Joseph Newhouse, Alison Taunton-Rigby, Janet Woodcock, David Nexon & Jack Schuler
The Innovations in US Health Care panel explored the tensions between regulation and innovation in the health care industry around drug and medical device industries
Kennedy School Professor Joseph Newhouse opened the panel noting the huge gains in life expectancy throughout history. In the high 20s during the Roman Empire, life expectancy in the US in 1900 it stood at 47 years, by 1970 had raised to 70 years and today stands at 77 years of age. Newhouse said the impressive gain of life expectancy in the 20th century was due in part to the development of drugs, in particular medications for high blood pressure and cardio-vascular disease.
And while innovation is clearly important, he noted, the high cost of drug development is due in part to the regulatory regime in place, limiting such innovation. The focus of the discussion and the panel explored the tensions between innovation and regulation in the health care industry.
David Nexon of AvaMed, whom Newhouse noted the National Journal had dubbed the "Dean of Health Care Policy" in the Senate, when he worked for Senator Ted Kennedy, said that much of the economic value and gains we have enjoyed in recent history have been due to people living longer. This should underline the importance of medical innovation, he said.
Nexon also remarked that there is another form of “regulation” - the implicit regulation by health insurance companies. The medical device industry, which is extremely competitive, is on the verge of a breakthrough and what Nexon called a “flowering” if the conditions are right.
Nexon noted that part of bringing devices to the broader market is negotiating the payment rate with the insurer. “The biggest concern is what will happen to innovation in a cost-containment atmosphere.” Before you can even bring it the market, you have to show that it is cost-effective before you are able to raise capital, he commented. “Our reiumbursement system can also be a barrier for innovation.”
Panelist Alison Taunton-Rigby of RiboNovix, represented the biotech industry and outlined the source of the costs in bringing drugs to market. She noted the rising costs of health care in particular drugs. People often say: “How can such a little pill cost so much?” she observed.
However, Ribgy-Taunton noted that it costs $1.3 billion dollars for each drug to get to market place and not all break even. The phase 1, 2 and 3 of clinical trials normally run sequentially. Then companies need to learn how to actually make the drug and then there may be animal testing. Roughly $100 billion dollars is spent on innovation with only 15-20 new drugs ever making it to market.
Drug development has gotten more involved, Rigby-Taunton said, “as we are dealing with much more complex diseases. And by getting longer they get more expensive….Every drug that gets to market place has to cover costs of the ten to twelve drugs that fail.” There is a need, she said to shorten the time and improve success rate.
There are some changes that could affect regulation. Changes in clinical trial design, for example, which can help find the failures early. That can happen for some drug candidates, using very small doses, give some volunteers to get early information, she said.
Another development is “proof of concept” clinical trials. If we can understand on a molecular level what happens in disease and if – if you can test that early, such does this molecule even bind in the way we want it to, she said, costs could be reduced. Another development is adaptive trials, where statistical modeling is used to analyze data as it becomes available and clinical trials are modified as you go.
Drug discovery is a long process said Taunton-Rigby “Yes. Americans are paying for it because of the price controls in other countries. Industry has to work with the regulators.”
Janet Woodcock of the FDA noted that with the recent FDA act, there is a more active presence in post marketing regulation. This was not the case 30 years ago, but now Americans rely on more and more drugs to manage chronic disease. Congress recently added new authorities, such as the ability for the FDA to mandate change label changes, and to add additional clinical trials if necessary.
The new amendment allows us, said Woodcock to review some applications when they are submitted and established, the Reagan-Udall Foundation 501C-3 non profit – a first for the regulatory agency -- that will focus on education and training. It may also have partnerships with other institutions that could extend to some public private partnerships.
The FDA is also trying to enable some innovation to happen. The Critical Path initiative is designed to ease the cost by focusing on the science of development. “The way you develop [drugs] has not been innovative,” commented Woodcock, in part due to the industry secrecy. Woodcock called for new public-private partnerships to spur innovative approaches and cross industry collaboration.
- Miranda Daniloff Mancusi
|
