By
Dan Leonard
November 25, 2015 at 5:00 am ET
“Together we can find a path that doesn’t ask us to choose between innovation and affordability.”
With those few words, spoken during her opening remarks at Friday’s U.S. Department of Health and Human Services (HHS) Pharmaceutical Forum on access, value and innovation, HHS Secretary Sylvia Burwell established a critical baseline for the conversation ahead.
This concept of balancing innovation and affordability has been voiced in a range of health policy circles—from patient organizations, like Patients Rising, to our work at the National Pharmaceutical Council (NPC)—for years.
And moving forward on this concept requires a path that balances “innovation and affordability.” It cannot and should not—as Marc Boutin, CEO of the National Health Council, shared on Friday—“address the cost of one piece [drugs] without looking at the entire ecosystem.”
The issue of drug costs is a pressing topic and, at NPC, we welcome the discussion, but all health costs need to be on the table. In too many ways, the current health care system isn’t working and fails to put value on what patients need most—progress over process. Together, the entire health ecosystem must work to find a path that moves away from outdated approaches and looks toward new thinking, innovative solutions, and meaningful collaboration.
So where should we begin? The answer most likely includes a range of approaches.
In fact, the biopharmaceutical industry and payers have already started exploring several options to protect patients’ access to care and appropriate treatments and encourage innovation.
For example, some health care payers and biopharmaceutical manufacturers have engaged in risk-sharing agreements (RSAs) that link coverage and reimbursement levels to how effective a therapy is and/or how often it’s used.
While challenges remain around the effort and cost of ongoing patient monitoring under RSAs, a recent study conducted by the National Pharmaceutical Council and the University of Washington found that the benefits—such as the ability for manufacturers to use RSAs to demonstrate their products’ effectiveness and for payers to reduce uncertainty around issues like clinical value—make RSAs worth exploring as a means to better align our health care ecosystem in the future.
Another approach already used by a variety of employers and Medicare and widely acknowledged for its potential to address a range of systemic issues is value-based insurance design (V-BID).
V-BID, which shifts our focus from “how much” to “how well” we spend in health care, not only recognizes the important concept of clinical nuance, or the idea that medical services vary in the benefit they provide, it also takes into account individual treatment effects, or what many refer to as heterogeneity.
Importantly, these varying individual treatment effects mean that not all first line therapies or services deemed standard of care will work well for every patient. Unfortunately, under our current system, patients who don’t benefit from that first biopharmaceutical are often required to try one or more treatment options until they find the one that works best. And, as a result of moving away from a first tier therapy, these patients frequently have to pay more for the higher, more expensive tier therapy—just because of their biological response. To address this challenge, some stakeholders are considering variable copays, in which the patient who biologically requires a different therapy is not financially penalized for it.
By continuing to shift our focus away from cost alone to more appropriate measures like clinical benefit and ultimate value, not only can we better ensure that all patients have access to the therapies that appropriately respond to their unique risk factors, medical history, lifestyle and genetic make-up, but we also can improve quality. As Centers for Medicare and Medicaid Services Acting Administrator Andy Slavitt said during the HHS Summit, “It’s about finding the right strategies to achieve both innovation and access.” And strategies such as V-BID, risk-sharing approaches and variable copays are certainly worth consideration.
In addition, as our use of technology in health care continues to grow, the biopharmaceutical industry can serve as a key partner to providers and patients in better understanding how our treatments are working and bringing value in real-world settings and working with payers to evaluate that evidence as they make coverage determinations.
Friday’s forum was a first step in starting the discussion about approaches to tackle a host of health care issues—from strengthening quality measures to enabling a more open conversation around value and economic data between payers and the biopharmaceutical industry—but it doesn’t end here.
Now, it’s time to roll up our sleeves and make meaningful changes to better ensure patient access and encourage innovation—together.
Dan Leonard is the president of the National Pharmaceutical Council (NPC), which sponsors and participates in research on the appropriate use of pharmaceuticals and the clinical and economic value of pharmaceutical innovation. NPC’s research contributes to the scientific foundation for informed discussions about health care access, coverage, appropriate use and value.