- Healthcare in the US – from the way it’s paid for to the types of drugs that have been approved – has gone through a lot of changes in the past few years.
- How companies adapt to those changes will be critical to their future, GlaxoSmithKline US pharmaceuticals president Jack Bailey told Business Insider.
- “I think you wait on the sidelines now and you could lose out,” Bailey said.
It’s been an exciting and at times challenging few years for the healthcare industry.
That’s especially true with regard to cutting-edge treatments that harness the body, and with the way these one-time-only therapies challenge the standard way we pay for medication. As companies and patients face higher price tags, it’ll take some new ways of thinking to figure out how to cover those costs.
“Healthcare’s undergoing unprecedented change,” GlaxoSmithKline US pharmaceuticals president Jack Bailey told Business Insider. “I think the winners are going to be the ones who understand where it needs to go, hopefully help contribute to thoughtful change, and drive some of the change themselves.”
The change is in part coming from some of the biggest scientific developments in the last year. For example, in August, the Food and Drug Administration approved a new cancer treatment that takes cells out of a cancer patient’s body, reprograms them, then inserts them back into the body to have them go after the cancer. And in December, the first gene therapy to reverse a hereditary form of blindness was approved as well.
There’s also been the changes that have come from the Affordable Care Act, and the subsequent attempts to dismantle it.
Periods of massive change in healthcare have happened before, Bailey said. Back in the 1990s, there was healthcare reform under President Bill Clinton that changed things for pharmaceutical companies, managed care organizations aimed at reducing the cost of healthcare were starting to form, and there was a big wave of new drug approvals. At the time, not being a part of that movement wasn’t an issue. The same won’t be true this time around.
“I think in the 90s when there was the last period of change, you could wait on the sidelines and it wouldn’t hurt you. I think you wait on the sidelines now and you could lose out,” Bailey said.
That’s the case not just on the scientific side with these new approaches like cell or gene therapy, but also on the payment side. Drugmakers and health insurers have to come up with new ways to pay for those treatments that often have a hefty one-time price tag – as high as $850,000 – rather than a monthly prescription price.
Ultimately, Bailey said, we’re moving in a direction from thinking about healthcare that’s paid for based on how often you use it, to a system that’s more about how healthy you might be as the result of one treatment or program. How long it takes to make that transition, however, remains to be seen.
“I do think this new innovation is going to be a forcing mechanism because if you’re talking about blindness, and curing cancer, people are going to want that,” Bailey said. “We can’t use old models on new innovation.”