Guest Columnist
Health Care Reform - Innovation is a Must
By
Dec 22, 2009 - 11:00:27 AM

(HealthNewsDigest.com) - Asking what healthcare in America is going to look like in 2010 is like asking who is going to win the World Series next fall: there are odds-on favorites – but you have to consider the wild card possibilities.

And, when it comes to health care, there seems to be nothing but wild cards. From “the deal” that Billy Tauzin cut with the White House to the future of follow-on biologics, from the “doc fix” to clinical effectiveness, from closing the doughnut hole to paving a pathway for follow-on biologics, there are enough issues in play to offer at least a dozen plausible scenarios. They’re all interesting and important. But some (in a very Orwellian sense) are more important than others.

The most important is the future of innovation.

Innovation means different things to different people. To me it means either facilitating or frustrating the free market’s desire and ability to advance the public health through investment in new (and expensive science). 2010 will bring the issue of “wither innovation” to the fore. There are five things we must consider as we begin a new decade:

1- Innovation is slow. As any medical scientist will tell you, there are few "Eureka!" moments in health research. Progress comes step-by-step, one incremental innovation at a time. Companies more often profit by improving existing chemicals and making processes more efficient than by revolutionizing the whole field with new products.

2- Innovation is hard. Today it takes about 10,000 new molecules to produce one FDA-approved medicine. And if that's not frightening enough, only three out of 10 new medicines earn back their research and development costs. And here's the kicker -- unlike other R&D-intensive industries, pharmaceutical investments generally must be sustained for more than two decades before the few that make it can generate any profit.

3- Innovation is expensive. In 2003, researchers at Tufts Center for the Study of Drug Development estimated the costs to bring a new medicine to market to be $802 million, and other economists suggest that the total cost is closer to $1.7 billion.

4- Innovation is under attack. From accusations of the “me-too” variety to crackpot schemes to replace pharmaceutical patents with a “prize” system, life for innovator pharmaceutical companies is rough and tough. Israel Makov (formerly the Big Abba of generics giant Teva) once told me that he wasn’t really in the pharmaceutical business, but rather “in the litigation business.”

(P.S.: If we don't think seriously about serious patent reform and towards more robust protection of data exclusivity we are going to seriously jeopardize the potential for new medicines -- at a time when science makes potential breakthroughs tantalizingly close.)

5- But innovation is important – and not just for pharmaceutical industry profits. Increases in life expectancy resulting from better treatment of cardiovascular disease from 1970 to 1990 have been conservatively estimated as bringing benefits worth more than $500 billion a year. In 1974, cardiovascular disease was the cause of 39 percent of all deaths. Today it is about 25 percent. Cerebrovascular diseases were responsible for 11 percent of deaths back then. In 2004 they caused 6.3 percent of deaths. Kidney diseases were linked to 10.4 percent of deaths and now they are associated with 1.8 percent. And that’s just for the United States.

As Harvard University health economist (and Obama healthcare advisor) David Cutler has noted: "The average person aged 45 will live three years longer than he used to solely because medical care for cardiovascular disease has improved. Virtually every study of medical innovation suggests that changes in the nature of medical care over time are clearly worth the cost."

To borrow an over-used adjective from the world of global climate change -- we must protect "sustainable" innovation.

How will 2010 treat innovation? Well, if Congress revokes the Non-Interference Clause and Uncle Sam is allowed to mandate prices for health care services delivered via Medicare and Medicaid (most notably prescription medicines via the Part D drug benefit), then the answer is that 2010 will not be an innovation-friendly year. If, on the other hand, Congress provides a thoughtful pathway to follow-on biologics (as currently exists in both House and Senate legislative language), then it looks considerably more like an innovation-bound 12 months. If health care reform leads to a payer environment that rewards a patient-centered framework, that’s innovation-positive. If, however, health care reform legislation puts us on the path towards a more European cost-over-care model (based on the outdated Quality Adjusted Life Year – QALY – measurement), then medical innovation will be in for a rocky ride. We will face many health care choices in 2010 – and they have significant long-term consequences.

Beyond innovation what else will 2010 have in store for health care? For example what of a more informed digital healthcare consumer and the role social media will play in the first year of the new decade? The uptake of social media as a consumer empowerment tool is, as regulatory cognoscenti understand, as much a factor of industry desire as regulatory oversight. What dictates (if any) will we see from the FDA in 2010?

I predict an agency guidance sometime in late 2010 or early 2011 that focuses on three issues: (1) the range of adverse event reporting responsibility (not a redefinition of what an adverse event is), (2) ways to make MedWatch more visible (even to the degree of mandating prominent display of a MedWatch icon on print and broadcast advertising, promotional materials and, obviously, online) and, (3) the creation of “safe harbor” parameters to allow (and, hopefully, encourage) regulated industry to correct misinformation on the Internet.

Let’s hope for a 2010 that helps to guarantee the future of enhanced access and accelerated approvals. A future where insurance companies cover preexisting conditions and reward their customers for medication compliance, weight loss, smoking cessation, and disease prevention. A future with a national standard for electronic medical records and e-prescribing. A future where the insurance industry offers high quality health policies across state lines to the many millions of previously uncovered Americans at significantly lower costs. A future where physicians are compensated fairly by Medicare and Medicaid. A future where, through enhanced transatlantic regulatory harmonization, there is no “approval gap” for drugs, devices or diagnostics. A future where the only doughnut-hole question we consider is cream-filled or regular.

But let’s remember that the critical battle, the battle for the heart and soul of 21st century health care is the battle over innovation. And nothing short of victory is acceptable.

Peter J. Pitts, a former FDA Associate Commissioner, is Partner/Director of Global Health at Porter Novelli.

Peter Pitts
Partner and Director, Global Health
New York

As a Porter Novelli partner and director of global health care, Peter manages the overall Porter Novelli health care team from the New York office. He works with executive teams globally and in each region to strategize the course of health care growth across the organization, and ensures delivery of Porter Novelli’s value proposition to new and existing clients. Peter also serves as president of the Center for Medicine in the Public Interest, a think tank on public health care policy issues. From 2002 to 2004, he was the FDA’s associate commissioner for external relations. His comments and commentaries on health care policy issues regularly appear in The New York Times, the Los Angeles Times, The Washington Post, The Wall Street Journal, the Financial Times, Health Affairs, The Boston Globe, The Washington Times, the Chicago Tribune, the Chicago Sun Times, The San Francisco Examiner, Investor’s Business Daily, The Baltimore Sun, The Economist, Nature Biotechnology and The Journal of Life Sciences, as well as on BBC, Fox News and The NewsHour with Jim Lehrer, among others. Peter blogs daily at drugwonks.com, where he is read by more than 30,000 visitors every month.

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