Drug costs are one of largest healthcare concerns across the American political spectrum. But drug costs, pricing, spending and value are not the same thing, panelists emphasized during the BIO International Convention Tuesday afternoon.
Session moderator Susan Garfield, principal at EY, challenged herself to refrain from using the term “value,” to foster a discussion about “predictability:” if we can better predict outcomes, can we better allocate healthcare resources?
The challenge is that innovation breeds a lot of unpredictability, said Rena Conti, assistant professor of health policy at The University of Chicago. “There is an unprecedented wave of innovation – there will be cures, and in areas where there haven’t been therapeutic advances,” she added. Ron Cohen, MD, president and CEO, Acorda Therapeutics added, “you can’t know ahead of time which medicines will be successful—you must investigate every option to find what works.”
Panelists agreed that society wants new treatments, but no single party can solve the value conundrum alone. Dave Ricks, senior vice president of Eli Lilly and Company and president of Lilly Bio-Medicines, referenced Lilly’s collaboration with Anthem as an example of payers and industry finding common ground. The companies’ value-based payment arrangement may soon gain greater footing in the industry, said Michael Sherman, MD, MBA, MS of Harvard Pilgrim Health Care. Harvard Pilgrim struck a similar deal with Amgen.
“It’s about putting your money where your data is. We get angry when drugs cost thousands but have a variable response,” said Dr. Sherman. Susan Garfield and Glen Giovanetti, also representing EY’s life sciences practice, reminded the audience that products come to market with clinical trial data rather than real-world evidence, so there’s a “value gap” perception at the time of launch. To bridge that gap, industry should consider collaborations aimed at co-creating data to enable a proactive, systematic approach to pricing decisions.
Just as it’s critical for industry to make sure clinical data endpoints are meaningful and accessible, the insurance system has an important role in providing patient access, said Dr. Cohen. Dr. Sherman said the industry gold standard will be creating payment models “that show it’s irrational to not pay for something.”
That’s more complex than it sounds, suggested Conti. The proliferation of next-generation sequencing-based diagnostics and new vaccines and public health solutions warrant unique payment models, she said.