Over the years, this blog has concentrated primarily on how healthcare is being changed by technology. There are two tectonic forces that we believe are changing healthcare today and they are: digitization of healthcare and consumerism. This combination, driven by the force of three technology savvy generations, is in fact the only thing that will change healthcare. This change has begun and we will continue to see it transform over the next five to seven years, something that has not happened in over 70 years of conversation about healthcare reform.
We have discussed prescription drug costs in the U.S. many times and yet, here we are again. Recently, President Trump released a “Blueprint” to address prescription drug prices in America. The short title of this initiative is “American patients first.” (see the link below)
The Blueprint identifies four key challenges that are affecting U.S. drug cost:
- The high “list price” for prescription drugs
- The lack of negotiation at federal programs [Medicare and Medicaid]
- The high out-of-pocket cost to consumers
- The disparity of drug prices between the U.S. and other developed countries
In summary, the plan is well-intentioned; however, it lacks imagination; we will discuss this further in subsequent blogs.
Some of the actions are directed to the U.S. Food and Drug Administration [FDA] and how it impedes generic drugs from entering the market, bio similar compounds, and market exclusivity.
The proposal also allows Medicare Part D programs more flexibility and formulary substitution, as well as the ability to negotiate more aggressively with the drug manufacturers.
An expanded Medicare drug pricing dashboard is also to be expected. Additionally, a novel idea requiring drug prices in TV advertising for pharmaceutical drugs.
We believe that material impact in drug costs can be further achieved by transparency. We are talking about transparency at every level of the supply chain. Transparency and comparison at retail pricing, wholesale pricing, and direct to consumer delivery. We also believe that technology has a greater role to play. We believe the modern Pharmacy Benefit Administrator [PBM] model is totally obsolete, mired in conflict, and is helping keep drug prices high.
To make things more interesting and though unrelated, we find it fascinating that the FDA recently announced that it was looking to buy an [EHR] system to track safety, efficacy and interactions of drugs. What an incredible idea!
We delivered a presentation at a Biotech conference back in 2008, where we proposed that the FDA review drugs faster, and then monitor patients on the drugs permanently via integrated EHRs.
With this new proposal, the FDA is asking for $100 million for this initiative. We think that is just a drop in the bucket, both in cost, and the tremendous opportunity this could present.
There has been a great deal of press recently on electronic health record “interoperability,” and we are 100% supportive of the idea; even our own EHR, PWeR was designed for that purpose! A patient centric solution. Imagine if the FDA allowed drugs to enter the marketplace faster, reducing development costs and time. This will potentially save lives and use big data analytics and machine learning to identify actual or even potential problems and solutions faster. We don’t know what we don’t know; however, what we do know is good solutions will avoid bad outcomes. We are effectivity still using a process and systems developed for drug safety and efficacy in the middle of the 20th century.
This great data warehouse could process unrelated diagnosis and symptoms like no other doctor can see or process today. We don’t know all the side effects of all the drugs approved by the FDA today. There is just too much data and most of it is either in the drugs companies research silos, in individual doctors’ papers, or in electronic health records.
Most, if not all, the data exists today; however, is not aggregated for each patient. Most patients have multiple doctors, with multiple EHRs, and the information is never merged and analyzed. We think the time where the center of connectivity will be the consumer is now. We have participated in all segments of healthcare, and from our perspective, we are confident that if we want to impact pricing and quality of healthcare and drug prices, that transparency and technology are the only path.
More on the President’s proposed changes in our next blog.
-Noel J. Guillama, President