Population Health: The Call to Community - Pharmaceutical Executive


Population Health: The Call to Community

Pharmaceutical Executive

PE: Will health reform impose any other structural changes to the financing and delivery of care?

Nash: There are several. The first is the transformation of health insurance around a tableau of consumer choice. Health insurance is going to go retail, in a marketplace where consumers will be forced to choose, just like they buy soap. In net terms, I think that's a good change. I am pleased that my company, Humana, is moving in this direction. The second is the trend away from a defined benefit approach to insurance — where plans are managed through employers who contract with insurers to deliver a specified package of benefits – to a defined contribution, where employers offer a lump sum to workers, who are then on their own to shop for cover and contract and spend separately with an insurer. This shifts more of the risk to the consumer, forcing him to actively manage the insurance package, including covered procedures, deductions, and co-pays. Employers gain from this by linking pay to performance and becoming more competitive against countries where benefits are subsidized by third parties or government.

PE: Based on these trends, what will the US health care system look like in 2020?

Nash: I expect in 2020 the system will be fundamentally reordered around the patient, accentuated by this broader "retailization" of health services. In this new world, the biggest competitors to pharma will not be other drug companies, but other health organizations that emphasize this retail experience. Patients are going to have access to an extraordinary amount of information, all of it accessible in real time. Instead of being husbanded by the professional elite, information will be "democratized." Will this shift be seen as beneficial by my 85 year old mother? Probably not. But my two daughters now in their late twenties are going to demand it – to know what care they can get, for how much, and when. And the background color of the web site ought to be pleasing to them as well. On balance, I think this is a good thing. We are already seeing an explosion in new businesses – start-ups – to help consumers make sense of all the new options created by the marriage between data and technology. I just met with a company in Minneapolis, clear.md, which is pioneering the video prescription, reinforced with a direct message from your physician on taking the medicine properly.

PE: Can you identify any "disruptive innovations" that will force big Phama to modify or adapt the way it does business?

Nash: The most disruptive action that a pharma company can take is to trump the competition with new and more effective tools to educate the patient. It's very simple: the most sensible investment is one which will contribute to making patients better consumers of medicine.

A prime example is Sanofi Aventis' partnership to create the glucometer, a simple, pain-free way for diabetics to record their blood sugar. I call it disruptive because it gives power to the patient and takes it away from the physician.

Another form of disruptive innovation is the capacity to build non-traditional partnerships with new actors in the health system. Big Pharma is contracting with a host of different organizations like software firms, retail vendors, consumer-based market research, and health economists. All this is geared to discovering new ways to achieve value. It simply requires a change in mindset. Just consider what can be done when drug companies start valuing the information they possess as a profit center rather than an internal service function.

Some others I can cite stem from the elimination of the cost barrier in establishing the genetic profiles of individual patients. Personalized medicine will finally realize its potential when prescribing is fully matched to your genes. The high cost and risks of clinical trials will come down because sampling will be more precise – instead of testing 1,000 people in a cancer trial, we will need only 100 that can be pre-screened for a specific mutation. You can see: I am optimistic about the future.

William Looney is Pharm Exec's Editor-In-Chief. He can be reached at


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