Here is an Xconomy post from yesterday that highlights remarks made by Dr. Donald Berwick, the former administrator of the Center for Medicare and Medicaid Services. He spoke last week in California at an invitation-only conference of healthcare executives and investors sponsored by the private equity firm Health Evolution Partners. He spoke about our health care system and health care reform.
Dr. Berwick said that it would be a tragedy for America should the Supreme Court strike down the Obama Administration’s Affordable Care Act. Yet his primary theme was that it was getting very late in the game to slow the aggregate cost of health care as the baby boomers come into retirement. Citing his recent article in JAMA, Berwick noted that the sum of the lowest available estimates indicate that in excess of 20 percent of total health care expenditures is wasted. Berwick suspects we are really wasting one of every three dollars that we spend. This seems consistent with the oft-cited disparity between total US health care spending and outcomes in this country.
The urgency of cost control is now such that, he said, there will be big reductions. The only question is whether we will do it in a good way or a bad way. As to the future impact of all this on innovative life sciences companies, Berwick sounded an unmistakable warning. “If your products are expensive, it will be challenging; if yours is a firm focused on controlling costs, then your time has come.” In other words, biotech and medical device companies had better develop their case for cost effectiveness as their products enter into clinical development, because mere efficacy and safety may not get you paid in this brave new world.
What do you think his position would be relative to Abbott's strategy below to challenge the validity of biosimilars?
Posted by Bruce Lehr May 1st 2012.