February 2008, Vol 1, No 1
The Urgency of Health Transformation: Not a Choice, but a Necessity
The area of health and healthcare is one where transformation is not a choice, but a necessity. That reality has been driven home by a number of recent events and ever-growing challenges:
Health and Homeland Security
The launch of American Health & Drug BenefitsTM brings with it the sentinel question: How shall we frame the healthcare debate? The answer we propose involves a vision of how healthcare standards change; who is involved in the process of care; what are their systems, needs, agendas, and incentives; and what are the evidentiary methods proper for determining success or failure.
Election years are always a great time to take our country's pulse with regard to an issue, and this year healthcare has emerged as the major topic on the nation's collective mind. We have enjoyed excellent healthcare in the United States for quite some time, yet today the system seems unstable. Record numbers of uninsured patients populate our delivery system during an era in which few would argue that access to insurance coverage is equivalent to access to good healthcare.
Robert Henry: At a recent Institute of Medicine annual meeting, Elliott Fisher of Dartmouth quoted Uwe Rhinehart something that you had discussed in the book you co-authored with Alice Rivlin, Restoring Fiscal Sanity 2007: The Health Spending Challenge. You make the point that the same level of care or the same procedure provided in 2 different locations in the United States can vary dramatically in price (even twice as much or more).
Like the everyday person, defining value for a payor of healthcare services varies depending on your perspective and application of the meaning. For a patient or employee, value means there is some worth in the usefulness of the subject or importance to possessing it. To a clinician, value relates to a standard of quality or a principle that is not only worthwhile, but also desirable. For an attorney, value is defined in contractual terms connoting an economic exchange or equivalence in goods or services.
Value-Based Drug Benefit: Implications for Manufacturers
The data regarding healthcare costs are clear, persistent, troubling at the least, and truly frightening at worst. It is estimated that by 2014, nearly 20% of the nation's economy will be consumed by healthcare, and the growth in healthcare spending will outpace economic growth through the next decade.1 The National Institutes of Health estimated that the overall cost of cancer in 2006 was $206.3 billion. Of this total figure, $78.5 billion represents direct medical costs, including inpatient and outpatient care, drugs, and devices.2
Although improving survival remains a key target for much of drug development, finding new treatments that improve how the patient feels or functions is an increasingly important goal. Even treatments that improve survival may be differentiated by how much they improve functionality or health-related quality of life (HRQOL), or may be of limited value if they significantly diminish either one. Thus, these outcomes can be an important gauge of the role of new medicines in the treatment process for many diseases and patients.
Even the most casual observer of the pharmaceutical and biotechnology industries will have noticed that in 2007, the U.S. Food and Drug Administration (FDA) issued an overwhelming number of approvable letters and a corresponding underwhelming number of approval letters for new product applications. In fact, according to a recent publication by Sagient Research, the number of approvals fell by 13% from 2006, while the number of approvable letters increased by 40%.
The 2007 Pharmaceutical and Biotech Pipeline Year-End Summary: What it Says About the State of the Art of Discovery & Development
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