I proudly have not attended the JP Morgan Healthcare Conference since 2011 and I couldn’t be happier. Every year I, along with every other person in healthcare, descended upon Union Square to rub elbows, but in 2012 it became clear that it really didn’t make sense for me to keep attending. I keep up with all of my clients regularly. If I wanted to get a meeting with a new prospective client, or a company that could be a great partner for us, I almost certainly have already put in the work previously. Plus, who needs to be in Union Square, paying $100/hour for a couch in a hotel lobby when you can follow all of the action in real time on Twitter! #JPM16 is addicting.
My favorite tweet by far has been from @SFLittleDarlings advertising a special discount to “Kinky Nights” for all #JPM16 attendees. Only at #JPM16!
A close second isn’t just a single tweet, but instead a general theme of condescension to the “uneducated general public” for their uproar over pharma pricing. It seems that most pharma execs buoyed by the inevitable support of their investors for their price increases are ham-fistedly fighting back. A Gilead representative said that drug pricing wasn’t an “actual issue”, just a political talking point. Acorda CEO, Ron Cohen said that “public outrage over drug pricing is an abomination,” “a perversion of reality”. He says that quote was taken out of context, but still… really? Just like Kinky Nights, “Only at #JPM16”!
Similar to the tone deaf Wall Street executives that refused to acknowledge wrong doing in the mortgage crisis, pharma executives are taking a similar stance. Neither group seemed to recognize that times have changed – social media has enabled social protests to have long shelf lives. And the simple reality is that drug pricing IS an issue. Don’t believe me, how about the protestors outside of #JPM16?
Drug pricing is an issue that, as Mr. Cohen rightly points out in a recent LinkedIn post, requires “more intelligent and much wider conversation”. Abominations aside, he makes very valid points in his post, and subsequent responses to comments, that the conversation around drug pricing needs to focus on value. The industry can’t afford to put its collective head in the sand and brush this off as a non-issue. Yes, pharma spends billions of dollars to get a drug to market. Yes, they need to support those efforts by recouping the costs from their drugs. But the conversation cannot stop there.
The public is not their enemy but their client. And their perception is reality. The more pharma screams there is no problem, the bigger that non-existent problem grows. Lack of transparency and understanding is pharma’s Achilles heel and the sooner they recognize that forums like #JPM16 are opportunities to educate and not combat the better. Now is not the time for rhetoric but action.
Lack of understanding by the general public on what drives drug costs is a direct result of a lack of transparency by the drug manufacturers themselves. Advera Health has long championed the concept of understanding the total cost of prescription drug care, establishing the cost of long term drug adverse events for every drug in order to determine its value to the healthcare system and its place on drug formularies. It is not as easy as choosing the cheapest drug based on wholesale acquisition cost (WAC) and trying to convince the public that this is the right and only drug for you. Pharma has been very vocal on the issue that WAC alone is not a proper determinant, but what have they done, other than point the finger at payers, and other critics to prove their point?
It is time that pharma steps up their efforts to help support an unbiased, independent, transparent exchange of information. Developing true safety, efficacy and cost profiles for all prescription drugs.
For too long the industry has been subject to information asymmetry, which has rightfully led to distrust and distain for the companies that make life saving medications. It has created an environment that has fostered rancor among its participants that if not corrected will lead to diminished innovation and stymied cures. The longer it takes for pharma to address the issue, the increased likelihood that the public and medical professional outcry will cause intervention by the government, grows.
It is time for pharma to step up and take control of this situation. Prove to the non #JPM16 public that profit is a good thing but so is safety and value. Promote understanding of the complete lifecycle of a prescription drug from design to clinical trials to post-marketing in real world populations. Do it not with marketing and commercialization in mind, but do it because if you don’t, someone else will.
To learn more about how Advera Health is contributing to the value conversation, contact us.
Jim Davis, EVP