Castellani Talks Biopharma’s Future

Castellani Talks Biopharma’s Future

04.29.13 | By

The question of the day is: what can we do to meet the enormous healthcare challenges ahead?  Truly, it’s the question of the decade.  The challenges are real.  The clock is ticking.  What we do today, tomorrow, next year and beyond to set sound policies in Washington, state capitals and around the world will mean the difference between solving problems and simply coping with the onslaught of disease.

What we do and how we do it are big issues and they were the focus today at Rutgers’ Business School in Newark, New Jersey, which hosted a symposium entitled: Trends & Issues Facing the Bio-pharmaceutical Industry.

John Castellani, PhRMA’s president & CEO, was a keynote speaker.  Mr. Castellani urged policymakers, patients and other stakeholders in the healthcare system to build an innovation ecosystem designed to solve long-term health challenges and avoid short-term, seemingly easy solutions that could leave the healthcare system unprepared for the future. 

“The bottom-line is that no nation, no matter how wealthy, can provide innovative healthcare for its citizens unless it values wellness, prevention and disease management at least as much as it values acute care.

“Similarly, no nation can afford to ignore the looming costs of chronic disease like diabetes, hypertension and Alzheimer’s disease by dis-incentivizing investment in the innovative therapies that can help reduce those costs.”

Castellani focused on growing evidence of the value of innovative medicines to both patients and in efforts to limit healthcare costs. Citing diabetes as an example, Castellani noted:

“Uncontrolled diabetes… can lead to many complications including amputations, kidney failure, heart attack and stroke.  These complications are bad for patients and costly. The average cost of amputation surgery is $40,000. A single year of dialysis for kidney failure runs about $83,000. But a year’s supply of medicines that can help control diabetes averages around $2,400.

“More than the cost, however, I hope we can all agree that it is unquestionably better for patients to treat and control their diabetes, than to amputate or endure endless dialysis. And what is true for diabetes is also true in the fight against cancers, heart disease and stroke and many preventable and manageable chronic conditions.”

Castellani underscored how the value of innovative medicines is finally being recognized as a savings to the healthcare system over the long-term:

“After years of work, the U.S. Congressional Budget Office (CBO) now recognizes this important, positive dynamic. CBO updated how it calculates the costs of Medicare policies so that it now reflects the positive impact of prescription medicines on total medical costs. This is big. 

“For the first time, CBO is specifically accounting for the savings from medicines that reduce the need for other costly medical services, like hospitalizations, acute care and long-term care. The new methodology incorporates a 0.2 percent decrease in spending on medical servics for every one percent increase in the number of prescriptions.

“And – while this may seem small –it represents a sea-change in government thinking.  CBO has come around, in a small but important way, to recognizing what all governments must face if we are to avoid pushing the cost of untreated, unmanaged disease down the road. “ 

Castellani concluded by calling on policymakers to avoid solving “short-term” problems by undermining long-term progress:

“To meet the healthcare and economic challenges we face today – both here in America and around the world – we must stop undermining the eco-system needed to foster great science. Instead, we must cultivate that eco-system here and globally.  Our ability to find real solutions for patients in the real world lies in fostering competition and the rewarding of great minds, innovative ideas and advancing technology. “

More on CBO’s changing methodology here.

For full-text of John Castellani’s remarks here. 


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