Can We Move From Rhetoric to Reform?

How implementing innovative payment models can reduce costs, while encouraging ongoing innovation in health care.

Every day we read a plethora of divergent opinions on the topic of medicine affordability and hear fierce debate over potential solutions, who’s right and who’s to blame. The only facts we all seem to agree upon are that health care costs are unsustainable and that our system is extremely complicated and in desperate need of transformation. But despite consensus on the need for change, the current political rhetoric of forceful proclamations, catchy slogans and blunt ‘quick fixes’ seems to be taking precedence over the more systematic, multi-faceted efforts required to drive meaningful reform.

Take, for example, the medicine reimbursement system. With the rise of increasingly sophisticated treatments — from combination regimens in cancer to gene therapies for rare diseases — there’s an urgent need to establish similarly innovative payment structures to ensure patients can ultimately afford and benefit from these breakthroughs. This issue is even more pronounced when looking at FDA’s productivity and the robust pipelines dominated by promising new therapies.

Innovative reimbursement models based on how a medicine performs have been up and running in Europe for some time now. And in the United States, companies like Genentech have been engaged in a variety of private sector pilots to evaluate ways to reimburse medicines based on different indications, outcomes, and regimens. On a broader scale, however, the exploration of so-called value-based arrangements is not moving forward as fast as it should.

There are some valid reasons why barriers to large-scale implementation exist, including: government price reporting regulations, anti-kickback statutes, structural constraints making it difficult for patients to share in cost savings, and the limitations of current systems for capturing, tracking, and sharing utilization and outcomes data. All of these require significant modernization if the reimbursement system is to keep pace with medical innovation. Change like this doesn’t happen overnight or without the collective will and capabilities of everyone involved — government, providers and industry alike. But it is possible if we can come together to find workable solutions centered on common goals of preserving access to transformative treatments and reducing patient costs.

In fact, if we are to realize the promised savings of value-based agreements today and — perhaps even more importantly — find ways to appropriately reimburse the medicines of the future, we all have to get comfortable breaking with long-established mechanisms and rolling up our sleeves to do the hard work of positively disrupting the status quo.

One example of this is our proposal that unique National Drug Code (NDC) and Healthcare Common Procedure Coding System (HCPCS) codes be created for medicines used in combination, allowing manufacturers to immediately lower the list price of certain of these treatment regimens. Though the overhaul required to implement such a change might seem daunting and require collaboration across multiple organizations, the potential savings for patients and the system overall could be significant — particularly as more and more medicines are being studied for use in dual and triplet combinations.

An additional opportunity for reform is around data standardization and interoperability. In our value-based agreement pilots with commercial payers, we identified scalability challenges due to the effort required to harmonize various data systems. For meaningful value-based arrangements to thrive across multiple payers, providers, and patient populations, we, as a health care ecosystem, need to find a solution that encourages simplicity and the streamlined collection, synthesis, and exchange of data, as well as agreement on definitions of value and outcomes.

Technical reforms like these don’t make for great headlines. Nor would any one of them alone represent a comprehensive solution to all the issues we face today. But in the aggregate, they’re examples of the kinds of challenging, systemic changes that — in addition to responsible pricing actions — are absolutely needed to simplify and evolve our health care system in a way that both ensures affordability and encourages ongoing innovation.

Seemingly simple short-term ‘fixes’ might bring positive headlines and political goodwill today, but only at the expense of the long-term wellbeing of the health care system and the people who will continue to depend upon it in the future. It’s time for us all to move beyond the rhetoric, find common ground and get on with the hard work of system reform.