Sparks Fly at Prix Galien Forum on US Health Reform

Last week’s Prix Galien Forum on global issues in life sciences was not without controversy. The absence of to be ousted Sanofi chief Christopher Viehbacher loomed over the event and notably on the day’s most contentious panel on US Healthcare Reform.

Standing in for Viehbacher on the panel was Elias Zerhouni, President, Global R&D for the French pharma giant. Zerhouni stressed in his opening comments that the Affordable Care Act (ACA) is just the initial step in healthcare reform and predicted major tectonic shifts still coming.  “Everything is under tension right now,” he said regarding the US healthcare system, though his words could aptly have described his own boss’s standing.

Riling the audience at the Alexandria Center for Life Science, New York, was Ezekiel “Zeke” Emanuel, Vice Provost for Global Initiatives and Chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania, who called for a reality check on pharma industry profits and drug prices. “There are plenty of companies out there innovating and not getting 35% profit margins,” said Emanuel.

The current system is on its way out, and the industry can squeeze out profit for the next five to seven years, added Emanuel. Looking at three major axes of the ACA reform, access to care, quality of care and better value through cost management, the ACA is a big success, claimed Zeke.

On the issue of industry pricing and profits, other panel members like Zerhouni and George Scangos, CEO of Biogen Idec, challenged Emanuel’s premise. Looking at profits across the biotech and pharma, rather than the few nosebleeding outliers, the industry is actually less profitable than others, noted Zerhouni. Scangos said that competition within therapeutic segments was bringing margins down particularly in areas like diabetes and respiratory disease.

Emanuel predicted widespread adoption of Accountable Care Organization and of innovative delivery systems, with the difference between payers and providers disappearing. “There’s going to be a lot of Kaisers out there,” he said.

The innovative delivery systems will be defining standard of care, and they will look carefully at spending, he said. It will be a rigorous environment with a relentless downward pressure on costs and pricing, added Emanuel.

Mark McClellan, senior fellow and director of the Health Care Innovation and Value Initiative at the Brookings Institution cautioned the idea that these very large systems would be an efficient route to reduced costs.

The system is clearly moving away from a fee for service model and towards being value based, tied to provider accountability, said McClellen.

Demonstrating economic value of a drug used to be an afterthought for pharma, said Scangos. In designing drugs and trials, maybe we can agree to good economic practice in drug and trial design, he concluded. 

The awards:

The Forum was followed by the 2014 awards session, which takes place yearly under the great blue whale at the American Museum of Natural History.

Stryker for Trevo ProVue won in the Best Medical Technology Category.

HEMACORD from the New York Blood Center’s Howard P. Milstein Cord Blood Center earned Best Biotechnology Product.

Gilead Sciences took home the award for Best Pharmaceutical Agent for Sovaldi.