The collision between the “volume-to-value” movement and the pharmaceutical and biotech industries over the next few years will have a powerful impact on them and on the healthcare industry and on us as customers, patients, and payers.
On the one hand, pharma is perhaps the part of the healthcare industry least exposed to direct price regulation under the Obama reforms. The actual costs of pharmaceuticals have been rising as a percentage of what people spend on healthcare, and are seen as the part they have the least influence on. At the same time, many new drugs for cancer and other life-threatening diseases have come with astonishingly high price tags, often not fully covered by insurance (due to the high deductibles and co-pays of the new plans), and with few ways for regulators or the market to push back on them. The public perceives these huge price tags as threatening people with a Hobson’s choice of bankruptcy or death. In the volatile political atmosphere of the 2016 elections, this leaves the pharmaceutical industry highly exposed to political attack and actual new price regulation.
On the other hand, the pharmaceutical and biotech industries also potentially offer some of the best answers to bringing the cost of healthcare down through the use of personalized medicines, smart medicines, new methods of administration such as implants, as well as the possibilities glimmering at us from recent research of real breakthroughs in such important chronic disease areas as Alzheimers, diabetes, addiction, behavioral medicine, and functional medicine. For the most part, though, these answers remain potential. We will not see them adding to the “value” side of the equation until they become fully integrated into a system that is at risk for the health of its customers and using every trick in the handbook to bring those costs in line.
Continue reading “Pharma and Volume-to-Value: The Big Throwdown”
Filed Under: OP-ED
Tagged: Bioetch, Cost Benefit Analysis, Pharma, Value
Apr 14, 2015
Few people know that new prescription drugs have a 1 in 5 chance of causing serious reactions after they have been approved. That is why expert physicians recommend not taking new drugs for at least five years unless patients have first tried better-established options and need to. Faster reviews advocated by the industry-funded public regulators increase the risk of serious harm to 1 in 3. Yet most drugs they approve are found to have few offsetting clinical advantages over existing ones.
Systematic reviews of hospital charts by expert teams have found that even properly prescribed drugs (aside from misprescribing, overdosing, or self-prescribing) cause about 1.9 million hospitalizations a year. Another 840,000 hospitalized patients given drugs have serious adverse reactions for a total of 2.74 million. Further, the expert teams attributed as many deaths to the drugs as people who die from stroke. A policy review done at the Edmond J. Safra Center for Ethics at Harvard University concluded that prescription drugs are tied with stroke as the 4th leading cause of death in the United States. The European Commission estimates that adverse reactions from prescription drugs cause 200,000 deaths; so together, about 328,000 patients in the US and Europe die from prescription drugs each year. The FDA does not acknowledge these facts and instead gathers a small fraction of the cases.
Perhaps this is “the price of progress”? For example, about 170 million Americans take prescription drugs, and many benefit from them. For some, drugs keep them alive. If we suppose they all benefit, then 2.7 million people have a severe reactions, it’s only about 1.5 percent – the price of progress?
However, independent reviews over the past 35 years have found that only 11-15 percent of newly approved drugs have significant clinical advantages over existing, better-known drugs. While these contribute to the large medicine chest of effective drugs developed over the decades, the 85-89 percent with little or no clinical advantage flood the market. Of the additional $70 billion spent on drugs since 2000 in the U.S. (and another $70 billion abroad), about four-fifths has been spent on purchasing these minor new variations rather than on the really innovative drugs.
In a recent decade, independent reviewers concluded that only 8 percent of 946 new products were clinically superior, down from 11-15 percent in previous decades. (See Figure) Only 2 were breakthroughs and another 13 represented a real therapeutic advance.
Spokesmen for the pharmaceutical industry point out that therapeutically similar drugs have advantages. First, physicians need some choice within a therapeutic class because some patients do not respond well to a given drug. This is true, but after about three choices, there is little evidence to justify a 4th , 5th, or 6th in a class.
Continue reading “Pseudo Innovation”
Filed Under: THCB
Tagged: FDA, Innovation, New drug approval, Pharma, R & D, The trial journal pipeline
Jul 31, 2014
Tech giants storming the digital health landscape will be center stage at Health 2.0’s 8th Annual Fall Conference in Santa Clara, CA. An impressive line-up of health and tech executives headline three full days of live demos and innovative sessions. Highlights include keynotes from visionary physicians Eric Topol and Patrick Soon-Shiong as well as Samsung Electronics President, Young Sohn in conversation with Health 2.0 CEO, Indu Subaiya. Leaders from Intel, Humana, IBM Watson, Qualcomm Life, Merck, athenahealth, eClinicalWorks and the Office of the National Coordinator for Health Information Technology (ONC) will showcase and discuss their latest technologies and initiatives on the main conference stage this fall. As always, Health 2.0 features over 150 live demos of new technology, 250+ speakers, 50+ sessions, more networking, and deals-done than anywhere else in health technology.
The main stage will feature the following panels:
Smarter Care Delivery: Amplifying the Patient Voice: Matthew Holt, Co-Chairman of Health 2.0, sparks the discussion on how new technology platforms, payors, and providers are working together for enhanced patient care delivery and engagement.
Consumer Tech and Wearables: Powering Healthy Lifestyles: Bringing together the most innovative wearables that are pushing individualized medicine into the future, Indu Subaiya, CEO of Health 2.0, leads this session focused on how consumers are experiencing new lifestyles centered around technology. Don’t miss the live fashion show featuring all the latest trends in digital health wearables!
Buy, Sell, Exchange: New Markets for Consumers, Employers, and Providers: Nearly a year after ACA implementation, this session will dive into the new ways benefits are being offered to consumers, how employers are buying care directly, and what new technologies are enabling change in direct care provision.
Data Analytics: From Discovery to Personalized Care: This panel focuses on how data analytics and powerful visualizations are pushing forward clinical research. Highlights will include genomics, non-invasive diagnosis tools, and integrated data collection are uncovering new discoveries, promoting personalized medicine and new care protocols.
Returning crowd favorites include 3 CEOs … (and a President!), The Unmentionables hosted by Alexandra Drane, The Frontier of Health 2.0 hosted by David Ewing Duncan, and Launch! with ten brand new companies unveiling their products for the very first time! Many more sessions and panels can be found on the Health 2.0 online agenda. Continue reading “Breaking: Health 2.0 Fall Conference Lineup Is Out!”
Filed Under: THCB
Tagged: Data, David Ewing Ducan, Eric Topol, Health 2.0 Fall Conference, Patrick Soon-Shiong, Pharma, Samsung, Wearables
Jun 25, 2014
The transatlantic stand-off between the two pharmaceutical giants, Pfizer and AstraZeneca, is over; possibly for good. With Pfizer having failed to conclude a £69bn deal with the British-Swedish multinational pharmaceutical firm, almost £7bn was wiped from AstraZeneca’s share value.
AstraZeneca’s board, which decided that Pfizer’s bid was inadequate, has subsequently been criticised by major shareholders for “failing to engage”. Pfizer meanwhile, has been accused of being driven purely by the lure of lower taxes, job cuts and budget reductions. We have rounded up the reasons why we think that Astra Zeneca were right to reject the takeover bid from Pfizer.
The proposed takeover had major implications for several sectors. From major health and pharmaceutical recruiters to manufacturers and research companies, all would have been affected by Pfizer’s huge takeover bid. Despite repeated initial assurances from Pfizer’s CEO, Ian Read, both AstraZeneca and Pfizer finally acknowledged in last week’s parliamentary select committee meeting that there would be cuts to both jobs and research.
Indeed, even before the failure of the bid, many academics, scientists and even union leaders were accusing Pfizer of being driven purely by the possibilities of a lower taxes and reductions to the research budget. Pfizer had already been described by a former boss of AstraZeneca as a “praying mantis” ready to “suck the lifeblood out of their prey”.
However, AstraZeneca’s current chairman, Leif Johansson said that the deal represented “a significant risk to shareholders.”
Continue reading “Three Reasons AstraZeneca Were Right to Reject Pfizer”
Filed Under: THCB
Tagged: AstraZeneca, mergers and acquisitions, Pfizer, Pharma
May 30, 2014
The ever-blurring line between the practice of medicine and the business of profiting from unhealthy lifestyles was crossed again Wednesday, as Aetna announced a collaboration with two pharmaceutical companies to pitch their prescription weight loss drugs to selected Aetna members.
This announcement crosses multiple lines, not just one. First, no insurer has ever announced that it would openly direct a specific class of members to use particular proprietary drugs. Disease management (DM) programs rarely recommend specific drugs, and certainly in the exceptionally rare instances when they do, the recommendations are not specific brand-name drugs (in this case, Arena’s Belviq and Vivus’s Qsymia).
Instead, DM focuses on improving compliance with existing drug regimens, and DM firms encourage members “talk to their doctor” about changing therapies. While DM companies shy away from directing patients to specific products, physicians and pharmacists have discretion to discuss the full range of covered generic and brand products with patients, in order to optimize therapy and close algorithm-identified care gaps.
Second, there are no generally accepted care algorithms (other than those created by the manufacturers of those products) for these two drugs in the treatment of obesity. So there is no “gap” to fill. If there were an accepted protocol, these drugs might be blockbusters but instead Belviq’s recent quarterly sales were an anemic $4.8-million, “well below even reduced Wall Street expectations,” while QSymia sales are “flailing” at $6.4-million for the same period.
Obese people and their physicians seem to be avoiding these drugs in droves. Regardless of what Aetna and the manufacturers believe about their effectiveness, or whatever promotional deal they’ve cut, market reaction is telling a different story, and unfortunately for Aetna, Vivus, and Arena we live in a market economy.
Continue reading “Dr. Aetna Will See You Now”
Filed Under: THCB
Tagged: Aetna, Al Lewis, Belviq, Disease Management, Obesity, Pharma, Qysmia, Vik Khanna, Wellness
Jan 15, 2014
It’s officially the holiday season, which means 70,000 people have temporary jobs at Amazon fulfillment centers to ensure that your gifts arrive exactly when they’re supposed to. While these jobs aren’t exactly easy or high-paying – there’s been plenty written about the not-so-awesome working conditions – it’s in many ways remarkable that Amazon is able to easily leverage the population of a small town less than 15 years after a panic-filled Thanksgiving led to the mammoth and tightly-controlled supply chain system that’s in place today.
The “Save Santa” incident, described in Businessweek reporter Brad Stone’s recent book The Everything Store: Jeff Bezos and the Age of Amazon, was an “all-hands-on-deck emergency” in 1998 resulting from one of the biggest problems an online store can have: there were far more orders coming in than shipments going out. This required all employees – including the executives – to work a graveyard shift at one of two warehouses. “They brought their friends and family,” writes Stone, “ate burritos and drank coffee from a food cart, and often slept in their cars before going to work the next day.” Bezos held contests to see who could pick items off shelves the fastest. Then he vowed the company would never have an inventory shortage again.
“The underlying truth is that Amazon becomes, like almost like all retailers, a different company during the holidays,” Stone explained to me over the phone. “Volume grows over the previous year. The already aggressive and fast-moving environment in the headquarters and fulfillment centers become manic. I describe it as two Amazons: one that operates for 10 months and the other that operates for two months out of the year.”
Continue reading “How One Bad Thanksgiving Shaped Amazon”
Filed Under: Tech, THCB
Tagged: Amazon, Gretchen Gavett, Pharma
Dec 2, 2013
… and a call to action. This case study is based on my meeting with the Center for Health Information and Analysis (CHIA) in my home state. CHIA is an all payers claims database, a massive collection of diagnoses, locations, dates and prices for all of your health services across all of your providers and insurers. Whether it’s claims or health records, almost every state and many private clearing houses are setting up to monitor you.
Your information can be used by business to manipulate prices for maximum profit, or by you to inform your choice of health insurance plans and health care providers.
Unfortunately, business can get your information but you can’t. This reflects an industry strategy to obstruct the market-based features of the Affordable Care Act. I hope you will take this case study, edit it, and file it with the Attorney General and Governor in your state to ask for your data as a consumer protection issue. That’s what I’m about to do.
My state is #1! Go Massachusetts! My state is #1 in health care costs. It’s also #1 in implementing a health insurance exchange (Romneycare 2006) and a leader in state surveillance with the 2012 cost containment law known as Chapter 224. Chapter 224 mandates various state surveillance mechanisms including a health information exchange that monitors encounters and an all payer claims database called “the center”.
The cost containment law also includes some consumer protections. Line 1909 states:
“To the maximum extent feasible, the center shall also make data available to health care consumers, on a timely basis and in an easily readable and understandable format, data on health care services they have personally received.”
Although the state surveillance is in place, and the price fixing that keeps us #1 is ongoing, the consumer protection part of the law is not implemented. So, I took the opportunity to meet with the executive director of CHIA and their chief legal counsel and get the scoop on why the state is not following the law. To paraphrase their explanation: “It’s too hard.”
Continue reading “State Surveillance Endangers the Affordable Care Act: A Case Study”
Filed Under: THCB
Tagged: Adrian Gropper, Center for Health Information & Analysis (CHIA), Consumer Directed Healthcare, Health Insurance Exchanges, Health Plans, Massachusetts, Pharma, The ACA, The States
Oct 18, 2013
Will all the White House messages, the stream of breathless Twitter updates on the number of hits and enrollments, and the press hype surrounding opening day send the uninsured public into panic mode? Will they prompt buyers to consider only the premium and click to enroll ASAP? And why not? For weeks the administration, state exchange officials and supporters of the Affordable Care Act have been telling the public how cheap premiums will be — much cheaper than expected.
A Pennsylvania woman told me she was chomping at the bit to enroll because she was eager to dump her policy from Aetna for a cheaper model from Blue Cross. Never mind that she had no idea whether the coverage was better, the same, or worse.
A Nebraska woman heard there was a worksheet to fill out and it had to be completed by October 1. It was first-come-first-served, an agent had told her.
If cheap premiums were the only thing shoppers had to consider, this sense of urgency might be fine. But it’s not. Here’s the problem.
Selecting a health insurance policy is fraught with potential missteps and misunderstandings. As the Nebraska woman told me, “You’re walking into a chasm of uncertainty. It’s like shopping for a used car. You don’t know if you’re getting a lemon,” a lemon you’re stuck with until the next open enrollment.
For consumers, the key advice right now is: don’t rush into anything. Tuesday, October 1st marked the first day of a six-month open enrollment period, not the last. Coverage doesn’t even begin until January 1, 2014, so there’s no need to buy the first policy you see. If you do want coverage on January 1, the deadline for enrolling is Dec 15.
Continue reading “Of Course, Then There’s The Fact That You May Be Better Off Waiting To Buy Coverage, Anyway …”
Filed Under: Uncategorized
Tagged: Health Insurance Exchanges, Health Plans, Pharma, Premiums, The ACA, Trudy Lieberman
Oct 13, 2013
All of the state health insurance marketplaces (also known as exchanges) are online, but millions of expected users may have a hard time finding them. Marketplaces will enable shopping and enrollment mainly through their websites. States are using a variety of promotional strategies, but most people will likely find marketplaces in the same way they find other websites—through common keyword searches on Google, by far the nation’s dominant search engine. Poor search engine results can create serious barriers to shopping and enrollment, the major measures of success for marketplaces and, by extension, the success of the Affordable Care Act (ACA).
We used standard methods to assess Google results for the 17 marketplaces operated by 16 states and Washington, DC that offer individuals, families, and small businesses a place to shop for health care coverage. Over three days in mid-September, we looked at results for keywords that data from Google show people are commonly using to search for health insurance. We examined both unpaid (or “organic”) and paid (or “sponsored”) results. Although research shows that unpaid results get more attention, paid results can also lead to page views.
Our preliminary findings show that marketplaces for four states—Idaho, Maryland, New Mexico, and New York—and Washington, DC did not appear on the first page of Google results, which generates 92% of all page views. In addition, both unpaid and paid search results for most of the remaining 12 states were frequently absent from page one.
With enrollment in the marketplaces opening October 1 for coverage beginning January 1, this would be a good time to focus on search engine optimization (SEO), the process of increasing the rankings of unpaid or “organic” search results. Once implemented, SEO results can be seen quickly, especially for a topic as popular and important as new health insurance options. However, it requires analysis, planning, and time to implement.
Methods for Conducting Search Engine Result Testing
To test search engine results for state-operated health insurance marketplaces, we used the five keywords most effective in producing page views of a prominent healthcare-related website produced by a federal client: Affordable Care Act, affordable health care, health care, health insurance, and Medicaid.
Continue reading “Not Quite Ready For Prime Time: The State Health Insurance Marketplaces and Google”
Filed Under: Uncategorized
Tagged: David McCormick, Elaine K. Swift, Google Search, Health Insurance Exchanges, Health Plans, Pharma, Search Engine Optimization (SEO), The ACA, The States
Sep 17, 2013
The FTC has found that healthcare fraud has been on the rise lately, and will likely continue to increase until October. Let’s talk about how to spot the scams and avoid any problems when you’re ready to make the switch over to Obamacare.
The Obamacare Card Scam
One of the most popular healthcare scams that’s been circulating as October 1st approaches is known as the “Obamacare card.” It’s a technique used by fraudsters to steal consumers’ credit card information and social security numbers.
How does the Obamacare card scam work? Basically, victims get a phone call from someone claiming to represent the government. The caller informs them that they need this insurance card to be eligible for coverage under the Affordable Care Act, or they may say the Obamacare card provides extra discounts. They ask for private personal information so they can send you the card.
But there’s no such thing as an Obamacare card — you’re just giving your info to scammers and identity thieves.
The health insurance marketplace goes into effect in October, and the FTC expects the number of related scams to rise in the meantime.
The Information Update Scam
Another popular scam involves fraudsters posing as Medicare officials. These fake Medicare representatives call consumers and say they’re updating or verifying personal information. The consumers are told that they might face some sort of consequence if they don’t comply.
The Sacramento Bee has more:
“…impostors claiming to be from Medicare told consumers they needed to hand over their personal or financial information in order to continue eligibility because ‘change is on the horizon.’
But nothing in the Affordable Care Act threatens existing benefits or medicare Enrollees…”
In other words, you shouldn’t be getting any Medicare calls because of the Affordable Care Act. If you have concerns about your Medicare benefits, don’t respond to a cold-caller. Instead, contact your Medicare representatives directly.
Continue reading “What You Need to Know About Obamacare Scams”
Filed Under: Uncategorized
Tagged: Health Care Reform, insurance fraud, Medicare, Obamacare, Pharma, Sean Boulger, The ACA
Jul 17, 2013