the diagnostics space, where the agency has weighed possible changes to the regulation of genomic laboratory tests.
There are very few disease areas that haven’t experienced progress or potential progress, McClellan said. But that progress does not always translate into lower healthcare costs, said McClellan, who also served as administrator for the Centers for Medicare and Medicaid Services from 2004 to 2006. While new technologies introduce new ways to help patients, McClellan added that evidence suggests that new medicines and treatments addressing unmet medical needs actually increase healthcare costs. That’s contrary to other industries, where innovation typically reduces costs. The technologies that enable us to live longer and better lives are expensive, he said.
Some of the factors driving healthcare costs come from outside the life sciences industry. Deficiencies in education, early childhood development programs, and social services all affect healthcare costs, McClellan said. Spending on these services has gone down, contributing to growing healthcare disparities that can’t be resolved by legislation such as the Affordable Care Act.
“It’s not because coverage doesn’t do any good,” McClellan said. “It’s because other things seem to be making a bigger difference.”
One way to address rising costs is by identifying incentives that reward high-value care, and then creating different models for reimbursing for that care. Some pharma companies have already started embracing such approaches. As an example, McClellan pointed to Merck (NYSE: [[ticker:MRK]]), which has a contract with health insurer Aetna (NYSE: [[ticker:AET]]) that pegs the reimbursement for its diabetes drug sitagliptin (Januvia) to patient outcomes. But these new approaches mean “changing the way we pay, and probably changing the way we regulate as well,” he said.
New models for delivering and reimbursing for care mean collecting and analyzing more data, and it’s here where McClellan and Califf expressed common views. Both cited the opportunities that big data analytics capabilities bring to assessing the safety and efficacy of new products in clinical trials and in real world settings. These technologies can help gather what Califf described as “higher-quality evidence,” which can inform the regulatory decisions made by the FDA, as well as the research and funding decisions made by companies. If companies and payers can’t properly assess the risks and benefits of medical products, headaches will ensue once those products reach the market.
“We can’t afford a system where we have one set of studies to get a product to market, and a whole different set of studies to get people to pay for the product,” Califf said.
Photo by Flickr user cpradi via a Creative Commons license. Photo has been cropped to fit Xconomy publishing system standards.
