To advance a value-driven care system, we need better information, a focus on outcomes that matter to patients and flexible new approaches to paying for medicines. These themes emerged during Leading on Value, an event convened by The Economist Group, in partnership with PhRMA, which included a cross-section of leaders from government and industry.
“I think part of what's happening at the moment in our industry is that there is an extraordinary amount of innovation advancing very rapidly,” said Robert Bradway, chairman and CEO of Amgen, and this is “making a big difference for patients…what we're seeing is a real revolution in biology.” Olivier Brandicourt, CEO of Sanofi, agreed, noting that “there is a convergence happening in the world of biology and the world of technology that has never happened before.”
Laurie Glimcher, president and CEO of Dana-Farber Cancer Institute, added that these scientific breakthroughs are changing the outlook for many patients with challenging diseases. “These are drugs that actually have an enormous impact on patient lives. You can turn some cancers into manageable diseases that people can live with.”
And as Seema Verma, administrator for the Centers for Medicare and Medicaid Services (CMS), pointed out, this has required revisiting how we approach payment. “Some of these drugs are one-time therapies or curative therapies…or they're designed for a very small population. So I think in those areas, we really need to start thinking about different ways of paying for these drugs.”
For several years now, biopharmaceutical companies and payers have been doing just that, working together to advance new payment models for innovative medicines, including value-based contracts, which have grown considerably in number and scale. As Bradway noted, the industry is moving away from a system in which “we get reimbursed for every pill that you buy to a world where we get paid for performance.”
Former CMS acting administrator Leslie Norwalk said she believes value-based contracting can drive real improvements to the U.S. health care system. “The benefit of a value-based payment approach is that you…can provide treatments that make the most sense for both the patient, in terms of getting the highest quality, as well as the taxpayer, in terms of paying less for costs.”
And ensuring these innovative agreements are able to flourish requires refining how we assess value. “You can't just stop at something that's high cost,” said Harvard Pilgrim Health Care President and CEO Michael Carson. “If a high-cost drug comes to market and it really helps reduce unnecessary E.R. visits or unnecessary hospital admissions, that's great.” Johns Hopkins Hospital President Redonda Miller agreed, noting that “we need as a country, working in partnership with our payers, to really focus on how to define value in a different way that's more meaningful.”
Ultimately, as Bradway concluded, our challenge is to make sure patients can access the new era of medicine. “There is great innovation and we live in a society that wants access to it. And I think our responsibility is to try to find a way to thread that needle.”
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