Biotechnology Healthcare - September/October 2008 - (Page 21)

In some fashion, we’re going to find a way to guarantee coverage for people at both ends of the age spectrum. Children are relatively inexpensive to cover. And, although it may come with higher deductibles and other [out-of-pocket] responsibilities … in time, the Medicare age slowly has to work its way down. Ultimately, those two things will meet in the middle — not in the next four years, but somewhere down the road. And everybody will get some level of governmentsponsored insurance. Vogenberg: Biologics may represent a tipping point, forcing politicians to address the fundamental cost issues in Medicare. The Centers for Medicare and Medicaid Services, through its actuaries and economic forecast, says we are not able to sustain the Medicare program, particularly Part D, in its current state of benefits coverage. CMS is anticipating that biotechnology — by 2015 through 2020 — is just going to overwhelm Part D will financially swamp Medicare. We haven’t seen the biologic wave hit the marketplace, but a couple of years into the new presidency, that will change. Given that you need a couple of years to ramp up and make changes, if you don’t do something early, you’re going to have difficulty later in the presidency. What are the implications of this for biologic products? Greenwood: The greatest fear we have is that the next Congress and the next administration will believe that they can achieve savings in healthcare primarily by ratcheting down reimbursements — and they often focus on reimbursement for prescription drugs. There have been a number of efforts that some members of Congress support, includ- Another election, another Band-Aid? Healthcare reform carries a number of connotations. Depending on who is talking, it may mean increasing access, improving quality of care, or controlling costs. Mark McClellan, MD, PhD, former administrator of the Centers for Medicare and Medicaid Services, believes that one of these takes precedence: “With government spending as high as it is and with the budget as tight as it is, it is going to be hard to … make care more affordable and available for all without doing something about these … fundamental challenges in underlying costs.” McClellan, now a senior fellow at the Brookings Institution, made his comments at “Putting the Brakes on Healthcare Costs: Would the Candidates’ Plans Work?”, a June 3 briefing sponsored by the Robert Wood Johnson Foundation and the Alliance for Health Reform. Two of healthcare’s big-name economists, Paul Ginsburg, PhD, president of the Center for Studying Health System Change, and Uwe Reinhardt, PhD, the renowned Princeton University economics professor, also spoke. The three found many things to like in the candidates’ healthcare proposals — but nothing they thought would stop spiraling costs. “A number of things they are talking about — will they contain costs? Very uncertain,” said Ginsburg. “So, I would criticize all the candidates because a lot of the things they say certainly are not on the list of things that can really make a big dent in our cost trends.” What is on that list? Efforts to reduce demand for healthcare services from a population growing older and plagued with chronic conditions — a population that, in Reinhardt’s opinion, is at the mercy of providers who benefit from ever-increasing expenditures. “All of U.S. policy — I have observed it very closely for almost 40 years — is consciously geared to keep the demand side splintered and weak,” he says. “The supply side will go along with anything you propose. But the minute you propose really strengthening the demand side of the healthcare system, the supply side springs into action … and nothing will change that power relationship.” ing price negotiation in Medicare Part D and reimportation of drugs from Canada and elsewhere. Those sorts of short-sighted approaches could make pricing for biotechnology products very difficult. We hope the next Congress will create a pathway for the approval of follow-on biologics that protects patient safety and promotes continued innovation. A recent report by the Congressional Budget Office found that a pathway to review and approve follow-on biologics will result in cost savings to public and private purchasers of biologic products over a 10-year period. Congress may want to use those savings to offset the costs of other programs. Where will your efforts be focused after the inauguration? Greenwood: We expect that U.S. Food and Drug Administration Commissioner Andrew C. von Eschenbach, MD, will depart. The country can’t afford to have the FDA drift without strong leadership for a good portion of next year, so SEPTEMBER/OCTOBER 2008 · BIOTECHNOLOGY HEALTHCARE 21

Table of Contents Feed for the Digital Edition of Biotechnology Healthcare - September/October 2008

Biotechnology Healthcare - September/October 2008 Openers Editorial/David B. Nash, MD, MBA Contents At a Glance: Multiple Sclerosis Drug Track Personalized Medicine Healthcare Reform’s Effects on Biologic Access Breast Cancer Status Testing: A Crapshoot With Deadly Odds Trends, Issues, and Perspectives In the Management of MS So High-Tech, Yet So Simple The Evolution of Ascertaining the Value Proposition Specialty Pharmacy Employer to Employer Health Plan Confidential Trends

Biotechnology Healthcare - September/October 2008

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