Drug industry must tell story better, say biotech conference expertsBy Ed Finkel
4/1/2005 - The pharmaceutical industry is a “high-risk, high-reward” business that must tell its story better to win over skeptics, said Mark Booth ’97, president of Takeda Pharmaceuticals North America, during his keynote address at the 5th annual Kellogg Biotechnology Conference 2005.
"Our companies are based on innovation. That’s the value,” Booth told several hundred attendees at the conference, titled, “Transforming the Face of Healthcare,” held April 16 at the Kellogg School’s Donald P. Jacobs Center. “If we take away the reward, nobody’s going to want to take the risk — and that would be a tragedy.”
To pursue its rewards, Lincolnshire, Ill.-based Takeda works to develop differentiated products that address unmet needs, enters into partnerships and occasionally acquisitions, and sees its people and corporate culture as a competitive advantage, said Booth, a graduate of the Kellogg School Executive MBA program.
"They are a ton of work,” he said of partnerships. “And when they go bad, they go real bad. But when you do them right, we feel they’re a win-win.” He added that employee satisfaction is a “standing agenda item” during the company’s weekly executive meeting; and a 2004 survey to which 87 percent of employees responded gave Takeda a 4.4 rating out of 5 for overall satisfaction. “We’re not satisfied,” he said. “We’d like it to be a 5.”
To boost the overall public’s satisfaction with the company and its industry, Takeda emphasizes corporate social responsibility through issues such as access and affordability, Booth said, pointing to the recently created Together Rx program that pulls together all drug purchase assistance programs into a “one-stop shop” for the needy.
"We have to be very aggressive in telling our story,” he said of the industry. When questioned by a conference attendee about why Together Rx had not existed until recently, he added, “A lot of those programs have been ongoing. One-stop shopping, you’re right, that should have been done years ago.”
While some have predicted great benefits to the drug industry from the Medicare Modernization Act when its prescription provisions kick in next year, it will have “only a small, incremental benefit” and “within a couple years will have a fairly serious negative impact,” predicted a panelist during a morning session on rising healthcare costs.
"The Medicare Modernization Act is doomed for failure. It’s one of the worst pieces of legislation I’ve ever seen,” said Robert Freeman, an industry consultant who formerly worked for AstraZeneca. “It will collapse under its own weight.”
One way to constrain the growth of drug costs, which hit $192 billion in 2002, would be for payers to invest more in prevention — but that’s unlikely under the current employer-based model of health insurance, since job changes also lead to changes in carriers, removing the payer’s incentive, said panelist Scott Streator, director of healthcare for the Ohio Public Employees Retirement System, which does have such an incentive since the retirees it insures won’t be switching carriers.
"Payers have insulated consumers through co-pays,” Streator said. "[Consumers] expect a lot without taking responsibility.” And with top drugs rising in cost at 2 to 3 times the Consumer Price Index, even Streator’s more prevention-oriented organization is falling behind. “We’re out of money in 18 years, and we’re not alone,” he said.
The current system of paying for prescription costs is unsustainable, agreed Susan Nedza ’01, chief medical officer for the Chicago office of the Centers for Medicare and Medicaid Services. “The push-back to the Clinton plan was that people didn’t want to see that change,” she said. “But we’re in a different time now. We’re about to face our largest demographic challenge as a nation” when Baby Boomers retire.
When an attendee asked why prescription drugs are so much more expensive in the United States than in other countries, Nedza had two answers: other countries have closed systems with price controls, and “the insatiable demand in the U.S. is a social discussion that will have to take place.”
Additional panel discussions considered various topics of interest to the healthcare industry, including: stem cell research, intellectual property rights, outsourcing, medical devices and social responsibility. Ezekiel Emanuel, M.D, chair of the department of clinical bioethics at the National Institutes of Health delivered the afternoon’s keynote address.
Dr. Emanuel spoke on the subject of reevaluating national healthcare reform, citing problems with the U.S. system such as rising costs, inconsistent quality, and frequent errors. He called the current healthcare system “inequitable, inefficient and increasingly unaffordable” and cited the “erosion of employment-based coverage” as one of the factors contributing to the current challenges facing consumers and employers.
During his presentation, Emanuel defined the American healthcare system as “inherently and irreparably broken,” and suggested that healthcare professionals could expect a “hostile regulatory environment” and cuts in reimbursement.
Possible solutions put forth have included single payer and subsidized plans, each with potential benefits and problems. But Emanuel particularly outlined the case for universal healthcare vouchers, noting that the plan offers universality, fairness, cost control and continuity of coverage and care.