Health Reform: Past, Present and Future

April 21, 2017
Health Care
Justin McCarthy


To at least one pair of eyes, the current U.S. health policy debate is a case of history repeating.

Bill Gradison served 18 years in Congress and has watched the Clinton, Obama and now Trump administrations tackle health care reform with varying levels of success. Clinton, and so far Trump, failed to build coalitions whereas Obama did, Gradison told members of the Duke Health Sector Advisory Council.

Another failing of the current Republican approach, Gradison said, is that it "doesn't address the number one issue to people: Cost."

Gradison is now on the Medicare Payment Advisory Commission (MedPAC), a nonpartisan agency that advises Congress on Medicare policy. Gradison told a biannual meeting of the Health Sector Advisory Council at Duke University's Fuqua School of Business about proposals considered by MedPAC to control drug spending, including limiting price increases for generic drugs to medical inflation, and negotiation of the price of sole-source Part B drugs. The meeting, facilitated by Professor David Ridley, brought together members of Congress, hospital administrators, insurers, drug manufacturers, professors and students to discuss the future of health policy under the new president and Congress. That future remains uncertain after plans to bring a repeal of the Affordable Care Act to the House floor were abandoned just hours after the meeting ended.

U.S. Rep. David Price, a Democrat, said that there's "political accountability coming" for Republicans who spent years undermining Obamacare and are now faced with offering an alternative. Republican U.S. Sen. Richard Burr said there was no "silver bullet" but that the solution lies in allowing market forces to make health care function more efficiently.

Burr recommended greater leveraging of data, starting with the government.

"The American government has more data than any private company," he said, "but doesn't have a culture to do anything with it."

"A more complex issue than it appears in the headlines."

Regardless of whether broader health reform succeeds, both the President and members of Congress on both sides of the aisle seem to agree that drug prices are too high, according to Professor Mark McClellan. However, Justin McCarthy, senior vice-president of global policy and international public affairs for Pfizer, said it's "a more complex issue than it appears in the headlines."

Groundbreaking and sometimes lifesaving treatments can cost thousands of dollars before generic equivalents hit the market, but McCarthy, pictured above, said those prices are what fuels the experimentation necessary to develop new drugs.

"Innovative medicines are expensive, but by and large they deliver excellent value," he said.

Only about 12 percent of medicines in development actually make it to market, McCarthy said.

"If we aren't willing to pay for the value of innovative medicines for a short period of time, I don't know how we can sustain such a high-risk, high-reward industry," he said. "We're not just looking for a return on the investment on one project, we're looking for a return on the 90 percent that didn't make it."

Prices fall once generic competitors hit the market, after which initially expensive medications "continue to deliver value for years," McCarthy said.

Pharmaceutical innovation in the U.S. market has global value, McCarthy said.

"We as a society have to decide," he said, "whether we are willing to pay for that innovation."

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