The Lines Are Blurring in Healthcare

Trends in healthcare are driven by innovation, which is largely being driven by specialty innovation, Douglas M. Long, MBA, vice president of industry relations at IMS Health, said during the headline session “Marketplace Trends” at the Academy of Managed Care Pharmacy’s 27th Annual Meeting & Expo.

Currently, 33% of all pharmaceutical spending in the United States is specialty, compared with 23% in 2009. According to Long, experts estimate the market share will be close to 50% by 2020.

Some of the top specialty events to watch for include hepatitis C innovation with more products to come, the expensive PD-1 inhibitors in oncology, and the PCSK9 inhibitor to regulate cholesterol.

“Patient is a payer and we can’t forget that,” he said. “And one of the things, as these specialty tiers copayments go up, is a lot of times they say ‘I’m not taking the drug.’”

Generics and Biosimilars

Although half of the generic prices have gone down and half have gone up, 20% of those that went up in price “went up big time,” Long said.

There are a few reasons why the price of generics is going up. First, the bar on regulatory and quality has been raised; second, there is customer consolidation; and third, there have been fewer product launches.

Another opportunity is with biologics as patents begin to expire between now and the end of the decade.

“We finally have a biosimilar marketplace that looks like it’s ready to start in the US,” he said.

The biosimilar market should not be confused with a generic market, Long said. The cost to bring a biosimilar to market is $200 million on average and no company will give a 90% discount on development costs that high.

“If they did, they’re just slitting their own throat,” he said.

Cost Containment Strategies

There is now greater collaboration in healthcare than there has ever been before, particularly when it comes to preventing hospital readmissions for Medicare patients.

Running through the evolution of managed care, he pointed out that there has been increasing integration over time. The industry started with fee-for-service pre-1980s before moving to health maintenance organizations in the 1980s and 1990s and the early integrated delivery networks (IDNs) in the first decade of the 21st century. Now is the time of advanced IDNs, and by 2020 he expects the industry will have moved to population management.

“The lines are starting to blur,” Long said. “Two-thirds of health networks are part of [accountable care organizations] now. You have the blurring between delivery and health insurance through vertical integration.”