HHS Holds Forum on Affordable Healthcare

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On November 20th, the U.S. Department of Health and Human Services (HHS) held a forum entitled “HHS Pharmaceutical Forum: Innovation, Access, Affordability and Better Health.” A list of the speakers and their biographies is available here, and a link to video recordings of the proceedings is available here.

The forum brought together panelists and speakers from government, big pharma, consumer advocacy, and journalism to discuss how to improve patient access to pharmaceuticals by working together to properly incentivize the major players across the industry.

The forum addressed change in the pharmaceutical space, with Douglas Long, VP of Industry Relations from IMS Health, noting that approval of new generics has been slowing over the last decade and a half, while biologic and specialty pharmaceutical sales have been growing incredibly fast, with specialty sales accounting for 35% of pharmaceutical spending.

A good chunk of the forum was dedicated to rising healthcare costs. Daniel Durham, Executive Vice President of Strategic Initiatives at America’s Health Insurance Plans (AHIP) said that “we need innovative medicine, but they have to be affordable and prices have to be sustainable.” Consumer Reports presented data that showed that one-third of Americans are hit by high drug prices, and that when that happens, patients are more likely to skip filling a prescription, or to cut pills in half (without a doctor’s direction) in order to save money. Kaiser Permanente presented the results of a poll that showed that respondents, irrespective of political affiliation, supported legislation that made high-cost drugs available to those with chronic conditions. Respondents were also interested in the government taking action to lower prescription drug prices.

Stakeholders generally agreed that a move to “value” based contracting was warranted in order to address rising costs, but also that there was no easy way to define “value.” Bernard Tyson, CEO of Kaiser Permanente, said that “I’ve talked to enough people to know that we don’t really have a common definition for that term yet … Depending on who is promoting value-based there is a view that one may or may not agree with.”

Some solutions were proposed by pharmaceutical companies and health plans to implement value-based pricing and improve transparency. These included Merck and Novartis’s plans to introduce rebates for drugs that do not perform as well in the real world as they did in clinical testing, and Express Scripts’s idea of guaranteed patient adherence contracts, which would give rebates to health care sponsors when patients do not adhere to a drug treatment regimen.

The bottom line of the presentations was that, even if there is great innovation to produce new treatments, nobody is benefited if those treatments are too expensive to implement. It will be up to the major players in the government, pharmaceutical industries, health care, and consumer advocacy groups to ensure that the fruits of medical innovation are able to be utilized by the patients who need them.

Stay tuned to Big Molecule Watch for further developments.

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