Government Calling Out the Drug Industry for Being Too Conservative?

Government Calling Out the Drug Industry for Being Too Conservative?

On his way out the door, outgoing FDA Commissioner Scott Gottlieb writes a memo issuing a challenge to pharma: be more innovative. More specifically, he calls out the subsystem of CROs and other vendors to design new business models that are compatible with disruptive thinking.

He writes:

Efforts to streamline medical product development based on advancing science can be frustrated by legacy business models that discourage collaboration and data sharing, and the adoption of disruptive technologies that make clinical research more effective. Without a more agile clinical research enterprise capable of testing more therapies or combinations of therapies against an expanding array of targets more efficiently and at lower total cost, important therapeutic opportunities may be delayed or discarded because we can’t afford to run trials needed to validate them.

“Unfortunately, we’ve seen a continued reluctance to adopt innovative approaches,” he noted. New forms of collaboration are part of this story.

New research paradigms are needed to break down barriers between real world data and clinical research, so that evidence can be shared rapidly to improve both domains across a learning health care system. In some cases, the business model adopted by the clinical trial establishment just isn’t compatible with the kind of positive but disruptive changes that certain innovations can enable.

Which only underscores the why for a whole new innovation agenda in healthcare, the kind of systemic vision for transformation framed most recently by Kevin Schulman, Professor of Medicine at Stanford University, and Barak Richman, Professor at Duke Law School, in the New England Journal of Medicine earlier this year: “Toward an Effective Innovation Agenda.”

If you have government asking for disruption from industry, then you know we really have entered a whole new era.

Quoting Hunter S. Thompson: “When the going gets weird, the weird turn pro.”

Recidivism as an Outcomes Measure

Comment

Recidivism as an Outcomes Measure

Competing on outcomes happens at a system level. Increasingly, it’s becoming a ‘winner-take-all’ game.

In the RFPs for Netflix subscription models to pay for hepatitis C drugs, states of Washington and Louisana are both looking for the winning bid to include support and education for their prison populations.

Which opens space for value innovation in “correctional health care.” This is a subsystem of markets comprised of outsourced, for-profit contracts for about 70 percent of prison care in the United States. The two largest providers of prison health — CorizonHealth and Wellpath — are responsible for the care of about 400,000 people on a day-to-day basis.

Can Gilead Sciences, AbbVie or Merck apply what they know about discharge planning to reduce rates of reincarceration? Can that social impact be used as an outcome measure to differentiate beyond drug price?

PhRMA was once a heroic industry, doing miracles with science. With some strategic imagination, and a re-allocation of resources and mindset, it still can be.

Comment

On Innovation Stagnation in Healthcare

Comment

On Innovation Stagnation in Healthcare

Recent techno-enthusiasm aside (e.g., #HIMSS19), we're living in a time of innovation stagnation.

If you step back and take a broad view, nothing much is really "transforming" healthcare’s systemic performance declines. We're distracted by the theater of the latest "useful" feature, but digital + drug discovery = status quo.

Pilotitis dominates and provides cover.

We're funneling our creativity into areas that produce niche impacts. So a tech start-up has a greater prospect of riches if it creates a new social networking app than if it launches a new model for, say, mass transit.

Peter Thiel, co-founder of PayPal, believes the greatest threat to growth in America is a culture that embraces conformity. He says: “I worry that the conformity problem is worse today than it was in the ‘50s. Our culture does not want change; it does not want progress.”

Writing in Health Affairs this month, Alfred B. Engelberg attributes the cause of high drug prices to a shortfall in innovation at a system level. The path forward is a new market where competition is based on outcomes. He says:

“The price of a drug should reflect its value. If a new drug lacks a meaningful clinical advantage it is not entitled to a higher price than the existing medicine. If it does offer a clinical advantage, the value of that advantage can be quantified. Value-based pricing is the core principle employed by other developed countries in negotiating drug prices and is the reason why their per capita drug spending is so much lower.”

Innovation begets disruption, and disruption requires pivoting to a new set of norms and institutional frameworks.

For the pharmaceutical industry -- and the entire subsystem of vendors, services, agencies and advisors who are paid to guide and operationalize its plans -- this means developing a new market positioned on health system value, not technical merits of "drug" in isolation from its environment.

Comment

Who Transforms the Transformers?

Comment

Who Transforms the Transformers?

Continuing a thread on innovation stagnation in healthcare, New England Journal of Medicine today published a call for a whole new approach (“Toward an Effective Innovation Agenda”).

Authors Kevin Schulman of Stanford University School of Medicine and Barak Richman of Duke University School of Law, ask:

  • “Why have well-intended efforts to adopt digital technologies had so little systemic impact as compared with those in other industries?”

  • “Why have investments in digital technologies largely failed to lead to meaningful improvements along the axes of health care’s quadruple aim?”

Somewhere around $1 trillion is being spent (misspent?) on digital technologies sold with a promise to “optimize” or “disrupt” healthcare, yet outcomes from the system as a whole remain essentially untouched. Care patterns and unsustainable cost trajectories haven’t changed in the past 20 years. We are in the 50th year of an official “crisis.” Around 90 percent of “digital transformations” fail.

We need new words to think new thoughts. Healthcare isn’t technology; technology isn’t innovation.

It’s about the outcomes, stupid.

Comment