Kaiser CEO pens powerful op-ed on drug costs, calls for new pricing model
- Bernard J. Tyson, chairman and chief executive of Kaiser, pointed out that most parts of the healthcare industry are doing "better for less"—and that it's time for biopharma to follow suit.
- Tyson also makes the point that there are truly innovative drugs being developed and approved, but that if the drugs prove inaccessible for financial reasons, the innovation is ultimately meaningless.
- According to the editorial, specialty drug spending in the U.S. is expected to hit a staggering $400 billion by 2020, up from $87 billion in 2012.
Using the new class of PSCK9 inhibitors for treatment of hypercholesterolemia and the new hepatitis C drugs as examples, Tyson wrote that these drugs are very expensive and could threaten the sustainability of the healthcare system in his Forbes editorial. He cautions the pharmaceutical industry that other industries that failed to change when necessary, even during good times, became "footnotes in history."
Citing the new hepatitis C drugs as an example, Tyson pointed out that when payers were forced to make tough decisions, they chose to reserve treatment for only the sickest patients—something that would have been unthinkable in the past.
He also delved more deeply into the PCSK9 phenomenon, noting that it had the potential to be one of the greatest financial successes in the history of the industry. Nonetheless, the bigger takeaway is that these drugs could end up costing anywhere from $50 billion to $200 billion per year and seriously put the healthcare system at risk as payers attempt to cover costs. Other classes that Tyson targets in his op-ed are cancer drugs, drugs for rare treatments, and autoimmune drugs. These drugs, which all fall into the class of specialty drugs, come with staggeringly high prices. And together, they could compromise the financial integrity of the system.
So what's to be done? Tyson notes that at Kaiser, he and his colleagues "see the entire healthcare dollar," which puts them in the position to assess the outcomes of new drugs and their costs over time. Kaiser has put a system in place to track the efficiency and real-world impact of these drugs.
Meanwhile, Tyson is calling for a large-scale re-examination of pricing and long-term sustainability. The question is: Will biopharma be sympathetic to his arguments?