The Learning Curve - Pharmaceutical Executive


The Learning Curve

Pharmaceutical Executive

Reform redux

Looney: Is US health reform—the Affordable Care Act approved by Congress in March 2010—a real game changer in how the industry grapples with the issues of delivery and value we have been discussing so far?

Flaiz: I don't see it as a revolution. The law impacts the commercial insurance model, not how healthcare is delivered. We will see a potentially large increase in the insured population.

Jarmuz: Reform has exposed the large excess capacity in the health system and hence there is a rush to consolidate to become more competitive and efficient. In addition, to better manage risk and bring more value to patients, there will be acceleration in the development of Integrated Delivery Networks or more comprehensive systems of care.

Truitt: More people in the system means stretched budgets and rising outlays for care. The response over time is likely to be a transition to the Veterans Administration [VA] procurement model: send in your bids and the winner takes all. Of course, this will have an adverse impact on margins. So one of the scenarios we are looking at is the cash market for medicines, where you dilute the impact of government reimbursement by asking some patients to pay most or all of the cost of a new drug, out of pocket. This is the case in China. There is a choice between listing on the essential drug formulary or taking your chances on patients with the means to pay on the cash market—culturally that is still acceptable in China, but here it may be different. Nevertheless, there is a complementary trend toward "concierge medicine," where physicians elect to limit the number of patients they see in return for charging rates higher than provided through group insurance plans. It's something that at least has to be considered.

DePinto: It's rash to be complacent about anything related to reform. The scenarios are endless because the legislation emerged from a very partisan political process, which may affect how the Supreme Court rules on the constitutionality question. And we still have a disenfranchised healthcare system. I was a stone's throw from the White House where I was witness to any number of homeless people, all smoking cigarettes. Their problems are not being addressed.

Bedford: Putting aside the politics of reform, we know that half of the spending on Medicare and Medicaid is for chronic conditions related to obesity. This is the biggest unmet medical need and it cannot be resolved solely by administering a drug.


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