So far in 2020 PharmaBoardroom has conducted interviews with several key stakeholders in US healthcare. We have heard from leaders the US FDA, as well as representatives of patient groups, health insurance providers, and firms operating in the US on what they consider the most pressing issues facing US healthcare. Three recurring themes mentioned by all those interviewed are how to drive affordable access for all patients, questions around local manufacturing, and the increasing importance of generics in bringing down overall healthcare costs.
Access
Access and affordability are key issues in the US, which stands alone as the country with by far the highest medicine prices in the OECD. The Affordable Care Act, though many believe to be in need of further reform, was initially meant to increase patient access to treatments. The stakeholders PharmaBoardroom interviewed consider access to medicines a top priority and spoke about the ways their organisations are advocating for access for all Americans.
Our main focus is to drive meaningful and affordable access to high-value care, and we still have a long way to go.
The National Health Council’s mission is to provide a voice for those suffering from chronic diseases. NHC CEO Marc Boutin emphasized the need for collaboration to improve access for these patients: “The NHC focuses on systemic issues that are important to all people living with chronic conditions such as access to care and driving patient-centred innovation. In order to truly have an impact on these issues, we need to understand the different perspectives of all stakeholders. Therefore, we have representatives across the entire health spectrum in membership, including the biopharmaceutical, generic drug, device, diagnostic, payer, researcher, and caregiver communities.”
Boutin continued to speak about the impact of health insurance policy shifts on access, “Our main focus is to drive meaningful and affordable access to high-value care, and we still have a long way to go. The influence we had in the Affordable Care Act (ACA) has granted access to tens of millions of people in the United States. The unfortunate reality is that it created unintended consequences of new barriers to access and cost-shifting to people with chronic conditions.”
On the pharma side, the National Pharmaceutical Council (NPC) is also actively pursuing ways to improve access. NPC president and CEO, Dan Leonard highlighted the council’s focus on value and collaboration, “Our research also is examining a variety of creative financing mechanisms that will enable payers and manufacturers to work together to provide improved patient access to curative gene therapies and other treatments. Our current healthcare system isn’t built for recognizing the full value of these innovations. Making sure that the value of these innovative treatments is considered properly is top of mind.”
Barbara Lopez Kunz of the Drug Information Association (DIA) made it clear the DIA is also thinking about access issues, “We care about how to ensure therapies are accessible to people and how to develop an understandable narrative on the value of therapeutic innovation. There are ethical issues at play, and we have the thought leaders who are advancing knowledge in these important areas.”
Representing the health insurance perspective, Matt Eyles of the Association of Healthcare Insurance Providers (AHIP) emphasized the importance of equality to improve access, “Our aim is to ensure that all Americans have access to health coverage. Post-ACA, health insurance companies can no longer look at an individual’s health status or consider their pre-existing medical conditions before offering comprehensive coverage – it must be on the same terms as that which is offered to everyone else.”
Manufacturing
Pharma manufacturing in the USA has re-entered the spotlight in recent years as part of a wider “Made in America” policy push from the Trump administration. However, some stakeholders advised caution before rushing to bring traditional manufacturing back to the USA. Others highlighted the necessity of continued international collaboration in manufacturing.
It is much more feasible to do advanced manufacturing than it is to do traditional manufacturing in the USA.
Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, provided a word of caution about the potential liabilities of traditional pharma manufacturing and the need for a highly-skilled workforce to carry out advanced manufacturing: “Traditional manufacturing has a lot of environmental liabilities. It also requires a large workforce and physical footprint. Advanced manufacturing deals with those liabilities, so it is much more feasible to do advanced manufacturing than it is to do traditional manufacturing in the USA. Because we have been pushing this, we have received money from Congress to give out grants to universities. We need a workforce schooled in advanced manufacturing.”
India and the US have enjoyed a strong collaboration in pharma manufacturing. KV Kumar, president and CEO of the Indian-American Chamber of Commerce provided compelling reasons for India and the US to continue this partnership, “Indian manufacturers excel in high volume, low-cost manufacturing. Indian researchers in the US pharmaceutical industry are some of the best in the world, and funding of promising companies has never been an obstacle to growth. Indian manufacturers in the US continue to work with the FDA and other experts to present innovative approaches to the development of drugs and biologics, in addition to generics. There are not only strong scientists but also robust financial backing that has definitely set this market up for success. Finally, the pharmaceutical, medical equipment & medical supply industry has no limits for innovation & growth.”
Generics
Generics play a vital role within US healthcare and have come a long way since their use was first approved in the country by the Hatch-Waxman act of 1984. They now represent over 90 percent of prescriptions dispensed in the US and the market is predicted to continue to grow to USD 86 billion by 2022.
Robert Matsuk, president of Glenmark North America mentioned the incentives present for generics in the US healthcare system which lead to their widespread use, “On the generic side, there are already built-in incentives to drive penetration in the healthcare system. In fact, about 90 percent of prescriptions in the US are filled with generic products. Pharmacy Benefit Managers (PBMs) will typically advocate for the use of generics to create saving, even if sometimes there are debates on whether the first generic entering a market will be automatically covered on the formulary of a Medicare plan. Overall, generics are going to be more favourably priced compared to branded products except in specific situations. From a Medicaid and Medicare perspective, any opportunity to reduce the cost for the patient – in both generic and branded segments – will always be prioritized.”
Our buyers are thinking strategically about the longer term. Price is important but with complex generics, we are seeing a shift where price is no longer the only deciding factor.
Biocon, an Indian firm with a strong presence in the US, specializes in generics and biosimilars. Abhijit Zutshi, commercial head of global generics, spoke about the strong competition present in the US generics market and recent shifts in buyer priorities, “You have to always assume the presence of competition, especially in the generics space. As mentioned, the level of vertical integration we have allows us to control our costs and supply chain, making us extremely competitive. It would be naïve to say we can avoid competition but with a complex portfolio, competition is more limited. For instance, with our rosuvastatin, even though it was the 18th or 19th generic approved in the US, we still managed to gain 17-18 percent market share… Our buyers are thinking strategically about the longer term. Price is important but with complex generics, we are seeing a shift where price is no longer the only deciding factor. They are looking for reliability, regulatory track records and strong quality systems. There is an element of close monitoring of the manufacturer’s operations. This is something we can capitalize on in order to communicate a more differentiated value proposition for our portfolio.”
