Push for value
Jim Robins
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Looney:
A key driver for the realignment in the business model is the insistence of payers and providers that medicines evidence
real value. There is an important experiment under way in the United Kingdom whereby the government is seeking to clarify
the meaning of "value," as a construct that combines two factors: (1) filling an unmet medical need; and (2) advancing the
science in its respective therapeutic class. Is this effort to define value a good thing or bad?
Robins: It is an appropriate effort if the patient interest is at the center of the decision making process. If austerity is the
primary motivation, then it will discourage innovation. We as an industry must recognize that everyone in the decision chain
wants the most relevant and specific information, more than what has been provided in the past. Industry and payers are seeking
to define the terms of engagement around a medicine's value much earlier in the R&D process. Pharmas must have an informed
understanding of what a payer is willing to pay for a medicine, what outcomes they expect, and what relevant comparators they
want to see in our study trials.
Robert Bedford, BulletinHealthcare: The push to prove value is not entirely negative. It exists as a source of discipline—a Darwinian approach. New ideas can
spring from austerity. For example, is there a better way to reach physicians when market forces and common sense can no longer
accommodate a huge sales force? That question is shaping a lot of the interest in mobile apps, social media, and other alternative
non-personal promotional methods.
Ken DePinto, Brand Institute: Payer carping about value is forcing drug companies to confront many practices that were condoned when times were flush.
A good example is the attention now being paid to low rates of patient compliance with medicines. It's an enormous source
of waste—I refer to it as running the air conditioner with the windows open. Yet I rarely see it built into the revenue and
return projections that determine where a company puts its resources.
Flaiz: A larger point is that our models and forecasting tools still rely on assumptions drawn from past experience. We talk about
health outcomes being our focus yet our models are built around traditional financial metrics that cater to the venture capital
community.
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