New PhRMA chief says healthcare system is ‘broken’

By Phil Taylor

- Last updated on GMT

Related tags Medicine Pharmacology Barack obama

The new chairman of US trade body the Pharmaceutical Research and Manufacturers of America (PhRMA) – AstraZeneca CEO David Brennan – has laid out his vision for reforming the “broken” healthcare system.

In his address Brennan painted a bleak picture of the current healthcare environment in the US, saying that the “deepening global economic recession​” had already cost 4.4 million people their jobs “and in many instances ... their health insurance.​”

It's not hyperbole to say that before this recession is over millions more will join the 47 million other Americans who do not have health insurance​,” said Brennan, and he predicted the loss of routine access to physician and preventative care will lead to a “rising tide​” of chronic diseases.

As chronic diseases account for about 75 per cent of healthcare costs in the US this will put added strain on Medicare and Medicaid programs, which have grown from a 1970 level of $365 per US resident - 7.2 per cent of Gross Domestic Product (GDP) - to a forecast $12,000 in 2016.

"That’s an unbelievable and unsustainable 19.6 per cent of GDP​," said Brennan.

Brennan backed President Barack Obama’s view that the US needs reform “that's built on American traditions to meet the diverse medical needs of our people, while ... reducing cost and strengthening the economy.​" Brennan emphasised the need for “quality care with an emphasis on outcomes​,” but cautioned against any reform that would break the strengths of the current system, such as the strong relationship between physician and patient.

Pharma and other stakeholders should explore opportunities to increase racial and ethnic diversity in clinical trials, as part of measures to reduce healthcare disparities.

He also stressed the importance of pharmaceuticals in healthcare, citing studies which suggest that “for each additional dollar spent on newer pharmaceuticals, over $6 is saved in total healthcare spending​.”

Access to medicines for the uninsured and underinsured remains a big problem, and in future coverage needs to include a comprehensive prescription drug benefit. At the same time, the insured are forced to pay considerably more in co-pays on medicines than for other healthcare services, despite the fact that medicines “have remained at about the same percentage of the healthcare dollar for 40 years​.”

To illustrate the co-pay problem Brennan gave the example of an office equipment firm which reduced co-payments for its employees' health plan when they paid for diabetes and asthma drugs.

"The Wall Street Journal reported that the company realised $1m net savings in the first year by reducing complications common to those diseases,​" he said.

Meanwhile, the US Food and Drug Administration (FDA) urgently needs more resources, commented Brennan. More than 50 fast-track review deadlines were not met in 2008 by the agency, at a cost for both patients and drugmakers, which has been blamed on a lack of staff and funds, he pointed out.

An understaffed and under-funded FDA is an agency in crisis​,” said Brennan, adding that PhRMA is “working hard for increased appropriations to the FDA so that it is recognised as a watchdog with a full set of teeth​.” Finally, Brennan warned against complacency, noting that Europe and China are introducing “pro-medical innovation policies​” to challenge the US’s leading position in drug development.

"They are creating strategies to develop the infrastructure and biochemistry knowledge of their people that will make them more competitive over the next 20 to 40 years​, " he said.

The consequence of losing that leadership role would have dramatic consequences on the US economy, he said, given that pharma added $88bn to GDP in 2006 and - directly or indirectly – employs 3.2m people.

"We have an important economic impact on the nation​,” said Brennan.

Related topics Markets & Regulations Globalization

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