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Lead, Follow, or Get Out of the Way


Pharmaceutical Executive

Pharmaceutical ExecutivePharmaceutical Executive-07-03-2007
Volume 0
Issue 0

If pharma is seen as a genuine contributor to the policy debate on comparative effectiveness, it could influence funding, pricing, and coverage decisions

There are forces transforming the healthcare system—forces I think of as powerful trains coming down the track. Most attempts to stop them will be futile, so the only choice pharma companies are left with, as Lee Iacocca used to say in his Chrysler advertisements, is to "lead, follow, or get out of the way." To "just say no" is not a viable option.

Humphrey Taylor

When it comes to healthcare reform, pharma is sometimes its own worst enemy. A friend of mine in the industry put it this way: "We seldom pay attention to health policy until there is a crisis, and then it is too late. Too often our leaders seem to think that the best course is to do nothing." There may be times when doing nothing is a good strategy—but this is not one of them.

Most of the unstoppable trains that will transform the healthcare system over the next decade are very familiar—evidence-based medicine, quality measures, pay-for-performance, price transparency, electronic health records and other health-information technology, genomics, and new medical technologies. There's now much talk of a comparative-effectiveness (CE) board to consider the cost-effectiveness of different treatments, diagnostics, and procedures. And there's the growth of high-deductible health plans. I doubt these are passing fads.

Advocates of these new developments argue persuasively that they will improve the quality, efficiency, and cost-effectiveness of medical care. However, many people in the industry are nervous that they'll be used to beat up the industry and force it to lower prices. They fear that:

  • As David L. Sackett put it in his 1996 British Medical Journal article, "evidence-based medicine will be hijacked by purchasers and managers to cut the cost of healthcare."

  • The cost of drugs will be viewed separately from the total cost of care.

  • "Cost-effectiveness" will in practice be defined as containing drug costs.

  • The pressures to repeal the noninterference clause—and to move Medicare Part D drug prices closer to the VA pricing model—will grow.

  • There will be mandated head-to-head trials.

  • There will be new measures designed to cut back off-label prescribing.

  • More countries will break, or threaten to break, patents protecting intellectual property rights to lower the cost of drugs.

Let's consider the issue of cost-effectiveness. At a comparative-effectiveness forum last November, there was a consensus that a CE board will form to review, fund, and conduct studies. The additional value of the board would come from disseminating its findings and coordinating efforts to integrate these findings into practice.

How should pharma companies react to this concept? They could oppose it ("just say no"). Or, they could support it with enthusiasm and play a leadership role in shaping and designing it. Many other players will want to have a voice in shaping this CE board. If the pharmaceutical industry is seen as a genuine contributor to the policy debate, it could exert substantial influence on many of the details. How will it be funded? What organizations can influence or control it? What is the involvement of CMS, FDA, the private sector? How much independence will it have? How much power will it have? What role will it have in relation to the development of clinical guidelines? Will it make coverage decisions? Will it get involved in price negotiations?

It is possible that a CE board would provide an opportunity for the industry to demonstrate the value of its products, in both financial and human terms. On the other hand, such a board focused mainly on drug prices could not only damage the profitability of the industry but ultimately limit public access to new and innovative, but expensive, drugs.

If I had figured out how the pharma industry should play all its cards, I would be a very highly paid consultant. But what I do know is that companies should see this as an opportunity to be seized—to help drive the train rather than to throw itself on the tracks.

Humphrey Taylor is chairman of the Harris Poll, Harris Interactive. He can be reached at htaylor@harrisinteractive.com

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