When the Payer IS the Player - Pharmaceutical Executive

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When the Payer IS the Player
As Medicare, Medicaid, and the nation's vast web of private payers consolidate and gain market power, how can pharma stay ahead of the cost-containment curve? Pharm Exec hosts a conversation between two experts on each side of the payer and pharma divide


Pharmaceutical Executive


PE: Everyone agrees that healthcare costs in the US are unsustainable, but no stakeholder wants to take a hit. Are we getting any closer to a consensus on cost containment?

JH: In any medical decision, there are always economic arguments. But often these economic drivers are brushed aside as not being relevant on the assumption that the decision should be based entirely on the clinical benefit of a drug. Unfortunately, in cancer, the clinical benefit is something that is often tested in smaller numbers of patients than in other therapeutic areas, so efficacy is harder to generalize to a larger population. There's also the perception that the clock is ticking fast, so you've got to do something for the patient now.

And complicating the cost issue even more, a significant part of the improvements in breast cancer have also been due to the personalization of medicine. For example, doctors have been able to identify, through diagnostic improvements, the tumors that are responsive to Herceptin. And that process has probably had as much of an effect on transforming the disease as the availability of very good agents. But these are not inexpensive diagnostic procedures. Still, payers are generally willing to cover them because there's a significant benefit to being able to treat more patients more effectively and in a more precise manner.

So one question is—and this is an important deliberation by NICE in the UK—if you as a patient fall into the Herceptin-responsive category, should your reimbursement or coverage in advance be different because of the anticipated improved response of Herceptin treatment and, therefore, the anticipated health-economic benefit, compared to a patient in another category? This raises some very challenging ethical situations.

TS: It's important that the US adopt a cooperative approach in order to be successful. A cooperative approach could define the best-practice approach for patients with a certain disease state: a tumor, type of cancer, stage of disease, prognosis.

Now, of course, cost has to come into it at some point, but the danger of using cost as a key determinant of access is the impact that that can have on new innovation. I mean, you just mentioned the progress in the personalization of medicine by means of advanced diagnostics and drugs. It's costly to develop these new technologies.


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