting physician reimbursement from a volume-based model to a system based on patient outcomes. This new approach places the onus of coordinating patient care on physicians’ offices, rather than the patient, and reflects that better patient outcomes, particularly in chronic conditions, rely on care from both primary care physicians and specialists as well as clear medical records shared across systems.
Not surprisingly, there was healthy debate among panelists at the summit about the best path forward, particularly about measures to control pricing. However, many agreed on several approaches to better explain and manage medical expenses in the complicated American health system, both for the companies that operate within it and the consumers who rely upon it:
- Increased cross-industry coordination: Drug makers and payors agreed that a systematic approach is needed among companies to create a long-term solution for affordable drugs. Alignment across the healthcare industry on outcomes measurement is also necessary to ensure that the price of medicines reflects the benefits they provide. Outside of medicine, healthcare companies are increasingly supporting integrated programs that help manage community health holistically, including investing in education, preventative measures and supportive social structures, recognizing that medicine is just one part of successful treatment plans.
- Innovative approaches to delivering care: Beyond the scientific breakthroughs that are reshaping the treatment landscape, healthcare companies are embracing less conventional approaches to delivering care. From offering virtual physician consultations to partnerships with transportation companies like Lyft, health systems like New York Presbyterian Hospital and Ascension Health are reducing the barriers to accessing care. Companies like Oscar, Hometeam and mySugr are also using mobile technology and platforms that allow consumers to manage their care and treatment needs at their own convenience.
- Better transparency: Panelists noted that while information about drug pricing is available, the challenge for the average consumer is accessing and comprehending it. Is this truly transparency? PhRMA and the companies it represents are working to improve clarity on the cost of R&D and separate annual drug price increases (noted as three to six percent) from the triple-digit increases of companies “acting like hedge funds,” as Robert McMahon, Merck’s U.S. President, put it. On the other side of drug pricing are companies like Rx Savings, which offers a consumer-oriented platform to help patients navigate insurance providers and pharmacies to find the best price for medicines. These steps toward transparency are important; other healthcare companies may consider how they can further demystify complicated systems and pricing models for the average consumer, to help consumers make the best choices for their individual needs.
In his opening remarks, Dieter Weinand, president of Bayer Pharmaceutical, said that one “must be an optimist to be a scientist” given that progress is often incremental, an idea that rang true across many speakers’ remarks at the summit. While opinions varied about the cost and access issues to be addressed, and how to prioritize within the cultural landscape of longstanding healthcare practices and institutions, there was a shared motivation across event participants to develop new approaches to deliver and validate value. Health leaders at all levels are needed to inspire changes and make courageous decisions.
Laurel Butterfield is a senior manager, Global Sector Development, Health.
Carol Ready is a senior vice president, Health, Edelman New York.