Health Care at the Forefront

I'm just back from a trip to Bethesda, Maryland and Washington, D.C., where Health care issues are front page news each and every day. Last night ABC had a one hour special featuring Oboma as he answered questions from a group of people at the East wing of the White house . It was really interesting and I think he spoke very clearly about the challenges to this reform. But, I was left thinking about how this issue is not a US issue , it is an issue facing virtually all countries. Here in Canada our Industries and governments are sharing in the pain. provincial budgets are hovering around 50% going to health care. Corporations, organization , unions, and private payers are all struggling with the rising cost of drugs. There does not seem to be any sort of Federal direction on reform and the provinces are individually dealing with the public side of things .

Now just recently, at the 2009 Western Premiers’ Conference , the premiers announced they were taking action on Pharmaceuticals and forming a buying group. So It would appear that they will tender for drugs which will increase competition between the Generic companies and now the Brand companies as well. So we will have a large public buying group out west, then the tendering in Ontario and most likely Quebec These three buying groups would represent over 90 % of the public drug spends in Canada. Unfortunately , Atlantic Canada doesn't seem to have moved in this direction yet but perhaps soon. In any event, they will remain a small piece of the puzzle and most likely to see higher prices than with the other larger groups.

So, what about the Private Plans that are actually footing a larger portion of the drug spend across the country? What will these changes mean to them? Most likely higher costs and as we have seen in Ontario , two prices for a particular drug. One price for the public insurance and another higher cost for third party.

Will the Plans react to this? Perhaps. There is an initiative developing in Atlantic Canada that is gaining momentum. But more on that later.

Another interesting , development is with GM and Chrysler. They have their service provider de-listing the generic versions of the following drugs.

Zocor, Vasotec, Fosamax, Neurontin, Zoloft,Diane-35, Adalat-XL, Zithromax.

They will be covering the brand drugs only here. So it is reasonable to assume that a deal was struck for better pricing of these products. It is unclear if the deal is with the insurance provider or with the individual companies. This move has major implications for the pharmaceutical industry , plan payers and insurance.

This is similar to what an Atlantic Canada based provider attempted to do with one pharmaceutical company last year but the attempt failed with pressure from several groups. This move may be smoother as it involves more than one pharmaceutical company, a need for cooperation by the pharmacies due to GM and Chryslers economic position and the sheer size of the business in the Ontario region.

Dependent upon how the deal above is structured, it gives the Brand companies stronger ties with the payer groups, allows them to better manage loss of patent, increases competition directly with the generics. But, It also gives them the opportunity to better manage their core business in the Physicians office.

If one manufacturer is supplying both the Patent drugs and off patent, and is also directing the physician education and marketing to the new products, they then have even more control over the supply chains. If GM and Chrysler don’t make a concerted effort to educate physicians to help then nothing has changed. The Pharmaceutical companies will educate the physicians that they can now get this new product as they just listed it directly with GM. Or help them walk through the process required to have it covered. It points to need of having a voice for GM and Chrysler and their employees directly involved with physician and employee education. Now is the time to initiate this.

No more free Samples

If you were about to purchase a new vehicle, you may want to test drive a number of cars to see which you liked best , felt the safest , liked the gas mileage, had the smoothest ride,  wanted a hybrid, etc.  Then you decide and with the assistance of your financial institute you make your purchase.   Just imagine, instead of being able to test drive a number  of vehicles, you are automatically directed  to test drive only the newer expensive models. If you want to try a less expensive model , you have to go down the street and you have to pay to try these models.  To make matters worse, these models have foreign names that you find confusing .  In fact the dealer may not even know the names!  

Nowadays, your choice of drug may cost as much as a new car over the course of several years.  Or in some case in just one year. 

Well, there is an article on Plos Medicine with the above title , you can click here for the link.  It makes the case for eliminating pharmaceutical samples or even vouchers from physicians offices.  I feel this is too big a change and one which may never occur.  One area not explored by this story is to actually increase the sampling to physicians.  If you read the article this sounds like a wild idea, but, consider that the article talks about samples that are the higher priced new drugs with relatively little number of studies .  So, what if there were samples of drugs with huge volumes of data behind them and that they were lower cost.  Now the physician would have to choose... Do I (A) write this drug that is being marketed by the industry  or  (B) continue to write this product that I have learned so much about.  I know its safety profile and efficacy and can leave the newer agent as my second choice or even third choice.  If evidence is provided to show the new drug does amazing new advances then the Physician may consider it.   

Here in Atlantic Canada  we have tried this very thing in our projects and have had great success with physicians and local pharmacists  but have been met with significant push back from some areas you never would have guessed.  We used a voucher system through the pharmacy to obtain the lower cost meds.  Physicians like the approach and so do patients.  A much larger trial is needed now.  

update

More charges laid in alleged Ontario drug reselling scheme... Canadian Press 

Travel

I had a very interesting and productive trip recently to Saskatchewan and had the opportunity to hear the deputy Minister of Health , Dan Florizone speak about their "Patient First Review " program.  He focussed on the difficulties of running the health system and the specifics to wait times within the system.  He made a humorous analogy to opening three restaurants (the only three in town) and waiting in line to get a table.  It really was an effective way to demonstrate the complexities and issues with wait times.  He cited lack of communication and respect as a major barrier and an abundance of administrative duties as some key areas. They recognize that it is the Patient that actually experiences the full process from beginning to end and they are trying to learn from this.  Fixing one area which may cause disruption in another is not the answer.  They are still struggling to make changes but certainly they appear to be seeking answers. 

Charges in Ontario for Drug resale plot

Yesterday , the Ontario government announced that charges were being laid against a number of Generic companies, pharmacies and drug wholesalers.  There is a good story at the Star.com   This once again points to the need for changes in the way we deliver pharmaceuticals in this country.  Transparency is necessary if we are to deliver the best value.  The rebating system in the US causes them to have the highest brand name pricing in the world and these rebates of generic drugs have the same effect here.   

The Power of Personal Contact

In this age of twitter, facebook, text messaging, e-mail, media, and all sorts of IT and high tech ways of communicating with one another, what has happened to face-to-face contact?  Who, in business still uses this ancient method to communicate with clientele or customers and is it still effective?

 

In sports, it is about the personalities.  Just look at how hockey has Wayne Gretzky and now Sidney Crosby. One could say they are the face of hockey. Most of us would love to meet them and for those fortunate enough to do so, it only reinforces their perspective and love for the game. The clubs know they have to do things for the fans to keep the sales up at the gate, and it is why, early on, in the careers of hockey players, programs and awards are set up for community involvement.  Wayne or Sid are well versed in Media and fan support techniques and so are their fellow players. These fan face-to-face exchanges are an integral part of sports.

 

 

Love them or hate them, politicians are experts at the art of personal contact.  If this is an election year in your province, you certainly will see efforts by the political parties to take every advantage of getting in front of a camera, a podium, or a group gathering.  Door to door contact is still a big undertaking even if the candidate themselves can't get out. Representatives will knock at your door and ask for support. In an effort to sway voters, these face-to-face contacts are as much about listening to the concerns of the electorate as it is about getting your platform across.  This is because often voters have not all made up their minds and just want to be heard by the politicians.  Some of these folks will vote based on the candidate that seams to listen the best, or said the right response to the concerns.  It is often the defining moment in how a voter will vote.  In the American election last year of President Obama, this face-to-face, eye-to-eye contact was visible each and every day. Obama certainly used the Internet as an effective tool to augment his efforts but it was his face-to-face efforts, and on the ground support where they really added shine.

 

One industry that most people know little about is the Brand Pharmaceutical Companies.  This group has taken the art of personal contact to levels that perhaps Obama could learn from.  The marketing efforts of these companies utilize, all of the typical media, Internet, and other support initiatives but the power of personal contact is the cornerstone to their success.  The industry may have pushed this contact to the extreme in the last few years which has lead to a bit of a backlash by physicians, academics, and politicians. They essentially had so many personal contacts that physicians began to see fewer representatives.  However the industry is adjusting to more acceptable levels, and make no mistake about it, personal contact remains the focus of these companies. They implement numerous face-to-face, eye-to-eye contacts with the physician to build business.  After all, it is the physician that will cast the vote (in this case a prescription).   These contacts are positive in nature and the companies listen to the needs of the physician much the same as the politician looking for support.

 

A recently released Report by the Canadian Institute for Health Information, “Drug Expenditure in Canada 1985 to 2008”  stated  “Over the last 20 years, drugs have consistently remained one of the major cost drivers in health care,” says Michael Hunt, Manager of Pharmaceutical Programs at CIHI. “Spending on pharmaceuticals has more than doubled over the past 10 years, outpacing growth in health spending by hospitals, physicians and other health professionals.”

 

This certainly points to the success of the Pharma business model and to the success or power of personal contact.

 

 

 

In an effort to control these rising costs, individual benefits groups have focused on a defensive strategy of adding restrictions, slowing authorization of drugs, cost shifting to members, plan management, and reduction of benefits where possible.  From the above report, this defensive strategy has not attained the desired effect.  We have all heard the old adage, “The best defense is a good offence”.  I suggest that the strategies currently in place neglect the prime decision maker the physician (who is equivalent of a voter or fan) and do little or nothing to garner their support.   To bring this back to hockey, this strategy is like having two teams in a constant rivalry and one team has a number of high scoring forwards and the second team has mostly defensive players and may include the best goalie in the league and perhaps some goon players.  The fans are supporting the team which continually is shooting at the net, winning the most games, constantly looking to please the fans,  .   Go Sid Go. 

 

So with all of the new technology and communication techniques , it appears from the above examples that the power or personal contact still reigns supreme.  If personal contact wasn’t so powerful, Hockey would ignore the fans, Politicians would only do advertising, and Brand pharmaceutical Companies would not spend detailing efforts on Physicians.

 

 

 

The new CIHI Report

Drug spending estimated at $30 billion in 2008 was released today  by the CIHI.  Clearly this report validates my earlier post (A Quick comparison of Canada and the US ). 

Canada ranks #2 behind the US in a per Capita spending on drugs.  This makes perfect sense when one compares the drug mix differences between the countries .  In another earlier CIHI document  there was a pie chart showing  that Canada was 3.8 % of the global spend on drugs .  I wonder if that now  has increased? That same report showed Britain as having 4.2% of the global pharmaceutical spend .  Considering the population of Britain is about 66 Million vs Canada's 33 Million , it clearly  displays  something is  not working.