Recently in Healthcare Reform Category

The constant news stories about our sluggish economy, high rate of unemployment and federal budget deficit are enough to make optimists start seeing the world as half empty. Yet amidst all this negative news, some things are actually working well.

Take Medicare Part D. According to the Congressional Budget Office, the program costs 41 percent less than originally projected and several recent studies show that the program is increasing access to medicines while lowering healthcare costs and improving health. You can watch a great new video on the success of Medicare Part D and the following studies provide even more excellent data.

·         A study published in the Journal of the American Medical Association (JAMA) reports that each year Part D prescription drug coverage saves Medicare about $1,200 in lower hospital, nursing home and other medical for each senior who previously lacked comprehensive prescription drug coverage. According to other experts, this equals about $12 billion per year in savings across Medicare.

·         A study by Harvard Medical School researchers published in Health Services Research found that in the 23 states for which the researchers had data, hospitalization rates declined by 4.1 percent, or by 42,000 annual admissions, across 8 conditions that are sensitive to medication adherence such as diabetes, COPD, asthma and acute myocardial infarction (AMI). Researchers concluded that access to prescription coverage under Medicare Part D has had positive clinical benefits, improving beneficiaries' underlying health, and reducing their need for hospital care.

Lawmakers in DC continue to advocate for mandated rebates in Part D as a way to fix our nation's budget deficit. As I noted in an earlier blog post, if the proposal is adopted, premiums are expected to rise for beneficiaries and thousands of high-quality jobs could be lost. Additionally, mandating rebates in Part D would hamper the biopharmaceutical industry's ability to continue investing dollars in the research and development of life-saving and -improving medicines and vaccines.

Medicare cost savings are just one bright spot in our economy.  Research and development of new medicines and vaccines continues to be a collaborative effort between the government and the pharmaceutical industry. In 2009, the private sector invested $65.3B. Another $30.5B was spent by the National Institutes of Health. Cultivating and maintaining an environment in the US that encourages research and development will allow us to remain a leader in medical innovation, and help our nation move forward.

Medicare Part D's competitive, market-based structure is working well--and should be preserved.

Today marks the one year anniversary of the signing of the Patient Protection and Affordable Care Act, more commonly called the Affordable Care Act (ACA) or just simply "healthcare reform."  The legislative path to last year's signing ceremony was perhaps the most politically divisive in decades. As the new law celebrates its first birthday, debate in DC and in state Capitols about the law's merits and flaws is no less acrimonious.

If the political back and forth leaves you with more questions than answers, you are not alone. The Kaiser Family Foundation has been tracking public perception of the law for the last year, and more than half--53% of those surveyed--remain confused about the law. This is only a two percentage point improvement from where people were a year ago. This is understandable because many of the law's provisions haven't taken effect yet, 2014 is when we expect to see major changes, but we do know that some Americans have already benefited from the law.

The Department of Health and Human Services posted information today on HealthCare.gov outlining some of what has happened in the last year. For example, seniors participating in Medicare Part D whose prescriptions fell into the coverage gap (or "doughnut hole") received a $250 rebate check in 2010. Beginning in January of this year, they started receiving a 50% discount from manufactures on all branded medications in the coverage gap. The Centers for Medicare and Medicaid Services published an excellent document called Closing the Coverage Gap that helps explain this new benefit.

Although the biopharmaceutical industry has already begun to face new financial challenges from the ACA's provisions requiring expanded discounts, rebates and fees, the ACA also includes a number of positive provisions that support the tenets of the Triple Solution for a Healthier America.  These provisions, promoting prevention, intervention, and innovation could help move our system in a positive direction in the long-term by reducing overall costs while improving patient outcomes. For example, effective since 2010, all new health plans must provide coverage without cost-sharing for preventive services recommended by the U.S. Preventive Services Task Force such as immunizations and well-child visits. U.S. Secretary for Health and Human Services Kathleen Sebelius and Assistant Secretary for Health Howard Kohn nicely detailed all the ACA's prevention provisions in a recent New England Journal of Medicine article.  

At this one year anniversary, it's still very early in the life of the ACA and a long road of implementation is ahead. Change of any kind always comes with some upsides and some downsides. Hopefully in the long-run the upsides will prevail and the law will be successful in increasing access to high-quality, affordable health care coverage and services for millions of Americans. Stay tuned.

Today, GSK's Jack Bailey, a senior VP, participated in a panel discussion on healthcare reform at the 17^th annual Wharton Health Care Business Conference held in Philadelphia.  This year's conference, entitled Leadership in an Evolving Global Market, explored the continuing evolution of health care and the leadership needed in both domestic and international markets.

The panel discussion, called "Health  Policy: Opportunities and Challenges," centered on these key questions:  

• What changes do you anticipate in your business in the next ~5 years as a result of healthcare reform?  What aspects of healthcare reform will create challenges or opportunities for your industry?
• What actions are you taking to prepare for these changes?  What other stakeholders will influence your strategy?  What effect will healthcare reform have on innovation?
• How should healthcare reform be implemented?  How can the cost controls included in the legislation be implemented in a way that will be meaningful?  How should "quality" be defined (what is the process through which it should be defined)?

Jack joined a prestigious panel from across the healthcare industry. He provided the audience with insight on how the pharmaceutical industry as a whole has been impacted by healthcare reform and the three key tools critical to shaping the future of healthcare delivery and payment:

1.     health information technology

2.     comparative effectiveness research, and

3.     quality standards.

"If used well, these tools will help coordinate care among providers and move us to a true "healthcare system," where delivery and payment will be based on quality of outcomes, not on quantity of services provided," stated Jack.

Jack also discussed how GSK is transforming its business model to fundamentally change the way we market and sell our medicines and vaccines in order to deliver the value our customers demand.   And how these changes are affecting how GSK approaches research & development and marketing & sales.

The annual Wharton Health Care Business Conference is a leading health care business forum for industry professionals, academics, and students. The two-day event typically attracts over 700 attendees from across the nation, and features distinguished speakers, dynamic panel discussions, special events, and various networking opportunities.

This week, roughly 1,000 biotech and pharmaceutical industry executives, entrepreneurs, research leaders, venture capitalists, and policy makers gathered at the Raleigh Convention Center to look at trends and opportunities in biomedical research and development. The event was a conference hosted by the Council for Entrepreneurial Development (CED), the North Carolina Biotechnology Center, and the North Carolina Biosciences Organization (NCBIO).

North Carolina ranks as the number three state in the nation for biotechnology and Research Triangle Park, NC, is the location for GSK's US headquarters.

The event opened with keynote addresses by North Carolina Governor, Beverly Perdue, and GSK's president of North America Pharmaceuticals, Deirdre Connelly.

Governor Perdue described the critical role the biotechnology industry has played in health, economic development, job creation, and support for education in the state of North Carolina. She stressed that North Carolina has been relentless in working to attract the biotechnology and life sciences industry to the state because of the benefits it brings to the state's economy and quality of life. She said her administration will continue to work to grow the industry in the state by competing nationally and globally to attract more bio investment in North Carolina.

In her talk, Deirdre Connelly outlined three major challenges facing the biopharmaceutical industry--healthcare reform, the changing regulatory environment, and waning research productivity--and described the steps GSK is taking to meet these challenges. Deirdre emphasized that in meeting all three challenges, GSK is working to ensure that it contributes innovative treatments that improve the quality of health outcomes and reduce the long-term costs of care.

To address the challenges facing the biopharmaceutical and biotechnology industries today, she encouraged those at the conference to show the same foresight, intelligence and resolve as those who founded the Research Triangle Park in 1959 and the NC Biotechnology Center did 25 years ago.  Deirdre concluded by noting that a concerted effort by all stakeholders to address today's challenges will make a difference in healthcare and deliver better health to the patients.

The speech is available here.

On Thursday this week, GSK is pleased to support an important discussion on health information technology, or what has become known as HIT. It has been two years since the HITECH Act was passed, authorizing $27 billion in new funding for HIT. The incentive program for physicians and hospitals begins this year and runs through 2015, paying up to $63,000 to each provider who implements the program and meets quality measures. GSK believes that HIT will play an essential role in changing the current state of the US healthcare system--helping to enhance quality and lower overall healthcare costs.

The event, organized by the American Journal of Managed Care (AJMC), is called "The Future of Healthcare Innovations and Health Information Technology." It will be held at the National Press Club in Washington, DC, pulling together healthcare stakeholders including policymakers, payers, providers, health IT professionals, health services researchers, patients, and medical educators, along with GSK, to discuss how HIT can best help improve care while lowering costs.

From the AJMC press release:

"For years, experts have speculated on the opportunities for broad adoption of HIT to improve healthcare delivery," said Dr. Jain, who in addition to co-hosting the event was the guest editor of the AJMC HIT special issue. "With passage of the HITECH Act, this speculation has grown into an ongoing, multi-sector, industry wide transformation. This event will shed light on this transformation and give additional direction to innovators who seek to participate in it."

In addition to sponsoring the live event, GSK sponsored a special issue of the AJMC, which can be viewed online at http://www.ajmc.com/supplement/managed-care/2010/AJMC_10dec_HIT.

This morning, President Obama signed the second part of the historic health reform package. This signing ceremony received far less fanfare than the ceremony he held last week, but it was no less important. Today's ceremony brings a year and half of political debate to a close and marks a turning point for healthcare in our country.

Now, you're probably wondering when you will start to see the benefits of this new law. The Kaiser Family Foundation has an excellent summary showing when each of the major provisions is scheduled to kick-in. The American Medical Association also has a good summary for physicians outlining what changes they can expect to see in their practices.

Certainly, implementing such a large piece of legislation will take time, so moving into this next phase of transforming our health system will require patience as regulators sort out all the details. GSK and other members of the pharmaceutical industry continue to be guided by a belief that all Americans should have access to high-quality, affordable health care coverage and services, and we believe the health reform legislation that passed this week is a step in the right direction. The legislation is not perfect, but we are committed to supporting its implementation so that it reflects the best interests of patients while preserving an environment that values medical innovation. 

This week's vote in the House of Representatives was nothing short of historic. It brought us one step closer to comprehensive health reform that will improve access to high-quality, affordable health care coverage and services. With the President ready to sign the Senate health reform bill into law, more than a year of debate is starting to draw to a close. But, before the ink is dry and other legislative issues rise to dominate the news, there is more work to do on healthcare.

This week, the Senate will take up debate on the reconciliation bill. Senate Majority Leader Harry Reid (D-NV) has promised that the reconciliation package will pass by the end of next week. While it's not a slam-dunk, the prospects are looking good for the reconciliation package to also make it to Obama's desk.

Together, the Senate health reform bill and the reconciliation package offer many positive provisions that improve access and promote wellness for all Americans. As the Biotechnology Industry Organization (Bio) outlined well in their health reform statement, the bills could also have a very positive effect on medical innovation. The current health reform bills aren't a panacea, and challenges will still remain for our industry and America's health system, particularly as the details of the legislation start to be implemented.  But overall, the vote was a very positive step forward towards comprehensive reform.

Yesterday's seven hour bipartisan extravaganza televised live on CSPAN gave viewers the opportunity to see first-hand why health reform has been stalled in Congress since January.  Despite President Obama's efforts to highlight areas where Democrats and Republicans agree, the party-line talking points triumphed for most of the day.

Through all the talking, those of us who still believe reform needs to be comprehensive and not just about insurance coverage found small glimmers of hope. Senator Tom Coburn (R-OK), a physician, spoke most eloquently of the need to better coordinate care and tackle chronic diseases by focusing on prevention. These ideas are central to controlling healthcare costs. Chronic diseases account for three-quarters of healthcare spending. Congress and the Administration must make every attempt to enact legislation that--at a minimum--includes prevention and wellness provisions to help drive down costs for chronic disease, thus driving down costs in the entire system.  No matter which side of the aisle holds a majority, this is some common ground where we all can agree.

Read GSK's full position on healthcare reform

To quit or to hope. That is the crossroads where President Obama found himself last night as he delivered the State of the Union address. He left little doubt which path he wants to define his presidency. While admitting the difficulties of last decade, and especially the economic and political difficulties of the last year, he offered stories of resilience from average citizens. The messages of hope and change that were so familiar in his Presidential campaign seemed to find their way forward again.

He confirmed job creation, hot health reform, will be his top domestic priority for 2010. Yet, he also called upon Congress not to let health reform wither away. In a somewhat surprising moment, his determination was received with applause from both Democrats and Republicans. It seems members on both sides of the aisle recognize that last week's Massachusetts Senate election does not change the fact that America's health system is on an unsustainable path. Chronic diseases account for an astonishing 75 percent of health spending. In their 2009 facts and figures report, the Alzheimer's Association predicts that Alzheimer's alone will bankrupt our current health system as our population ages. We must find ways to get out in front of Alzheimer's and other chronic diseases by improving access to high-quality, affordable health care coverage and services.

GSK maintains its support for appropriate health reform, and we recognize even with President Obama's calls for Congress to finish the job of passing health reform legislation, it may be difficult to agree on a comprehensive piece of legislation this year. But, we, too, are hopeful that Congress and the Administration will find a bipartisan way forward. We encourage leaders in Washington to make every attempt to enact legislation that - at a minimum -- includes prevention and wellness provisions in the current proposals that will help drive down costs for chronic disease. 

In an article in yesterday's LA Times, James Morone, co-author of "The Heart of Power: Health and Politics in the Oval Office" offered an interesting historical glimpse into two possible directions President Obama could take on health reform. He could model the way of Harry Truman and work to leave a legacy for the cause, or he could follow the way of Bill Clinton and all but abandon the effort.  It was clear from his State of the Union address last night, President Obama intends to be like Truman and fight on.

A year has passed since the US elected Barack Obama as our 44th President.

Traditionally, for the first anniversary, a gift made of paper is in order, which seems to make sense, as Obama's historic Presidency has ushered in an era of legislative activity not seen since the days of Franklin Delano Roosevelt.  They went through a lot of paper this year, and could use a few reams to replenish, we imagine.  (Coincidentally, More Than Medicine shares the same anniversary, but paper is so Old Media). 

In the last 365 days, we saw, among other things, the beginning of a major effort to transform the US healthcare system.  Efforts to achieve reform became more complicated last night when Massachusetts, the bluest of the blue states, elected a Republican to this seat for the first time since 1947.  Political observers have declared that this election is a complete game changer for the White House's healthcare agenda 

Early on in this process, President Obama asked major players in the healthcare industry to commit to improving access to health services for all Americans. Our industry rose to this challenge.  In an agreement with President Obama and the Senate Finance Committee, we pledged to help expand prescription drug coverage to seniors whose prescription drug costs fall in the "doughnut hole," the insurance coverage gap in Medicare Part D, by offering a 50% discount for all branded prescriptions in the doughnut hole. This pledge, along with several others made by our industry as part of the PhRMA Agreement, will help the underserved access critical medicines that will improve and extend their lives. 

President Obama realizes the importance our companies play in the overall health of this nation and he deserves credit for not shying away from tackling a difficult and controversial issue.  While we've agreed with his overall goals, there are important differences in our approach.  The President has publicly said he is in favor of importing foreign pharmaceuticals into the US.  This could have a lasting, harmful effect that undermines the role of the Food and Drug Administration. It also brings the possibility of counterfeits, incorrect dosages and drugs that could have different pharmacokinetics into the realm of our healthcare delivery system.  Further, healthcare providers who write prescriptions assume that the script is for a drug approved by FDA. 

As we look ahead to President Obama's second year in office, we hope he will make good on his campaign pledge to make the Research & Development Tax credit permanent.  This tax credit is available only for R&D done in the US.  For foreign companies looking to open a plant in the US, thus creating jobs, this tax credit is a significant factor in their decision.  By making this tax credit permanent, he can ensure American companies, or foreign subsidiaries will continue to invest their R&D dollars in the US and in American workers.

We look forward to working with the Administration and Congress on these and other issues that will ultimately ensure the US healthcare system continues to be the world's best.