PwC: Opioids and Medicare pressures will challenge industry in 2018
The healthcare industry has been in a state of turmoil this year, with a new administration creating uncertainty around the Affordable Care Act and taxes, and drug pricing remaining controversial.
At the same time, natural disasters have created problems for the supply chain, and discord in Washington weighs on government policies like Medicare.
This electric environment has also been the backdrop for a new age of gene therapy and artificial intelligence.
Consulting firm PwC Health Research Institute's twelfth annual report sets out major challenges ahead in 2018 for industry players, including pressure on government programs and how changes in technology will play out. Their solutions focus on three themes.
"We’ve put the issues in three main buckets: the first being cross-sector collaboration, the second being strategic investment and the third being creating efficiency. And I do think they all really intersect well with each other," said Karen Young, U.S. Pharma and Life Sciences Leader at PwC, in an interview.
For more of BioPharma Dive’s interview with Young, check out the video below:
Young noted in the interview that the issues in the report help PwC "frame out" strategy and topics that it needs to address with clients across the continuum of care, from hospitals to pharma and biotech companies, throughout the coming year.
For example, under the banner of cross-sector collaborations, Young and her colleagues point to the opioid crisis showing little sign of abating.
"We’re continuing to see a lot of demand, not only from patients and communities, around how to solve the crisis of the opioid epidemic, but we’re seeing that from government, we’re seeing it from manufacturers, we’re seeing it from device makers, as everyone is trying to see what is their role in this overall community," said Young.
Opioids have become a leading cause of overdose and death in the U.S. in recent years, with many patients starting on prescribed drugs for acute pain and then advancing to illegal substances like heroin.
PwC suggests that industry stakeholders work together to prevent easy access to these drugs, as well as make them less abusable, while creating treatment options for those already struggling with substance abuse problems. One potential solution is to bring together data from public and private sectors to better understand how people are obtaining drugs, what populations are abusing them, and how best to provide treatment.
Another area that will require cross-sector collaboration in the coming year will be the controversy over drug pricing.
The issue clearly impacts all players, from patients to payers to drug manufacturers, and will likely require some sort of government intervention to find a solution, according to PwC.
"No longer content to merely ask manufacturers or providers to report their costs, states are considering and passing new laws to directly control prices and shine light on cost changes," noted the report.
Several states have made moves to make pricing more transparent, but the new legislation puts greater requirements on manufacturers, which will have to track different regulations across state lines. Indeed, the pharmaceutical industry is fighting some of the efforts in court.
With the aging of the baby boomer set, the burden on Medicare is rising. The number of customers taking advantage of private alternatives like Medicare Advantage is growing as well.
This trend is intensifying the competition for insurers and pressure to comply with government quality ratings is putting the squeeze on insurers to create more operational efficiencies.
Making strategic investments that improve the customer experience will go a long way in setting apart companies from their competition. One such way to do so is to invest in digital tools that will help patients, especially as seniors become more tech savvy.
Further adding to the chaos for healthcare has been the Republican bids to repeal-and-replace the Affordable Care Act.
While those efforts failed in recent months, the Trump administration is chipping away at the law through executive action and other regulatory powers. Further, the GOP may repeal the individual mandate as part of its tax reform working its way through Congress this month.
Industry leaders need to prepare for continued uncertainty and policy changes, said the PwC report.
The consultancy recommends making strategic investments in local advocacy efforts and bolstering work in compliance.
Strategic investments in areas like technology can spur greater efficiencies. Technology that we already using today like social media and video conferencing can help companies and providers improve the patient experience.
For instance, the pharma salesforce is already reaching out to doctors using digital tools more than ever before. The use of digital marketing has allowed physicians to be more flexible about the ways they obtain data and has changed the way sales interacts with providers.
Beyond digital tools, the advent of artificial intelligence could be a game-changer. AI is already being used to help read radiology scans, allowing doctors and hospitals more time to interpret the data and better assess how to treat patients.
Meanwhile, pharma companies have started using AI to create more clinical trial efficiencies. Companies can now use algorithms to look for patterns in clinical trial data that help root out misconduct at trial sites and find when data has been input incorrectly.
PwC’s Young notes that AI doesn’t get tired or take sick days and therefore can work at a more rapid speed than its human counterparts. The technology has broad applications and will likely be used in the future for everything from recruiting patients for clinical trials to patient support programs post-marketing.
"AI is certainly one of our predictors for 2018 and it will certainly continue to grow," said Young. "What we’re seeing is that every company has entered into that market in some capacity. One way is to drive efficiency. If you can get a robot to channel through forty transactions that takes a human two days to do; a robot might be able to do it in one minute."
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