 Al Jackson |
Not by accident
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How did we get here? It seems there’s always a villain when it comes to healthcare and spending. During the debate on the Affordable Care Act eight years ago, the health insurance industry had a target on its back, and suffered the wrath of policymakers and the public for charging exorbitant premiums, cancelling policies and denying care. Each year there are flare-ups in Congress and in the media about wasteful hospital spending, with demands for cuts in government reimbursement.
Now it’s the pharmaceutical companies being hammered for the high price of prescription drugs, facing political attacks from both sides on the campaign trail and bipartisan support for potential legislation that could curb patient access to needed medicines and slow the discovery of future treatments. Third-party, insurer-backed organizations purport to measure the “value” of drugs and, by extension, arrive at a “reasonable price.” And anti-pharma coalitions wisely focus attention on a few bad actors that have grabbed the headlines and made it easy to define the entire biopharmaceutical industry.
Biopharma is losing the message wars. But it’s not too late to balance the conversation, to make sure policymakers and patients hear from all sides.
Own the issue, drive the conversation
There’s a natural reluctance on the part of pharma leaders to put themselves out there and become the “face” of the pricing issues. In the current environment they find themselves immediately on the defensive. Some CEOs have gone on the record to condemn price gouging and to raise topics such as PBM rebates, the need for transparency and value-based pricing. But pharma leaders — and their counselors — must find a way to make their voices heard.
Armed with consistent messaging about pricing, value and patient access to treatments, pharma leaders across the board can step up to tell their story. Industry organizations such as PhRMA and BIO have launched campaigns highlighting the cost and challenges of innovation. That’s an important part of the story. But we must go further.
We’ve got to get the facts out there. Insurers and others reflexively point blame at the pharma industry for the lion’s share of rising health care premiums and costs. But the facts show a different story: between July 2015 and July 2016, the growth in prescription drug spending was only 3.9 percent, the slowest in three years, according to September findings by the Altarum Institute. Further, their analysis shows drug spending went up less than spending for home health, physician/clinical services and hospital care.
Accept responsibility, and compel others to follow
Most pharma leaders agree their industry needs to do more to address concerns about cost and utilization of pharmaceutical products. They recognize the need to demonstrate to patients and payors the value of some very expensive treatment regimens, and ensure improvement in patient outcomes. Many companies have explored innovative or alternative pricing arrangements with payors, such as pay-for-performance, outcomes-based guarantees and others.
However, pharma cannot — and should not — take all of the blame here. Many other areas of the healthcare system contribute not only to the rising cost of healthcare in general, but to the price consumers pay for pharmaceutical products. There is a tremendous need for transparency and understanding about how drug pricing really works, about how multiple parties contribute to the cost of pharmaceuticals today. For example, PBMs demand growing rebates from drug companies to be included on their formulary, rebates that patients rarely see. A growing percentage of insurance policies now require huge co-pays and deductibles for pharmaceuticals, raising the cost to patients. All of this needs to be on the table.
Speak directly to patients
Part of it is our fault. When the pharma industry first talks about price and cost, it’s usually in the context of an investor call and the focus is on return on investment for shareholders. In every other context, we talk and think first of patients. We’ve got to move patients to the center of the pricing and value discussion as well. To me, that’s what’s going to give the biopharmaceutical field a seat at the table, and force policymakers to work with pharma, rather than simply point fingers.
Viewing the cost and the burden of an illness from a patient’s perspective — how it impacts her family, her community and her livelihood — is the only way we can really understand the value of a biopharmaceutical that can treat that illness. You can’t look at the cost without also recognizing — and valuing — the benefit.
Amplify willing voices
It’s a simple argument for detractors to make — drug prices are going up and so are health insurance premiums. Take a look at the numbers and the graphs — it’s all right there.
In reality, it’s not that simple. Drug spending makes up only about 10 percent of the healthcare dollar. But the pharma industry’s explanations are complex. We must simplify the argument and help people understand the implications. While industry leaders need to lead the value conversation, it’s critical to involve others who are just as passionate about medical innovation and its role in their lives. Patients and families, for example, who have partnered with drug makers through clinical trials, patients who subsequently survive what had been an always-fatal cancer or are cured of Hepatitis C want to contribute to the conversation. We must create an environment where everyone has the opportunity to speak and be heard.
Pharma has a great story to tell, and the industry should be willing to engage in the value conversation. Drug spending is arguably the most efficient in all of healthcare. Pharmaceuticals keep patients out of the hospital, help prevent expensive medical procedures and improve lives.
Let’s talk about it.
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Al Jackson is Executive Vice President of Spectrum Public Affairs.
Lo Isidro, senior director at Real Chemistry with more than a decade of strategic communications and PA experience, has joined Narrative Strategies.
Nelson Fernandez, former North American chair of APCO Worldwide and managing director of Burson-Marsteller, has joined Volunteers in Medicine Berkshires as director of communications and PA.
Lilit Bargar, who was most recently an EVP in the healthcare practice at Weber Shandwick, comes on board at GCI Health as EVP, corporate practice lead.
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