Achieving a high-value healthcare system has never been more in focus on the global stage than in the wake of the COVID-19 pandemic that has required vaccines to be developed at unprecedented pace and scale and then efficiently distributed around the world.
In its simplest form, high-value healthcare provides the best care possible through efficient use of resources that deliver improved patient outcomes. The focus on the pandemic may be waning but its impact on the industry hasn’t. Prior to the crisis, health systems, drug manufacturers and distributors were already focused on enhancing the sustainability and efficiency of the health care system. For almost every unprecedented global disruption like social distancing, regulatory hurdles and supply chain problems the pandemic triggered, equal if not marked advances were found in short order that are expected to transfer well toward lower costs and better healthcare values and outcomes in the future.
Adoption of digital communication tools increased exponentially almost overnight. Regulatory agencies in conjunction with manufacturers and policymakers streamlined drug approvals.
Strengthening Public-Private Partnerships
The scope of success in combating the virus also nurtured improved communications and partnerships between government and private industry stakeholders.
“Public-private collaboration has been essential in response to the COVID pandemic, and it will be even more critical going forward to getting better healthcare,” Mark McClellan, MD., PhD, founding director of the Duke-Margolis Center for Health Policy, said during a fireside chat at AmerisourceBergen’s annual manufacturer summit, ThinkLive Trade.
In his conversation with Bob Mauch, PharmD, PhD, Executive Vice President & Group President of AmerisourceBergen, McClellan cited AmerisourceBergen’s role in working with the U.S. Department of Health and Human Services (HHS) to distribute COVID-19 therapies. AmerisourceBergen’s network of independent community pharmacies, Good Neighbor Pharmacy, has also played a critical role through the pandemic by allocating more than 3 million doses through its Federal Retail Pharmacy Program partnership to independent community pharmacies nationwide.
“There are challenges in such collaborations, but COVID demonstrated the need for coordination and many lessons learned for how to work together at the local, state, and national level,” McClellan said. “We still have a ways to go in delivering care at home and preventing complications – while our health care system has mounted a heroic response, COVID was a reminder that it is still based on hospital and institutional care.”
Addressing Access and Affordability Barriers
Although the public and many politicians continue to focus on drug prices as the ultimate measure of healthcare costs, they are only a small part of the equation. Net prices for pharmaceuticals declined 1.4% in the second quarter of 2021, and real, inflation-adjusted list prices fell by 0.4%, according to SSR Health. Prescription drugs represented only 10% of the U.S. healthcare spend in 2019 compared to the more than 50% of costs going towards hospital care and physician and clinical services, according to the Centers for Medicare & Medicaid Services.
Despite the current political climate that tends to highlight prescription costs alone, most in the industry agree there are opportunities to improve and reduce costs through care coordination, patient safety, administration of healthcare organization and providers, pricing, and the overuse or inappropriate use of resources.
The answer, both McClellan and Mauch said, is to lean into more public-private conversations and collaborations that propelled COVID-19 vaccines from development to shots in arms in an 11-month period.
“The pandemic has put a spotlight on the tremendous innovation that occurs within the pharmaceutical industry every day to bring critical new products to market. It has also reinforced the value of collaboration among government agencies and supply chain partners, which has enabled the secure, reliable and efficient delivery of COVID-19 treatments and vaccines around the world,” Mauch said. “At AmerisourceBergen, we’re focused on continuing to strengthen our public-private partnerships to support the pharmaceutical supply chain and meet shifting demands, while also engaging policymakers to help shape policies that help ensure more people can access and afford needed treatments.”
Those types of interactions with open and frank discussions that include shared goals will help define what a future, high-value healthcare system should achieve. Early and efficient diagnosis and management, patient safety, patient experience and disease prevention are key elements of cost-effectiveness that will underpin the drive for a redesign of quality care and system analyses that measure patient outcomes on which reimbursements will be based.
Also at issue is the impact of high-deductible health insurance plans that have created an affordability crisis for many in the U.S, particularly in lower income households. Most employer sponsored health plans call for patients to meet a separate deductible for prescription medicines, often based on list price, before their coverage helps out.
Though mostly related to COVID-19, life expectancy in the U.S. fell by a year and a half from 78.8 years in 2019 to 77.3 years in 2020, according to the Centers for Disease Control and Prevention. It was the biggest one-year decline in the country since World War II. The sharpest drop was in Hispanic and Black communities that typically have poor access to health care.
“There are systemic issues where access is a problem,” McClellan said. “And there are issues where you might be able to access a health care system, but you can’t afford to use it.”
To help address those issues, reimbursement models based on outcomes and not unit costs need to be adopted in order to create value for patients, government agencies, payors and manufacturers. Those discussions need to include behavioral economics and designing benefit programs that encourage access and adherence. The kind of collaborative conversations AmerisourceBergen had with government and industry partners during the pandemic have fostered stronger connections for future projects aimed at high-value healthcare targets.
“The pandemic opened eyes to amazing innovation, particularly in biosimilars and how they may help drive down costs in the future,” said David Senior, Senior Vice President of Market Economics at AmerisourceBergen. “But what has also opened up is manufacturers are now encouraged to come to the table with creative ideas and be open about new reimbursement models.”
Despite the polarized political environment, Senior expects the pharmaceutical industry to continue to advance reimbursement models regardless of movement in legislation regarding pharmaceuticals. The high cost of breakthrough drugs—especially in the cell and gene therapy field—are raising concerns about access to innovative but expensive treatments.
“We are recognized for being able to bring solutions to the market,” Senior said. “Our role is to educate policymakers whether it’s regarding efficiency, overall channel economics, supply chain resilience or benefit design, and we are focused on helping mold cost-effective healthcare solutions for patient care and outcomes.”
To learn more about how AmerisourceBergen anticipates supply and demand and the role of distributors in the supply chain please visit: https://www.amerisourcebergen.com/value-of-the-distributor