FT Healthcare Conference Society as Stakeholder

Speakers at the 2^nd annual Financial Times US Healthcare and Life Sciences conference in New York last week discussed the cost of health, and the implications of an increasingly vocal and influential stakeholder group: the local populace.

Pfizer CEO Ian Read, and FT pharmaceuticals correspondent Andrew Jack

After opening remarks from Andrew Jack, FT’s prolific pharmaceuticals correspondent, Pfizer CEO Ian Read took the stage at the sumptuous Metropolitan Club in Manhattan for a chat with Jack. The biggest issue facing the pharmaceutical industry today, said Read, is whether society is willing to pay for clinically meaningful products.

That thread wove through many of the panels afterward. Old debates about cost sharing, which focused on the role of insurance providers in managing the out-of-pocket costs of drugs to patients, have shifted into conversations about shared value, which puts the onus on industry to align societal economic needs with positive health outcomes, and profits. Jeff George, global head at Sandoz, described a company program in Ethiopia that voluntarily tests local pharmaceutical products for bioequivalence, to separate the pure from the placebo (or worse). This program helps protect the public health, while also screening out Sandoz’s counterfeit competitors, said George.

The most pressing quandary for Jan Groen, CEO at MDxHealth, a molecular diagnostics company, is “who will pay for companion diagnostics?” outside of the US. David Meeker, CEO at Genzyme, said “society is willing to pay for things that work” – companion diagnostics increase those odds. Responding to a question on the sustainability of ever-increasing prices for products targeting rare and ultra-rare diseases, Meeker suggested that yes, there had to be a ceiling, but he asked attendees how much it had cost to rescue the Chilean miners in 2010. Answer: “I don’t know, and it doesn’t matter,” since the cause was supported by the global community.

Of course, there aren’t some 200 mine collapses and rescues every month, with another 7,000 collapsed mines and trapped miners waiting impatiently to be rescued (or if there are, developed nations don’t hear much about them, and don’t bankroll the rescue operations). But Meeker’s point is well taken; more than $20 million was spent to save the lives of 33 miners, of which $15 million came from Chilean government coffers. Societies will have to make tough decisions, collectively, about the extent to which an individual taxpayer is willing to be his sister’s keeper, if governments plan to continue reimbursing orphan drugs at their current prices. Those decisions will inevitably increase scrutiny on pharma’s profit margins, requiring ever-greater transparency efforts, and a greater degree of sharing, in order to substantiate the price of innovation.

Colin Hill, CEO and Co-founder, GNS Healthcare

The question then becomes, according to Pfizer’s Read, whether productivity – understood as the successful development of safe and effective new treatments, and better health outcomes – matches the spending levels devoted to such efforts. Currently in the US, it doesn’t, said Read, but sharing clinical data with the general public – alltherage in Europe – is not the solution. Read said making this data too accessible jeopardizes the delicate risk/benefit calculation that is, or should be, the sole province of regulators.  “To dump patient-level data on the pavement and allow dozens of institutions to consider, evaluate, and review it, could have huge negative consequences for healthcare,” said Read.

On the other hand, Colin Hill, CEO of GNS Healthcare, a big data analytics company, said that clinical data sets are used by his company – along with data from hospitals, claims data, demographic data, genetic data, and data from electronic health records – to improve health outcomes. “The question is not, what is the best rheumatoid arthritis drug for the price, but what drug will work best for an individual patient at a specific progression of disease,” said Hill. Reliably predicting the right treatment for each patient, the first time, is the key riddle to solve, he said.

Hopefully that treatment is covered on the formulary. Read frowned at what he perceives as a shift in public focus from insurers to drug-makers. Insurance companies dictate expectations to patients and tell them which drugs they can, and cannot, receive. If drug companies did that, “there would be hell to pay,” said Read.

With all of the emphasis on “sharing,” at pharma industry events and in seemingly every new digital technology invented, it has become imperative to take a harder look at exactly what is being shared and with whom, and to identify the shareholders. Unfortunately when it comes to sharing the costs associated with a healthy population, people use their own unique algorithms to determine what constitutes a fair share. Everyone is an interested party.