Defining Value of Innovation in a Challenging Environment
How to shape and communicate the value of medical innovation is top of mind for research stakeholders as they balance the cost of innovation with meeting the needs of patients. Experts representing industry and payers discussed the challenges of defining innovation in the policy, market and political environments during a session at the BIO International Convention on Tuesday, June 7. Josh Ofman, senior vice president at Amgen noted that industry needs to be more proactive in communicating the value proposition of innovation: "We need a holistic picture of value from a societal perspective, patient perspective and payer perspective."
"Groups need to look at models that work" in assessing value and lowering the cost of disease, added Brian Gill, vice president of corporate affairs at Celgene. The single best way to reduce health care costs, he said, is to eliminate the disease. Gill pointed to Medicare Part D which he said represents a 60% reduction of Medicare spending in coming years. "Can we translate that model into a value model for the ecosystem?" he asked.
Lambert Van Der Walde, executive director at UnitedHealth Group said industry needs to come to the table with solutions. "The status quo" is not sustainable, he said, suggesting analysis on value is lacking. Market incentives for physicians could be among the solutions in improving access and reducing cost, he said.
Ofman argued the growth of diseases and an aging population will make the current health care system unsustainable. He said innovation in the biopharmaceutical industry is the best chance of bringing down cost. The insurance design is doing patients a disservice with access and out of pocket costs, Ofman noted. Value-based pricing and value-based insurance design must align, he said. Payers look at value through a very narrow lens. Value assessments in a robust ecosystem should be done by different voices including patient groups, he added.
Communicating innovation to various audiences continues to be a challenge for industry and other research stakeholders, Gill noted. "We are the best in translating disruptive science into medicine but we are terrible at communicating the value of those actions," he said.