Conference Presentation, Panel, Fireside Chat
Can We Afford to Cure Disease?
Milken InstituteCaroline Pearson, Gregg Alton, Peter Bach, Anthony Barrueta, Roy Beveridge, Tony Beretta, Pablo Legoreto
- The government projects prescription drug price increases and spending will align with historical trends, a trajectory dependent on the pharmaceutical innovation pipeline, while uncertainty remains regarding whether current behavioral trends predict future faster growth rates.
- Gilead Sciences aims to replicate hepatitis C success by investing in cures for HIV, hepatitis B, and NASH, and is expected to see reduced patient populations for hepatitis C as treatments roll out, unlike chronic diseases with constant populations.
- Humana projects that 50% of its drug budget will be allocated to specialty drugs consumed by only 1.3% of its population within the next 18 to 20 months, highlighting a shift in spending concentration.
- The VA population is projected to be hepatitis C free by 2020, supported by the expectation that hepatitis C drugs and orphan disease treatments will become generic and cheap over a 10 to 20-year period similar to Lipitor.
- A significant portion of the healthcare payment structure is moving toward value-based relations where providers assume responsibility for care promises, necessitating a shift from paying for volume to paying for results as accountable care organizations expand.
- Current regulatory schemes restrict the transition from per-unit sales to outcome-based purchasing models, and there is uncertainty regarding whether fee-for-service adjustments or performance-based payments will fully replace existing fee schedules.
- Payers anticipate that consumers will increasingly pressure drug pricing by selecting plans offering affordable and valuable treatments, while the industry expects more innovation and value assessment discussions to facilitate better drug development.
- Healthcare spending is currently at 18% of GDP, a level viewed by some as unsustainable and unable to continue rising, prompting concerns that current pricing strategies and acquisition models may drive costs beyond sustainable levels.
- Scrutiny is expected to continue regarding high drug costs relative to benefits, particularly for "me-too" drugs offering marginal improvements, while experts suggest pathways to improve affordability without declaring the system entirely broken.
- Collaboration between the pharmaceutical industry and other healthcare sectors is projected to be necessary to make comprehensive coverage more affordable and prevent imbalance in drug development and pricing models.
- Concerns exist that without adequate compensation mechanisms, companies may lack the profits required to fund research for disease cures, even as value frameworks like those being developed by Faster Cures aim to incorporate patient advocacy organizations.
- Gilead Sciences and other industry players expect that better discussions regarding value assessment will occur to facilitate the development of better drugs, while some express less optimism that performance-based payments will replace traditional fee schedules.