Live from Interphex: The impact of healthcare reform on pharma, biotech

NEW YORK - Diverging FDA and pharma operations objectives is one likely outcome of the recently passed healthcare reform legislation. That divergence is likely to be felt in drugmaker's manufacturing operations at least as much as in other drug business functional areas.

So goes one vision of the effect of healthcare reform on the biopharma industry. An Interphex keynote panel yesterday hashed out the topic, led by Chris Matthews of MSNBC (pictured, top right). His entertaining take on the politics behind the legislation ended with a declaration that, going forward, "the politics of healthcare reform are murky."

He sees both Democrats and Republicans winning and losing in the fallout. For Congress, "implementation will be tricky," he says. "And they'll be watching the pharma industry."

Matthews's talk preceded a panel discussion that steered the healthcare reform topic to the pharma manufacturing level. The panel included consultancy and legal perspectives that were offset by a drugmaker's perspective.

Keynote panelists (l-r): Mike Mawby of Novo Nordisk, John Engel of the Engel & Novitt law firm, moderator Laura Bush of BioPharm International magazine, and Matthew Hudes of Deloitte."Cost and operational excellence are about to become a pharma industry priority in a way they haven't before," says Matthew Hudes (pictured, far right), of Deloitte's life sciences and healthcare practice. "Volume is going up, price is going down. You have to reduce manufacturing costs," he says. "It's a big issue."

Chief among the cost-reduction options available to pharma manufacturers are quality by design and lean manufacturing principles, says John Engel (pictured, left center), managing partner at law concern Engel & Novitt. Such tools will help manufacturers better define processes and cost of goods for use in pricing decisions.

Engel notes, however, that "the FDA is looking at updating manufacturing" in its approval and monitoring efforts. The regulatory objective is therefore different than that of manufacturing: drugmakers are focused on cost containment and operations efficiency, while the regulator watches manufacturing technology advances. "They are not necessarily taking the same approach," he says.

As a result, says Engel, it's more difficult to implement manufacturing changes now than it's been before, and he expects it to remain that way in the years ahead.

But at least one drugmakers sees things differently. Mike Mawby (pictured, left), chief government affairs officer at Novo Nordisk, says the company "has been implementing new processes all along." And he describes such efforts in a matter-of-fact way, implying that process implementations and the difficulties accompanying them are all in a day's work.

Mawby also says that as Novo Nordisk tends to its currently exploding diabetes-treatments business, it is building facilities in China and is in discussions with India and Brazil. These facilities are "lean from the outset," he says. "That's just something we're going to have to do." - George Miller

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