The health care industry is constantly evolving and reform efforts stem from what seems like every angle in the current political climate. During his keynote address at PBMI’s 2019 National Conference, Thomas Price, MD, physician and former United States Secretary of Health and Human Services, stressed the importance of politics in everything we do.
“I was an orthopedic surgeon. I loved taking care of patients and I loved the operating room, but I found a love for public policy that is just as important,” said Dr Price, the third generation in his family to become a physician.
Dr Price recalled memories from childhood, going on “rounds”—which were actually home visits—to patients with his grandfather. “I believe this is what allows us to gain the understanding of the highest quality of care we can provide,” referring to getting to know and earn the trust your patients.
“I started a solo practice that over a period of 20 years grew into one of the largest, private, nonacademic practices of orthopedic surgeons in the country,” said Dr Price. “And throughout that process, recognized that were a whole lot of people, making a whole lot of decisions about what I could do for and with my patients in the public policy arena, who didn’t have a clue what they were talking about or doing.”
It was then that Dr Price said he found a calling to run for office so that he could bring his expertise to the public policy side of health care and help find ways to improve the system.
A common question pointed to Dr Price and others in public policy positions is what they are going to do to fix the health care system.
“I’m always amused when I’m asked this question because it belies the situation in which we find ourselves. We don’t have a health care system. We have systems,” Dr Price emphasized the plurality of US health care offerings. “We have Medicare for seniors, Medicaid for those in the lower end of the economic spectrum, employer sponsored health plans where the majority of people get their coverage. We have the ACA[affordable care act], the exchange market, the children’s health insurance market, small group market, veterans health service, the Indian Health Service, the list goes on and on.”
Consumers often wish that the transition between each of these systems would be smooth and flawless, but Dr Price recognized that that is rarely the case. He empathized with the pharmacy benefit manager (PBM) audience in that there is often a disparity in what consumers want and what is feasible.
“Trying to move forward in health care is a challenge, and I appreciate the work that so many of you are trying to do to make our health care system work,” the four-term Georgia senator emphasized, “I know that the inertia in our system
tends not always move in a positive direction, therefore your work is that much more pivotal.”
Dr Price spoke on several topics, focusing on pivotal subjects affecting the PBM industry such as the industry’s reputation, the future of rebates, drug pricing and cost transparency, and the roles to be played moving forward.
“The opportunities we have in our systems right now for efficiencies, improvements, and savings are almost limitless. The work that [this industry] is doing in that arena is incredibly important,” said Dr Price, but noted that there are areas that need improvement.
“Money in health care is massive and it’s where a long of tension and angst comes from,” said Dr Price. “We spent over $3.8 trillion in total in health care, over $10,000 for every man, woman, and child,” from Medicare, Medicaid, local health care, etc. Pharmacy spend is about 10%, $350 billion a year.
Budgeting, at the federal level, is not a simple task and the various arenas of health care are often demonized in the media. Dr Price mentioned that it seems like there is a new poster child for the “evil sense of the pharmaceutical industry” every other month. The current administration has gone so far as to say that the pharma industry is “getting away with murder” through high costs and lack of access.
Dr Price quoted US Secretary of Health and Human Services, Alex Azar, calling for “radical reform to how our system works,” and calls it a “perverse system.”
“The threat to your industry and your activity is real and I urge you not to minimize it,” said Dr Price. “The public believes that there is little to no competition in this industry, little to no regulation, and little to no transparency.”
The administration’s blueprint to reform the health care industry released last year focuses on reducing list prices, negotiating Medicare plans, cutting out-of-pocket costs, and more. The PBM industry has a role to play in achieving the positive reform the administration and consumers are looking for.
“PBM’s have a history and responsibility of creating novel solutions and I would urge you to get creative and take on these challenges aggressively. It is important to address the changing business model in which we work and see what can be improved. The industry needs your help.”
Dr Price encouraged the PBMI attendees to deeply ingrain themselves in the goals that the blueprint laid out and find creative solutions for controversies in the pharmaceutical industry.
“From a legislative standpoint, I wouldn’t be surprised if rebates were done away with. The threat is real and I know what that means to the PBM arena,” said Dr Price.
He also spoke of an industry-favorite buzzword, transparency. A frequent complaint of big pharma is the lack of transparency to consumers on drug pricing, and an overall lack of transparency between various systems of health care. “There is a general sense that the pharmaceutical industry is cloaked in darkness…Anything you can do to provide more information and have a receptive ear, will improve this area,” urged Dr Price. Increased transparency may help mitigate some of the struggle this industry is seeing.
Value-based purchasing, reference-based pricing, and bundling of reimbursement and pricing are all areas that Dr Price mentioned he believed are worth time and effort to expand upon. “Value-based bundle purchasing and reimbursement is one of the most challenging areas, in my opinion. Two patients with the same diagnosis will have a different assessment of quality of care vs cost.” These two patients ought to be treated differently based on their diagnoses but the care is complicated and in turn, the value of the care varies patient to patient.
“In its pure form, fiduciary status for PBMs would require that PBMs legally act in the best interest of the patient—sounds wonderful, doesn’t it?—but the problem is that the legal liability that PBMs and whole supply chain would face would be an existential threat to the industry. I don’t see how the federal government could provide a regulatory oversight that would adequately monitor this.”
“We seem to have lost the ability as a society to have sober, calm, reflective, responsible conversations about anything controversial,” said Dr Price, referring to the recent senate financial committee hearing with the seven largest pharmaceutical CEOs. “The hearing is coming for the PBM industry and with it, change.”
Dr Price emphasized to the PBMI audience of the scale of innovation required to satisfy the consumer population, and policymakers, while maintaining the integrity of what the health care industry is created for.
“Solutions may not seem readily apparent, but I am an eternal optimist and one of my favorite quotes from Winston Churchill is, ‘Americans always do the right thing, after exhausting every other possibility,’” said Dr Price. “I believe we have about exhausted every other possibility in the pharmaceutical industry so it is time to work together and do the right thing and find solutions.”—Edan Stanley