Monday, February 28, 2011

Pharma: It Must Invest in Improving Health Outcomes

If you're a businessperson and you see an opportunity, don't you take it? Especially if the opportunity is in a business that doesn't seem particularly interested in protecting its territory.

The territory we’re talking about: the quest for improving health outcomes. In a new Ernst and Young report, the authors say that non-traditional companies are investing in projects designed to improve health outcomes. To be sure, some of these partners are traditional, like Apple and Abbott Labs.

The non-traditional investments far outweigh those of Big Pharma. The non-traditionalists have spent $20 billion since 2006; Big Pharma’s figure was not given, but it wasn’t close to that, according to a Bloomberg story.

The authors say that Big Pharma has no choice but to invest in improving health outcomes, and for two reasons: the current health care system is not sustainable -- but new technologies can make it so. These technologies, the writers say, can drive behavioral change.

Examples of these projects include the insurer UnitedHealth Group, the YMCA, and Walgreens, which are working together in a diabetes management program. Others, according to Bloomberg, include GE, Telus Corp, a wireless carrier, and IBM.

One company, called PharmaTrust, based in Toronto, is creating a device called MedHome that dispenses the appropriate amount of medicines to patients in their homes. At the same time, it communicates with providers and caregivers about patients’ compliance, according to the report.

And Qualcomm, the mobile technology company, is hoping to increase compliance and health outcomes with its “connections:” an Internet-connected pill bottle cap designed to increase compliance and also lets patients refill prescriptions by pushing a button on the underside of the cap; and a “connected” blood glucose meter that tracks how often patients are testing themselves and reminds them when they are running low on supplies. They can even reorder from the device.

“Pharma is significantly behind the medical device industry in thinking about connectivity and using its power for productivity and business model innovation,” wrote one Qualcomm exec.

All we are suggesting is that innovation may quickly become the domain of others. What are the unintended consequences of this lack of pharma innovation? 

Thursday, February 24, 2011

Investing in Health Outcomes: Does Pharma Get It?

A new Ernst and Young report on what it calls Pharma 3.0 – the industry’s migration from its sole focus on selling medicines to the inclusion of improved health outcomes – reminds us of the tale of the Big Three. Yes, we mean Detroit.

We’ll get to that analogy in a minute.

“In Pharma 3.0,” the authors write, “companies will succeed or fail based not on how many units of a drug they sell, but on how well their market offerings improve health outcomes.” Considering that this report included roundtable discussions and more from numerous Big Pharma execs, it’s safe to say it has lots of industry buy-in.

The report says that some pharma members are investing in such programs. By the authors’ count, 220 programs were launched between 2006 and 2010, with the lion’s share, 44%, coming last year. The authors say nearly all the top pharma houses “are active in the Pharma 3.0 space” with a few, such as Pfizer, Novartis and Roche “leading the charge” with more programs. (Pharma 1.0 is how business was conducted; Pharma 2.0 is considered Pharma’s pursuit of blockbuster drugs and is now coming to an end.)

The report doesn’t talk about how big the programs are, or how much money industry has spent.

But it does mention how much money other companies – non-traditional organizations like Apple and IBM – are spending: $20 billion.

And counting. The writers aren't pleased with industry's skimpiness.

“Pharma is still focused on investing in drug innovation,” says a Johnson and Johnson exec. “We’re not making the kinds of investments in Pharma 3.0 that many non-traditional entrants are making.”

And now for that Big Three connection.

For those of us old enough to remember, do you recall when Toyota and other foreign automakers seriously started selling their cars on American soil? The Big Three ignored their fuel efficiency, their smaller size, their better performance – until it was nearly too late.

The article authors make a similar connection.

“It is important, however, for pharma companies to recognize that they may have a limited window of opportunity. Today’s non-traditional entrants, though unfamiliar with the health care business, could prove to be quick learners, and the advantages that the pharma companies have because of their domain knowledge could shrink in a few years.”

Tomorrow: what those non-traditional entrants are doing.

Tuesday, February 22, 2011

Elected Officials: Poor Profiles of Courage

A while back I started to receive an e-mail newsletter from an organization called The Healthcare Channel.  Much of it covers topics relevant to healthcare, particularly in Washington D.C. My reason for raising awareness about its work is a recent article below, which concerns the unlikely confirmation of President Obama's pick for Medicare chief, Donald M. Berwick, M.D.

My take: This article encapsulates a huge problem we have in this country. Our elected officials, on both sides of the aisle, need to wake up and realize this country is dysfunctional because they lack the courage to make difficult decisions.

While this blog has never been overtly political, we have discussed politically created unintended consequences, such as the Physicians Payments Sunshine Act. I think what is happening here as part of Dr. Berwick's confirmation process is a travesty that will have a negative impact on our country's ability to solve our healthcare crisis. I know the qualities of a man like Dr. Berwick's and believe this is someone we need to help us create change. His willingness to do what is in the best interests of the country has always been one of his hallmark traits. While I am sure his presumed replacement, Marilyn B. Tavenner, a nurse, has many great qualities, I am not sure Congress has really given Dr. Berwick a fair shot to try and make change happen.

As always, I am interested in knowing your thoughts.


Rising Calls to Replace Top Man at Medicare
By Robert Pear
The Healthcare Channel


WASHINGTON — Members of Congress, including Democrats, have urged the Obama administration to search for another Medicare chief after concluding that the Senate is unlikely to confirm President Obama’s temporary appointee, Dr. Donald M. Berwick.

Dr. Berwick’s principal deputy, Marilyn B. Tavenner, has emerged as a candidate to succeed him. Lawmakers of both parties said Monday that Ms. Tavenner, a former Virginia secretary of health and human resources with extensive management experience, could probably be confirmed.

In a letter to the White House last week, 42 Republican senators urged Mr. Obama to withdraw the nomination of Dr. Berwick to head the Centers for Medicare and Medicaid Services, which runs insurance programs for more than 100 million people. If those senators stick together, they could block confirmation.

Mr. Obama bypassed Congress and appointed Dr. Berwick while the Senate was in recess last July. The appointment allows him to serve to the end of this year.

The president has nominated Dr. Berwick three times, most recently in January. No confirmation hearings have been held, and none are scheduled.

Reid Cherlin, a White House spokesman, said the president would not withdraw the nomination. “The president nominated Don Berwick because he’s far and away the best person for the job, and he’s already doing stellar work at C.M.S.,” Mr. Cherlin said.
It is not clear whether the White House will fight for the nomination or press the Finance Committee to hold a confirmation hearing, which could provide Republicans another opportunity to criticize the new health law.

Dr. Berwick, a pediatrician and a health policy expert, was hired to run Medicare and Medicaid. In recent weeks, the White House has expanded his portfolio to include federal regulation of private insurance.

As a co-founder of the Institute for Healthcare Improvement, a nonprofit organization in Cambridge, Mass., Dr. Berwick advised hospitals on how to save lives by upgrading care and reducing medical errors.

He became caught up in the partisan battle over the new health law. Republicans challenged him to explain comments in which he had discussed the rationing of health care, praised the British health care system and urged health care providers to reduce the use of ineffective procedures near the end of life.

At a hearing of the House Ways and Means Committee last month, Dr. Berwick said, “I abhor rationing.” Representative John Lewis, Democrat of Georgia, told Dr. Berwick, “I love your testimony, not just like it but I loved it.”

Republicans were hostile.“In your testimony, I see nothing but platitudes,” Representative Charles Boustany Jr., Republican of Louisiana, told Dr. Berwick.

Representative Geoff Davis, Republican of Kentucky, said Dr. Berwick’s answers bordered on equivocation. And Representative Tom Price, Republican of Georgia, told him: “You missed your calling. I think you would make a great lawyer.”

Several people who work with Dr. Berwick at the Medicare agency said they were disappointed that the White House had not done more to promote him. “Everybody here admires Don and the work he’s done, but he is not going to be confirmed,” a supporter said. “That’s inevitable. The Republicans will block him. There’s not a lot of optimism that the White House can do anything about it.”

Ms. Tavenner, a nurse, worked for more than two decades at the Hospital Corporation of America, first as a nursing supervisor, then as a hospital executive and eventually as president of the company’s outpatient services group.

Thursday, February 17, 2011

Can Pharma See Wisdom in the Sell-Off?

The Street is pushing Big Pharma members to sell off their non-core assets. Why? To keep stockholders happy, of course. Even the media-deprived know that last year was not a stellar year for pharma, finance-wise or any other wise.

The Street people are arguing that some Big Pharma members are worth more dissected than they are whole. If Abbott Labs, for example, were torn asunder and its various pieces sold off, it would make a handsome profit, and its stock price could jump 30%, according to an analyst quoted in Barron’s.

Obviously, that money could be used for what’s needed: R and D.

FiercePharma brings up the point, and it’s a good one, that such dissection would run counter to what pharma members have been trying to do with all these mergers and acquisitions, and that is survive – a sophisticated way of hitting the mattresses, if you will.


Our two cents: We’re with the Street, but not for the same reason. We think it’s time for pharma members to get back to their roots, and that is Research and Development, 24/7. If discovery, trials, regulatory, and so on were the same as they were 30 years ago, it would be one thing, but they are all much tougher today. The amount of focus and concentration needed is exceptional.

Too many divisions cause too many distractions, too many worries.

Barron’s is right: Bigger is not always better. In fact, it can be a real burden.

Monday, February 14, 2011

Telehealth: Simple Is Beautiful

One challenge with healthcare is figuring out when people alone can produce the best healthcare outcome for the patient, or when technology can do the job better.

Or a combination of the two.

We present, as an example, a three-year Department of Defense study involving pediatric care in the Pacific Rim. The DoD wanted to see if physicians who consulted with pediatric subspecialists online regarding consultations, treatments and so on, could improve health outcomes for young patients while saving the DoD money. The conclusion: Yes on both counts.

The study, conducted between 2006 and 2009, looked at more than 1,000 tele-consultations in community hospitals from the area, including Guam and South Korea, often in areas where pediatric subspecialists are not available. Most of the tele-consultations, 75 percent, came from these areas.

Because the doctors spoke, the diagnosis and/or treatment plan was changed for 74 percent of the children – preventing patient transfers to other facilities between 12 percent and 43 percent, saving American taxpayers between $208,283 and $746,348 each year – not to mention saving the children and their families unnecessary expense and concern. The study authors said the number of “tele-consultations has grown significantly since 2006.”

It didn’t take long for the Twitter world to react to this study. One tweet [Feb. 8, 8 p.m.] asked if healthcare pros who don’t use telemedicine are negligent; another [same time] said Alaska and Hawaii are teaming up to extend telehealth to remote locations in those states.

The straightforwardness of this study, and its convincing outcomes, dispels the healthcare challenge this particular problem presented. That is why we wanted to bring it to your attention.  If only all things were this simple.

Thursday, February 10, 2011

Medication Adherence: Two Views

We have a friend who’s done a lot of research on medication adherence, and he says that healthcare professionals fall into two camps regarding how they see patients and their capacity to maintain their treatment regimens. In the one camp, he says, are those who think patients can't motivate themselves for their own betterment. It’s the doctors who have the answers, not the patients.

Those in the other camp think just the opposite. They say patients are smart enough to know they need to maintain their prescribed regimen – they just need a little help to stick with the program.

Is it possible both camps are right? A study of hypertensive Medicaid patients who used a pill phone app on their cell phone reminding them to take their meds is pointing that way. It was a small study – 50 patients -- so we’re loathe to do more than surmise.

In a nutshell, the 50 patients accepted the idea, and used the app throughout the seven-month study. The patients were “generally satisfied” with the software, and patients continued to have their scripts refilled. But – once the study was over, there was a “decrease” in refills “after the application was discontinued.”

So, the study’s sponsors and researchers, including George Washington University Medical Center, appreciated that the participants were smart enough to be taught how to use the technology. And these patients used it for the study's duration. But once they no longer had the phone, they stopped.

Why? It would be good if the researchers asked some follow-up questions of these study participants. Any insight into how patients feel about maintaining their treatment regimens can only help.

Monday, February 7, 2011

Invest in Healthcare, But What Exactly?

A recent Wall Street Journal piece regarding why pharma is having problems producing effective product caught our eye. The Feb. 9 op-ed article, called “Health-Care Investment: The Hidden Crisis” [subscription-only access] lays out ways that Washington “can remove some of the barriers to growth in medical research.” Its author: Michael Milken.

He argues that “improved public health translates directly into greater national productivity, which underpins all economic growth.” He cites figures showing how life-expectancy gains have added to America’s prosperity, and expresses concern that cuts in NIH funding “will cause some younger medical scientists to either change careers or take their work to places like Singapore” which welcome researchers.

The barriers he talks about are the usual suspects: anticipated patent expirations, regulatory issues, qualms about litigation exposure, and high U.S. taxes on repatriated overseas earnings.

Mr. Milken is on point linking ROI and extended lifespan. The study he cites –- that gains in life-expectancy since 1970 have added $3.2 trillion per year to "America's national wealth" – is impressive. We further argue that if more attention were paid to medication adherence, then that figure would be even more impressive.

Mr. Milken also argues that the FDA needs more resources to “keep up with the pace of innovation in such areas as medical-device development and regenerative medicine.” Agreed – let alone with inspecting clinical trials on foreign soil.

But let’s also consider this: The FDA needs resources to find different ways to solve their medical information problems. While the FDA guards public health, the FDA doesn’t produce good guidance on medical information and as a result industry may not provide good medical information to the patients using its products. A few years ago, the public didn’t have access to this information, but now it does. And the public will be talking about this information on social media sites. We believe the FDA isn’t moving quickly enough on its social site regulations or being adaptive enough about the content it regulates. It needs the time and resources to define flexible policies, not to apply additional funds to enforcement.


To our way of thinking, the FDA should become less regulator, and more healthcare-outcome policy initiator and promoter.

Thursday, February 3, 2011

EMRs and Pay for Performance: Stay the Course

Consider: When people must choose between changing an ingrained behavior, or proving why they don’t need to change their behavior, they will put their energies into the latter. Depending on what that behavior is will determine how much conflict there will be, and how uncomfortable the situation will get.

We fear that those who see no future in health IT or pay for performance will use lots of energy to convince others. One analysis study published in the Archives of Internal Medicine, one IT survey from Thomson Reuters/HCPlexus, and one pay for performance study published in BMJ suggest that physicians have no need to change behavior.

“Don’t spend any more money on this foolishness,” they are saying.

In our mind, is the question about the technology, or about change management?

In the Archives study, researchers from Stanford University pored over 255,402 non-hospital patient visits that occurred between 2005 and 2007 to non-federal treatment facilities. The authors looked at the role of electronic medical records (EMRs) and clinical decision support software (CDS) in assessing whether patients received better care, using 20 quality indicators as benchmarks. EMRs and CDS only exceeded one benchmark, the authors concluded.

"These results raise concerns about the ability of health information technology to fundamentally alter outpatient care quality," they wrote.

In the IT study, 3,000 MDs were queried as to whether EMRs would help patients: 39 percent said yes, 37 percent said there would be no effect, and 24 percent said the effect would be detrimental.

But could it be that some doctors aren’t tech-savvy, or that they just don’t have the time to learn how to use the system? We do not think the former, but it's true EMRs will likely,at least in the beginning, take them away from their patients. But over time, that should pass. 

Maybe it's all in the way IT is approached.An analysis study highlighted in FierceHealthIT showed that using IT, along with clinical guidelines, cut down on imaging studies for lower back and headache MRIs, and hence the costs. Yet another study in the same article noted that improvements came about when “healthcare organizations wholeheartedly embraced the technology and customized it to maximize performance.”

The operative word here: wholeheartedly.

Writes FierceHealthIT: “Physician complaints about computers detracting from patient encounters show that many doctors don't yet know how to use EHRs properly. …While today's health IT leaves much to be desired, doctors must make the effort to meet computers halfway if they expect the technology to help them improve care.”

In the BMJ pay for performance study, the researchers chose 470,725 hypertensive patients to follow between 2000 and 2007. The point: to see if their physicians could improve their patients’ numbers, earning money if they did. Nada.

“Pay for performance had no discernible effects on processes of care or on hypertension related clinical outcomes,” the authors wrote. “Generous financial incentives, as designed in the UK pay for performance policy, may not be sufficient to improve quality of care and outcomes for hypertension and other common chronic conditions.”

It’s very possible the researchers chose the wrong disease. After all, hypertension doesn’t have any initial symptoms. Patient adherence could have been an issue.

On his blog, KevinMD writes that health reformers need to “be careful about overstating the benefits” of IT and pay for performance. “The data isn’t there yet,” he says.

Our point exactly. These studies have older data. Let's see what newer data can tell us before hardline decisions are made.