Innovative Medicines Deserve an Innovative Payment System

Over the past several years, we’ve witnessed an unprecedented pace of innovation which has ushered in a new era of medicine. No longer is the word “cure” science fiction. For many patients today with diseases such as Hepatitis C and certain forms of cancer -some of our costliest and most challenging diseases - it is a reality. And just as biopharmaceutical research required new approaches to tackling disease, we need new approaches to how we value and pay for medicines to ensure patients can access the medicines they need, when they need them.

At a recent event convened by The Atlantic, and sponsored by PhRMA as part of its GoBoldly campaign, experts from across the health care system discussed the need to address barriers to patient access and how we can better pay for innovative treatments and cures.

“I think we’re moving toward a value-based, outcomes-based marketplace where the various players in the value chain have to work together and partner,” said Jamey Millar, senior vice president of Managed Markets and Government Affairs at GlaxoSmithKline. Millar was joined by a diverse range of health care stakeholders including U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb and Mark Fendrick of the Center for Value-Based Insurance Design at the University of Michigan, among others.

As new medicines have evolved, the way we measure value must also advance to better consider the outcomes most important to patients.

Eleanor Perfetto of the National Health Council and Leah McCormick Howard from the National Psoriasis Foundation agreed that the movement towards value-driven care should focus on patients. “We’re still doing things the way we used to, but we have all these new therapies…if all the stakeholders in the health care ecosystem could truly understand what being patient-centered is and act on it, that could make an incredible difference,” said Perfetto. Howard further noted, “everyone needs to be willing to come to the table. We do a lot of talking about patients without actually including the patients.”

And having a payment system better aligned with patient needs means removing barriers to their ability to access care, including by improving insurance benefit design. As Mark Fendrick noted, “how about instead of having these blunt instruments like deductible, we have a benefit design that makes it easy for patients to do the things that will keep them healthy.”

But as Commissioner Scott Gottlieb pointed out, efforts to improve patient affordability and access must not threaten incentives for future innovation: “I believe in market-based pricing for new drugs, I think it’s the best way to get capital into this space. These are high-risk endeavors and they require a lot of upfront capital. There’s a big-time cost of capital and a lot of risk to these investments that are being made, so we need to make sure there’s adequate returns on success.”