The 2014 Atlanta Summit - - The Business Case for Public Health

CDC Scope and Impact

• Tuberculosis, the leading cause of U.S. death 100 years ago, was eliminated by the 1970s; HIV is now treated as a chronic disease following early predictions that it would claim 20% of the population.
• Tobacco causes 440,000 deaths annually in the U.S., representing the number one cause of preventable death.
• CDC economic assessments often underestimate costs by failing to capture emotional impact on families and workplace productivity losses.
• The agency's primary goal is saving lives, with success measured by the quantity of lives saved.

PepsiCo: Corporate Mission and Health Strategy

• PepsiCo reached 1.3 billion consumers daily, roughly one in six humans, creating a critical intersection between corporate reach and public health.
• The company identified a global paradox of 1 billion overweight individuals and 1 billion hungry individuals as a key opportunity for industry transformation.
• PepsiCo increased its R&D budget by 50% over the last five years to address global food security and stability.
• Since 2006, PepsiCo removed 3,400 tons of sugar from U.S. beverages without changing consumer perception, shifting its portfolio from 10% low/no-sugar drinks to 50%.
• The company faces a logistical challenge where 40% of the global fruit and vegetable supply rots post-harvest due to distribution failures.
• Cultural relevance is a strategic constraint, requiring 200-country specific diet formulations rather than a single global product.

Biotech Investment and Venture Capital Landscape (Fidelity)

• Biotech is characterized as a high-risk sector where 9 out of 10 new companies fail due to scientific uncertainty, regulatory hurdles, and development costs in the hundreds of millions.
• Successful biotech breakthroughs can yield monopolistic products with patent protection lasting 15 to 20 years.
• The cost of genomics has plummeted from millions to a few hundred dollars, accelerating scientific discovery.
• Approximately 6,000 diseases now have a known molecular basis, yet only about 250 treatments exist.
• Fidelity's biotech assets grew from $1 billion to $10 billion, with generalized fund holdings exceeding $50 billion.
• The industry faces a capital crunch as major pharmaceutical companies shift to cost-cutting modes due to patent expirations, creating a funding gap for innovation.
• Morris Hilleman, a Merck scientist, developed 8 of the 14 routine childhood vaccines, saving an estimated 9 million lives.

Safeway: Employee Health and Cost Reduction Model

• Safeway faced a healthcare bill of $1 billion in 2005, rising by $100 million annually, prompting a strategic pivot to health management.
• 74% of healthcare costs are driven by chronic, behavior-related conditions, which became the primary focus of the intervention.
• Over two years, 73% of employees who failed blood pressure standards subsequently passed; 45% of those failing glucose tests passed; and 43% of those failing cholesterol tests passed.
• 35% of employees quit smoking after incentives were introduced, and overall obesity rates dropped by 21% under Safeway's voluntary program.
• Safeway reduced its healthcare costs from $1 billion to $850 million over eight years by implementing outcome-based biometric standards.
• The company successfully lobbied for regulations allowing premium differentials of up to 50% based on biometric standards, provided a pathway to earn back the savings.
• A cancer concierge service, financed at UCSF, was established to provide coordinated care for employees, resulting in 85% workforce participation in health initiatives.
• The company raised over $200 million for cancer research through check-stand donations, averaging $2 per transaction at a cost of six cents per transaction.

Pharmaceutical Industry and Ecosystem Collaboration

• The pharmaceutical sector has shifted from a reputation for high pricing to a focus on meaningful patient outcomes, driven by economic recession and market alignment.
• Collaboration is now deemed essential due to the inability of individual entities to fund the entire biomedical innovation ecosystem.
• The industry recognizes a need to support the high-risk, high-failure rate startups (95-99% failure rate) that generate future breakthroughs.
• Merck is no longer the sole leader in science spending; new leadership from biotech firms like Celgene indicates a changing dynamic.
• Academic centers are being leveraged to spawn small biotech companies, with corporate partners (e.g., Eli Lilly, Fidelity, GE) providing sponsorship models.
• New funding mechanisms include securitizing future royalties from collaborations between institutions and corporations to bypass traditional funding crises.

CDC Partnerships and Public Health Initiatives

• Chronic diseases drive $2.8 trillion in U.S. healthcare costs, with 75% of that expenditure related to lifestyle factors.
• CDC collaborates with businesses on programs like the School Health Index, requiring 600 elementary schools to complete evidence-based evaluations for grant eligibility.
• The CDC's TIPS campaign utilized graphic ads featuring a laryngeal cancer survivor to encourage smoking cessation; a viewer, Leisha Hancock, quit a 20-year smoking habit after seeing the ad.
• CDC protocols can reduce hospital transmission of blood-related diseases by 70%.
• Partnerships with companies like Cargill are used to fund mini-grants for schools to implement health indices.
• The CDC is moving toward an "ecosystem" approach, acting as a gateway to health by empowering communities, businesses, and academia rather than operating as a standalone entity.
• The agency faces daily operational threats ranging from anthrax (white powder incidents) to the obesity epidemic, requiring constant creativity and cross-sector collaboration.