I’d like to talk with you today about
prescription drug costs which are
understandably a very complex and
difficult topic but what is not complex
or difficult is the fact that in the
United States we overspend on health
care compared to any other country in
the world and we’re not getting the
value for that it turns out this
overspending is no accident but it is
avoidable and today what I’d like to
talk with you about is share with you
some of the research and some of the
tools that been developed by the
scientific community to address what’s
fundamentally a question of value in
health care and propose a solution I
want to talk to you about comparative
effectiveness research this may sound
like a really big term but what this
body of literature does is performed all
over the world at universities and
nonprofits is it asks the question of
our healthcare services what’s the best
value and what they do is they take a
condition for example a health condition
they look at all the treatments that are
available for it let’s focus just on
drugs today and they ask the question of
these possible drugs which one works
best for this health condition in this
patient population in fact this data is
so powerful and it’s so informative that
many of these countries listed here as
well as many others around the world use
this information to create lists of
drugs that are utilized and also paid
for within their countries but this is
not how we do it in the United States
and it gets worse because we think that
the FDA does this for us a Brigham and
Women’s study asked physicians what they
believe the FDA does and 73 percent
responded that they believe that FDA
approves new drugs if they’re better
than old drugs that means built
physicians 73 percent of physicians
believe that the FDA uses comparative
effectiveness research and making
decisions
which drugstore proof unfortunately this
is not the case the FDA as our drug
regulator does a lot of good things for
us and they do use a lot of scientific
information but they do not require drug
manufacturers to prove that their drugs
are better than existing medications in
order to get approved and get on the
market their stance is that’s somebody
else’s job somebody else needs to come
and figure out which drugs are going to
get used and which drugs are going to
get paid for so in the United States
what we have are two large payers so to
speak if you want to think about who
pays for drugs government is one large
payer as well as employers and what
these organizations do is they hire
somebody a middleman to go look at all
of those possible drugs approved by the
FDA allow it to be purchased in the
United States and they came up with
something they come up with something
like this and you’ve probably seen some
version of this in your health plan
right you just all you know about
prescription drugs is here are the drugs
that are covered here are the drugs that
your company your insurance provider
will pay for and you don’t really get
much more detailed beyond whether
they’re a brand or a generic which just
tells you a little bit about what you’re
gonna pay in co-pays the question we
want to ask though is is comparative
effectiveness research being used to
create these lists of cover drugs
because we know it’s not living at the
FDA we know they’re not doing it and we
know every other country in the world
uses this data to figure out what’s best
let me show you a tool developed by this
research community to help us visualize
how valuable this approach can be this
is just a simple plot but what we can do
with this research is we can look at
measures of effectiveness so for example
how well the drug works can go here on
the horizontal axis so right good left
bad we can also look at side-effects so
more side effects up bad fewer side
effects down good and now you can see
again compared to what we always need to
ask that question in healthcare it could
be compared to nothing it could be
compared to another drug but compared to
something drugs that are more effective
and have
your side-effects no-brainer those are
really good drugs and really high value
conversely drugs that are less effective
and have more side effects another
no-brainer those are not very good and
look we’ve got two options that are
significantly better and understandably
there’s another category where you have
drugs that are more effective but also
have more side effects so they’re what
we need is more information now is when
we can start to look at cost so let’s go
back to that list of covered medications
that I showed you
now that list is an actual real list
from an insurance plan so I decoded all
of the names but this is really this is
true and what I’m showing you here is
actual comparative effectiveness
research for these medications and what
they do is they treat blood clots in the
legs and the lungs which you may need
after surgery for example the first
thing to note is that there are more
medications than are covered the second
thing you may want to point out I want
to point out is that look at how they
spread out across the chart some are
good some fall into we’ve got two drugs
that fall into that good category we’ve
got quite a few up there that have more
effectiveness but also more side-effects
so if we look at the medications that
are hypothetical drug plan but real drug
plan actually covers what we see is kind
of interesting so they cover the
standard of care drug G they’re in the
middle they also cover the best drug
drug a it’s great news but what about
drug B it’s got more effect more
effectiveness but it also has more side
effects so now let’s look at cost I’m
finally coming to the topic I promised
you I’d want to talk about but I want to
if you’re confused so am i and so were
we
when we looked at this data but what
you’re seeing is true drug B on the
market is ninety five dollars it’s nine
times more expensive and yet it’s less
effective and has more side effects than
drug a what should be also startling is
that drug G there in the middle less
effective more side-effects
why is it the same cost as a drug that’s
actually better for you
what’s clear when we look at
prescription drug costs through the lens
of comparative effectiveness research is
that this research is not influencing
decisions in the United States that in
turn influence you and decide which
medications you will have access to
through these lists of covered
medications so someone somewhere in our
[Music]
this is another difficult subject how do
we figure out whose miss incentivized
well one way we can do that admittedly
it’s complex but one way we could do
that is we can look to see who – who –
pharmaceutical manufacturers incentivize
who they’re the ones that are trying to
sell their medications and get them on
the market maybe if we look at where
they devote their dollars we can start
to figure out who might have a miss
incentive well if you were to ask around
and maybe some of you are thinking of it
it’s got to be all those ads we see on
TV right bombarded with them here’s the
data pharmaceutical company spent six
billion dollars on those ads you see on
TV but what they spent in rebates and
discounts to get their drugs listed on
those covered medications lists and to
get them sold was a hundred and fifty
billion dollars so if you thought it was
ads this this influencer is 25 times
more influential even if you don’t know
who they are so the it’s unclear exactly
where that hundred and fifty million
dollars goes but
we spend about four hundred and fifty
billion on drugs so that means that
one-third of what we spent went to
wherever whoever these companies are and
industry experts expect that that is
largely middlemen these are the same
middlemen that create those covered
medication that Lowe’s those lists have
covered medications but who are they why
are they so influential it turns out
these middlemen are not really middlemen
they also own most of the pharmacies in
the United States that’s why they’re so
influential because they not only get to
control which drugs are covered and
which drugs you end up using but then
they also get to turn around and sell
you those medications and this is pretty
simple if you’re a pharmacy do you want
to sell an $11 medication or a $95
medication comparative effectiveness
research is an incredibly powerful tool
and it’s everywhere and we can use it to
harness and get more value out of our
health care who can help us do that is
it Pharma well we want them to do more
of these studies but at the end of the
day if their drug is worse than their
competitors they still want to sell it
so we don’t want them owning this
conversation what about middlemen we
they’re supposed to be doing this for us
but if you rewind 20 seconds you’ll see
why actually at least in their current
incarnation they’re not the greatest
people to bring this forward government
is a solution for some countries it may
or may not be a solution in the United
States
what about employers employers are best
positioned to harness the value of
comparative effectiveness research and
it’s because most employers don’t
actually buy insurance they actually
become insurance companies and that
means that they’re the ones actually
cutting the check for the total cost of
prescription drugs on your behalf what
that means is that they now have control
and in fact many employers independently
as well as part of large consortiums are
starting to say hey we have ceded far
too much control to middlemen and we’re
not getting the return on having given
that control so they’re taking it back
and they’re using evidence-based tools
such as comparative
activeness research to build you better
health plans now what about you
here’s some more data you unfortunately
only pay for about 18 percent of drug
costs it turns out government is about
42 percent and employers about 40
percent so it’s tempting to look at this
data and think you can’t really do
anything about it
but wait it’s your tax dollars that fund
Medicaid and Medicare and it’s actually
your lost wages because employers have
to pay so much for benefits they can’t
give you more salary increases so you’re
actually subsidizing
all of this prescription drug costs
maybe not directly but you are the most
important influencer in this decision
and the most important thing that you
can do is educate yourself comparative
effectiveness research is publicly
available published by nonprofits and
universities it’s out there get become
aware of it and learn about this tool
and then go ask questions if you’re in a
self-funded company ask your HR
department hey how did you build our
health plan if you get your benefits
from Medicaid or Medicare talk to your
congressperson and ask them the same
question our pharmacy system is not an
organic system we developed it as people
so at the end of the day we as people
are the ones who need to fix it thank you
prescription drug costs which are
understandably a very complex and
difficult topic but what is not complex
or difficult is the fact that in the
United States we overspend on health
care compared to any other country in
the world and we’re not getting the
value for that it turns out this
overspending is no accident but it is
avoidable and today what I’d like to
talk with you about is share with you
some of the research and some of the
tools that been developed by the
scientific community to address what’s
fundamentally a question of value in
health care and propose a solution I
want to talk to you about comparative
effectiveness research this may sound
like a really big term but what this
body of literature does is performed all
over the world at universities and
nonprofits is it asks the question of
our healthcare services what’s the best
value and what they do is they take a
condition for example a health condition
they look at all the treatments that are
available for it let’s focus just on
drugs today and they ask the question of
these possible drugs which one works
best for this health condition in this
patient population in fact this data is
so powerful and it’s so informative that
many of these countries listed here as
well as many others around the world use
this information to create lists of
drugs that are utilized and also paid
for within their countries but this is
not how we do it in the United States
and it gets worse because we think that
the FDA does this for us a Brigham and
Women’s study asked physicians what they
believe the FDA does and 73 percent
responded that they believe that FDA
approves new drugs if they’re better
than old drugs that means built
physicians 73 percent of physicians
believe that the FDA uses comparative
effectiveness research and making
decisions
which drugstore proof unfortunately this
is not the case the FDA as our drug
regulator does a lot of good things for
us and they do use a lot of scientific
information but they do not require drug
manufacturers to prove that their drugs
are better than existing medications in
order to get approved and get on the
market their stance is that’s somebody
else’s job somebody else needs to come
and figure out which drugs are going to
get used and which drugs are going to
get paid for so in the United States
what we have are two large payers so to
speak if you want to think about who
pays for drugs government is one large
payer as well as employers and what
these organizations do is they hire
somebody a middleman to go look at all
of those possible drugs approved by the
FDA allow it to be purchased in the
United States and they came up with
something they come up with something
like this and you’ve probably seen some
version of this in your health plan
right you just all you know about
prescription drugs is here are the drugs
that are covered here are the drugs that
your company your insurance provider
will pay for and you don’t really get
much more detailed beyond whether
they’re a brand or a generic which just
tells you a little bit about what you’re
gonna pay in co-pays the question we
want to ask though is is comparative
effectiveness research being used to
create these lists of cover drugs
because we know it’s not living at the
FDA we know they’re not doing it and we
know every other country in the world
uses this data to figure out what’s best
let me show you a tool developed by this
research community to help us visualize
how valuable this approach can be this
is just a simple plot but what we can do
with this research is we can look at
measures of effectiveness so for example
how well the drug works can go here on
the horizontal axis so right good left
bad we can also look at side-effects so
more side effects up bad fewer side
effects down good and now you can see
again compared to what we always need to
ask that question in healthcare it could
be compared to nothing it could be
compared to another drug but compared to
something drugs that are more effective
and have
your side-effects no-brainer those are
really good drugs and really high value
conversely drugs that are less effective
and have more side effects another
no-brainer those are not very good and
look we’ve got two options that are
significantly better and understandably
there’s another category where you have
drugs that are more effective but also
have more side effects so they’re what
we need is more information now is when
we can start to look at cost so let’s go
back to that list of covered medications
that I showed you
now that list is an actual real list
from an insurance plan so I decoded all
of the names but this is really this is
true and what I’m showing you here is
actual comparative effectiveness
research for these medications and what
they do is they treat blood clots in the
legs and the lungs which you may need
after surgery for example the first
thing to note is that there are more
medications than are covered the second
thing you may want to point out I want
to point out is that look at how they
spread out across the chart some are
good some fall into we’ve got two drugs
that fall into that good category we’ve
got quite a few up there that have more
effectiveness but also more side-effects
so if we look at the medications that
are hypothetical drug plan but real drug
plan actually covers what we see is kind
of interesting so they cover the
standard of care drug G they’re in the
middle they also cover the best drug
drug a it’s great news but what about
drug B it’s got more effect more
effectiveness but it also has more side
effects so now let’s look at cost I’m
finally coming to the topic I promised
you I’d want to talk about but I want to
if you’re confused so am i and so were
we
when we looked at this data but what
you’re seeing is true drug B on the
market is ninety five dollars it’s nine
times more expensive and yet it’s less
effective and has more side effects than
drug a what should be also startling is
that drug G there in the middle less
effective more side-effects
why is it the same cost as a drug that’s
actually better for you
what’s clear when we look at
prescription drug costs through the lens
of comparative effectiveness research is
that this research is not influencing
decisions in the United States that in
turn influence you and decide which
medications you will have access to
through these lists of covered
medications so someone somewhere in our
[Music]
this is another difficult subject how do
we figure out whose miss incentivized
well one way we can do that admittedly
it’s complex but one way we could do
that is we can look to see who – who –
pharmaceutical manufacturers incentivize
who they’re the ones that are trying to
sell their medications and get them on
the market maybe if we look at where
they devote their dollars we can start
to figure out who might have a miss
incentive well if you were to ask around
and maybe some of you are thinking of it
it’s got to be all those ads we see on
TV right bombarded with them here’s the
data pharmaceutical company spent six
billion dollars on those ads you see on
TV but what they spent in rebates and
discounts to get their drugs listed on
those covered medications lists and to
get them sold was a hundred and fifty
billion dollars so if you thought it was
ads this this influencer is 25 times
more influential even if you don’t know
who they are so the it’s unclear exactly
where that hundred and fifty million
dollars goes but
we spend about four hundred and fifty
billion on drugs so that means that
one-third of what we spent went to
wherever whoever these companies are and
industry experts expect that that is
largely middlemen these are the same
middlemen that create those covered
medication that Lowe’s those lists have
covered medications but who are they why
are they so influential it turns out
these middlemen are not really middlemen
they also own most of the pharmacies in
the United States that’s why they’re so
influential because they not only get to
control which drugs are covered and
which drugs you end up using but then
they also get to turn around and sell
you those medications and this is pretty
simple if you’re a pharmacy do you want
to sell an $11 medication or a $95
medication comparative effectiveness
research is an incredibly powerful tool
and it’s everywhere and we can use it to
harness and get more value out of our
health care who can help us do that is
it Pharma well we want them to do more
of these studies but at the end of the
day if their drug is worse than their
competitors they still want to sell it
so we don’t want them owning this
conversation what about middlemen we
they’re supposed to be doing this for us
but if you rewind 20 seconds you’ll see
why actually at least in their current
incarnation they’re not the greatest
people to bring this forward government
is a solution for some countries it may
or may not be a solution in the United
States
what about employers employers are best
positioned to harness the value of
comparative effectiveness research and
it’s because most employers don’t
actually buy insurance they actually
become insurance companies and that
means that they’re the ones actually
cutting the check for the total cost of
prescription drugs on your behalf what
that means is that they now have control
and in fact many employers independently
as well as part of large consortiums are
starting to say hey we have ceded far
too much control to middlemen and we’re
not getting the return on having given
that control so they’re taking it back
and they’re using evidence-based tools
such as comparative
activeness research to build you better
health plans now what about you
here’s some more data you unfortunately
only pay for about 18 percent of drug
costs it turns out government is about
42 percent and employers about 40
percent so it’s tempting to look at this
data and think you can’t really do
anything about it
but wait it’s your tax dollars that fund
Medicaid and Medicare and it’s actually
your lost wages because employers have
to pay so much for benefits they can’t
give you more salary increases so you’re
actually subsidizing
all of this prescription drug costs
maybe not directly but you are the most
important influencer in this decision
and the most important thing that you
can do is educate yourself comparative
effectiveness research is publicly
available published by nonprofits and
universities it’s out there get become
aware of it and learn about this tool
and then go ask questions if you’re in a
self-funded company ask your HR
department hey how did you build our
health plan if you get your benefits
from Medicaid or Medicare talk to your
congressperson and ask them the same
question our pharmacy system is not an
organic system we developed it as people
so at the end of the day we as people
are the ones who need to fix it thank you
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