Posted by on in Biopharma, Payers, Population Health

Summary Drug companies are naturally incentivized to price their drugs under assumptions of optimal clinical value, i.e. as high as possible.  Payers react to this by setting stringent conditions for patient eligibility for coverage of those therapies. As a consequence, patients who do not meet these conditions do not receive those drugs even though they could derive benefit, albeit not of a magnitude that would justify the cost.  Here we lay out a population health based scheme by which payers and drug companies can design a system that ensures access to a drug to a larger group who could benefit… Read More

Posted by on in Biopharma

The public debate on drug pricing has sharpened markedly over the past year. We are seeing more political scrutiny and media coverage, including the blowback on Mylan’s EpiPen pricing, tweets from now President Trump, as well as an unsuccessful California ballot initiative to force lower drug prices. This is all on top of a backdrop of seemingly ever-increasing coverage of the high costs of new medicines and double-digit price increases. Now market forces may be gearing up: in the past four months, Anthem — one of the “Big 3” payers covering 40 million lives or 1 in 8 Americans– has… Read More

Posted by on in Biopharma, Medical Devices

The recent World Medical Innovation Forum on Cancer convened by Partners Healthcare in Boston was attended by leaders in oncology from around the world including top: clinicians, bench scientists, policy leaders, and executives from hospitals and life-science companies.  Two plus days of intense discussion and sharing of perspectives ably curated by Partners Innovation head Chris Coburn covered a range of topics from technology developments, to the healthcare system, and the patient/ doctor perspectives. The mind-map below is an attempt to organize the key themes that I heard through the conference and to try to convey why I came away feeling incredibly optimistic about the future of cancer care. The… Read More

Posted by on in Biopharma, Payers, Population Health, Providers

A couple of years ago, we addressed the question of whether drug companies could use new business models to capture more of the value they create. At the time, we pointed out that drug makers had struggled to get payers interested in new models, and that any potential solution would need to consider aspects of the drug (as it relates to the overall care paradigm and system), and of the payer. Fast forward to 2016, and there are a number of factors that suggest that now may be the right time for drug makers and payers to partner in creating value by sharing clinical and… Read More

Posted by on in Agile Strategy, Biopharma, Consumer Health, Digital Health, Payers, Providers

“Agile corporate strategy” (as defined in a previous post) is already the established the weapon of choice for small, early-stage innovators trying to re-invent their marketplace, where the product is the company and uncertainty is the hallmark new emerging markets.  Startups like agile strategies – often referred to a “Lean Startup” – because they effectively counter the scale advantage of incumbent competitors without requiring massive initial investment.  But contrary to the conventional wisdom that firms must abandon agility as they get larger and more complex, in the right market context an agile business unit or corporate strategy remains… Read More

Posted by on in Biopharma

Ezekiel Emanuel wrote an op-ed in the New York Times last month, which highlighted the low number of new antibiotics that have been brought to market in the past two decades. Antibiotics are a unique market compared to therapeutics for other diseases. Infectious disease clinicians prefer to use innovative new products as a last line of defense against highly resistant infections, relying on tried-and-true antibiotics as their primary options. Paradoxically, the “reward” for being a highly innovative, effective new antibiotic is to be sparsely used. Emanuel points out this conundrum while also highlighting the concurrent resistance to high prices, leading… Read More

Posted by on in Biopharma, Payers

In this morning’s New York Times (June 3,2014), Andrew Ross Sorkin asks,“DO drug companies make drugs, OR money”? That’s a fair question in the context of what I’ll call a “fee-for-product” reimbursement regime. Another way to look at this question is, “CAN drug companies make drugs, AND money”? Value has not been an easy sell As the U.S. healthcare services system moves from fee-for-service to a value-based system, the biotech and pharmaceutical (biopharma) industry should have an opportunity to capture more of the value it creates. But with drug costs only ~10% of overall health spending and not… Read More