Austin, TX — Last week at the America’s Health Insurance Plans (AHIP) 2017 Institute & Expo, Lilly’s CEO Dave Ricks co-led a general session with Harvard Pilgrim Healthcare’s CEO Eric H. Schultz. The presentation, entitled Balancing Innovation and Affordability of Prescription Drugs focused on how essential both innovation and collaboration are in fixing our country’s healthcare system. 

To start, Ricks outlined three major issues that need to be addressed:

  • “Biopharmaceutical companies are turning out an unbelievable stream of new therapies, allowing us to do more for patients than ever. But our current system is struggling to pay for these breakthrough therapies.
  • We’re out of money for health care in this country. Collectively, we spend $3 trillion annually on health care, which makes the health care industry three times larger than the entire banking industry.
  • Too many Americans are facing unaffordable out-of-pocket costs, including the costs of prescription medicines.

He believes that “the biopharmaceutical and health insurance industries are well positioned to help modernize our health care system so it improves patient health and moderates costs,” and he’s confident that value-based arrangements between pharmaceutical companies and payers are the key. In today’s fee-for-service model, payments driven by the number of units sold, but value-based arrangements, the actual health outcomes drive reimbursement. That way, pharmaceutical companies are rewarded for innovation, and payers can tie payments to improved outcomes.

Why This Matters —

In this age of accountable marketing, it’s exciting to see similar concepts emerging across healthcare. As value-based medicine continues to evolve, stakeholders throughout the industry will need to learn new ways of working.

About the Author:

Drew Beck has spent his entire career in healthcare — from direct patient care as an EMT in college to countless roles in pharma sales and global marketing for leading life science companies including Eli Lilly & Co. and GlaxoSmithKline. He is currently a leader on the Syneos Health Insights & Innovation team, a group charged with leveraging deep expertise in virtual collaboration, behavioral science, trends-based-innovation, custom research and global marketing insights.