Speeches & Communication

John J. Castellani Remarks at National Journal Forum

PhRMA November 14, 2012

John J. Castellani
President & C.E.O.
Pharmaceutical Research and Manufacturers of America
Before: National Journal Forum
Conditions for Progress: Strengthening America’s Health Care Ecosystem
Tuesday, November 13, 2012
Washington, D.C. 

Thank you, Victoria and good morning.

I want to thank the National Journal and Victoria for all that they have done to make this policy summit possible.

There is a scientific proposition developed in-part by the American meteorologist and mathematician Edward Lorenz called chaos theory. It includes something called “the Butterfly Effect.”

In its simplest form, everything in the greater ecosystem is inter-related and interconnected.

Small changes and large ones matter. In other words, the hurricane building in the Gulf of Mexico today began with the flapping of a butterfly’s wings months before. 

I raise the so-called “butterfly effect” because it helps illustrate a basic truth about healthcare in America. It too is an ecosystem.

We too often talk about our health care system as if it is many disparate, sometimes haphazard parts. Doctors, nurses, hospitals, insurers, biopharmaceutical companies, and more, all trying to deliver the moving target of “care.”

In fact, it is an intricate, inter-related ecosystem of many different small and large components that are reliant upon one another, with the patient rightly in the middle. It cannot function without all the elements. And it cannot function well if we think of it as just individual actors to be dealt with separately.

Understanding how these systems are linked is critically important when we talk about meeting the healthcare challenges we face.

Our common goal as policy makers, patients, healthcare providers, and creators of new medicines is to foster an environment that advances patient care and promotes medical innovation and good health.

But, as we strive to do so, we must remember that these inter-relationships exist.

Let me give you two examples of how we view the ecosystem within the biopharmaceutical research sector. Our part of the ecosystem includes research companies like our members, patients, caregivers, hospitals, academic research centers and others. Each may at times seem to function apart from other segments of the system, but what happens to one affects all the other parts. 

We have a growing diabetes problem in this country. It is and will affect everything we do in healthcare. It will affect health insurance, it will affect the workplace, it will affect healthcare professionals and how they spend their time, and so on.

Today, PhRMA is releasing its latest Medicines in Development report on Diabetes.  It shows that there are currently 221 new medicines to treat diabetes in late stage development, testing or before the FDA for approval.

These potential new medicines represent important advances that could both help treat the disease and ease the burden it puts on patients. They also represent the ecosystem working at full speed. The research is conducted by our members and in partnerships with academic medical centers and universities. Patients participate in the clinical trials. Vendors supply equipment and other services needed to test and ultimately produce the medicines. The FDA will review the new medicines for safety and efficacy.

The new medicines could also help reduce the costs of treatment over the long-term, change how and where we treat, reduce the financial and productivity burdens of diabetes on employers and provide clues to even more innovative treatments for diabetes and other conditions.

The point is that these new medicines are developed in a complex ecosystem and also play an important role in an even broader system. As such, the health, fiscal, educational, investment, tax and regulatory policies we choose – policies that on the surface may not seem to have any or only the smallest connection to the development of new diabetes medicines – may have a profound effect.

Vendors and suppliers are another example of the ecosystem – both for the biopharmaceutical sector specifically and the health care industry more broadly. PhRMA measured the scope of these business relationships in 17 states and found over $53 billion in spending by our members with businesses in those states. As PhRMA member companies are affected by economic or policy events, so too are our vendors. The communities they operate in are affected. The men and women they employ are affected. The taxes they pay are affected, and on and on.

While it isn’t always evident, the policy choices we make – regulations, spending reductions, investments or neglect of one or more portions of this ecosystem -- have short- and long-term effects on other constituent parts.  Some will be obvious.  Others, like the vendors I mentioned or the creation of a new diabetes medicine, will be less apparently but just as certainly affected.

That is why we are here today: both to better understand the scope and interconnectedness of our healthcare ecosystem and, to foster a greater dialog about how the economic, health and policy challenges we face affect our ability to advance care and meet patient needs.

If we can do a better job of understanding these relationships, as advocates, policy makers and just plain concerned citizens, we must consider how the choices we make affect our ability to do so -- today, tomorrow and ten years from now.

I’m excited to be here, I thank you all for coming and I am grateful for the participation of all of our panelists, moderators and presenters.

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $49.5 billion in 2011 in discovering and developing new medicines.

Find PhRMA Online:

For information on how innovative medicines save lives, visit: http://www.innovation.org

For information on the Partnership for Prescription Assistance, visit: http://www.pparx.org

For information on ensuring the flow of medicines during public health emergencies, visit http://www.rxresponse.org