How are the values of healthcare
technologies being measured
against the initial costs?
Peter Pitts: In;1950,;Americans
income on health care. Today the
economist N. Gregory Mankiw,
“many pundits take the increasing
cost as evidence that the system
expenditures could just as well be
a symptom of success.” And he hits
a home run with a clear, concise,
and common sense explanation.
“The reason Americans spend
more than their grandparents did
is not waste, fraud and abuse, but
advances in medical technology
and growth in incomes. Medical
science has consistently found new
ways to extend and improve lives.
Wonderful as they are, they do not
come cheap.” When it comes to
health care reform, this is not even
the end of the beginning. We need
to keep our eye on the prize, innovation that focuses on creating
a chronic health care culture that
embraces prevention and prophylactic care. We will not survive as
a nation of obese, hypertensive
diabetics. Rather than wasting
time on beltway spin, redoubling
our efforts on innovation is far
preferable. New treatments are a
bargain. Disease is always much
Matt Wallach: True. Innovation
drives cost down. In healthcare,
sometimes innovation tends to
push direct costs higher in the
short term, but with longer term
savings measured over years. For
example, the approval of Sovaldi,
the breakthrough cure for Hepa-
titis C, caused healthcare costs to
soar for payers everywhere, caus-
ing budget shortfalls and harsh
headlines about drug pricing.
However, billions of dollars will
be saved for decades due to the
fact that millions of people will
be able to avoid liver failure and
other serious complications from
the disease, not to mention the
improved quality of life that comes
with the irradiation of this terrible condition. In today’s political
climate, there will continue to be
pressure on anything that drives
up near term costs, but we must
not lose the innovation that strives
to improve health for all of us.
Ben Locwin: Not very well, on average. I recently was co-author of
a textbook about developability of
biotherapeutics, and in it there is a
substantial body of very advanced
thinking about in silico models for
appraising risk and likely effectiveness of new candidate therapies.
Almost none of this type of next-generational thinking is robustly
applied to the question of the value
derived from new healthcare technologies, especially in the context
only start working when technologies actually pass a certain threshold of market penetration.
Are most of the initiatives
about keeping down costs for
companies, or are savings truly
being passed on to patients?
Ben Locwin: The companies are
generally taking a majority of the
health cost burden, and so pro-
portionally more of the initiatives
are directed at helping companies
absorb this burden—but for sure
there are savings which the patient
dependent upon the conditions
faced by the patients—not every
disorder or disease state has nor-
malized, uniform cost models.
Peter Pitts: Let’s take Pharmacy
example. Donald Trump, Hill-ary;Clinton;and;Bernie;Sanders
all think that health care is too
in the wrong places for savings.
largest pharmacy benefit manager,
million every week.
PBMs;can;afford;such;rich;com-pensation because they increasingly refuse to pay for patients’
medicines. This year, Express
refusing to cover specialized drugs,
Express Scripts and CVS Care-mark aren’t just denying patients
access to lifesaving medication.
They’re also driving up health care
large discounts from pharmaceutical manufacturers. Their profit
comes from pocketing double digit
rebates they extract from drug
makers that they don’t pass on to