Many have argued that health care reform in the US is a significant threat to pharma, largely due to the expectation that health care reform will certainly equate to some form of price control by the government that will dramatically reduce reimbursement for pharma products.  For many years, the public has railed over the price of pharma products in the US, comparing pricing here to that in many other countries where price controls exist and blaming the pharmaceutical industry for gouging the US consumer.  Needless to say, this has tainted the industry’s image in spite of the dramatic advances that the industry has made in saving lives, reducing the need for surgical intervention and improving quality of life in so many diseases.  Personally, I have spent many hours explaining the global pricing disparities to family and non-pharma friends who generally believe that pharma should just stop selling their products in countries that control pricing, so that we can level the playing field and moderate prices in the US!  Aaaah, if only it were so simple!

Now we have some very interesting data reported today from the Business Roundtable that quantifies this lack of a level playing field. According to the Business Roundtable Health Care Value Comparability Study, a new measure of the cost and performance of the U.S. health care system relative to our competitors’ systems, the workers and employers in the United States face a 23 percent value gap relative to Canada, Japan, Germany, the UK and France and a 46 percent value gap compared with China, Brazil and India. In other words, these countries spend less per capita on health care and yet they receive better care than US patients. The complete report can be reviewed here: www.businessroundtable.org

Now, the more analytically inclined amongst us could probably point out the limitations of the source data which the authors also acknowledge and have attempted to address. And there is no assessment of the relative contributions of drug pricing v. other healthcare costs in this study. What I find encouraging is that the debate over the last several years has moved from the cost of drugs to the cost of healthcare. Moreover, the perception is moving from “you get what you pay for”, along with a US-centric attitude that we have all the answers, to a more scientific assessment of value and acknowledgment that perhaps we could learn from others. This seems to be a healthier situation to me…pun intended!

As a scientist by training, I am always encouraged when data-based decision-making becomes more accepted than ideological arguments. Having said this, the mantra of “you get what you measure” is nowhere more true than in healthcare decision-making and outcomes measurement. And expertise in the realm of healthcare outcomes, particularly as it relates to pharma products, has been nurtured and grown in the pharmaceutical industry for over two decades.

Here is an example where data prevailed…Sutent. As reported this week on Bloomberg, Pfizer gave away $3.5 million of Sutent over two years to patients in the UK to make the case for cost effectiveness with the U.K.’s National Institute for Clinical Excellence (NICE). That helped build evidence that the drug worked and created an outcry to reconsider the decision that the treatment was not cost effective. Pfizer also agreed to pay for the initial course of treatment, to make the case for NICE to reverse its earlier decision.

Now, one could argue that this is simply a case of government price controls. However, considering that US incentives to reimburse and prescribe branded products are often driven by share of voice (marketing and sales activity) and market share-based incentive contracts with for-profit insurers and managed care organizations, perhaps more focus on health care outcomes isn’t such a bad thing.

So, I am actually encouraged to see a focus on global measures of healthcare outcomes and a geographically global playing field as we enter the health care reform debate. If you fundamentally believe (based on data, of course!!) that pharmaceutical innovation delivers improved health care, then I believe you must conclude that the pharma industry will survive and thrive in the post-reform era. The industry will surely change in many ways, but this change will be healthy and the US has the opportunity to regain leadership in this arena, if we have the political will to make it happen!

OK, so let the debate begin! I am sure that many will disagree with my point of view as change in our health care system will be painful for many participants in the system.

What do you think will disappear in Pharma with health care reform? And what do you think will be strengthened? Who will be the arbiter of $1.1 billion in comparator effectiveness trials included in the stimulus bill? What will/should be the role of FDA?