Realizing the Value of Medicines Essential to Patients and the Economy

Realizing the Value of Medicines Essential to Patients and the Economy

02.28.13 | By John Castellani

I was honored to give the closing remarks at today's Economist's 2013 Pharma Summit in London.

The summit provided a great opportunity to take an in-depth look at the challenges confronting the biopharmaceutical research industry today. It was a time to look at what the sector requires to prosper and continue innovating to meet patient needs. It was also a particularly appropriate place to look at the growing evidence of the value of innovative medicines, their proper use and how access to those medicines benefits both patients and the economy.

The core of what I told those attending the summit is that the evidence of the value of medicines both for patients and the health care system continues to mount. So much so, in fact, that that the Congressional Budget Office (CBO) recently, updated "its methodology for calculating the costs of Medicare policies to reflect a growing appreciation for the positive effect of prescription medicines on total medical costs.

Now, for the first time, CBO will account 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 services for every one percent increase in the number of prescriptions.

While this may seem small, it represents a sea-change in government thinking. CBO has come around, in a small way, to realizing what all governments must face if we are to avoid pushing the cost of untreated, un-manageable disease down the road to a point outside of the political here and now.

No nation, no matter how wealthy, can provide innovative health care 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 diseases like diabetes, hypertension and Alzheimer's disease by dis-incentivizing the innovative therapies that can help reduce those costs.

If we are to foster the development of innovative medicines that will both make life better and also reduce overall costs, we must put a premium on the fruits of innovation. The benefits to payers, to economies and, most importantly, to patients more than justify the premium.

You can read my full remarks here.

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