HDA Media And Political Bulletin – 17 June 2016
|Disruptive forces reshaping healthcare business models
13 June 2016, pharmaphorum, Anne O’Riordan and Jeff Elton
Several elements are coming together to disrupt current healthcare business models including new socio-economic realities and financial models, scientific breakthrough, real world data and the digital revolution. These changes are redefining how healthcare is delivered and experienced. Change is driven by a shift in mindset, from a volume and inputs approach to a value and outputs one where businesses will succeed by linking financial incentives to patient outcomes.
There is no Parliamentary coverage today.
|Disruptive forces reshaping healthcare business models
13 June 2016, pharmaphorum, Anne O’Riordan and Jeff Elton
Several elements are coming together to transform companies’ approaches to meeting health needs. Successful companies will be those which focus on improving patient outcomes while taking account of scientific breakthroughs, reimbursement requirements and technological advances, say Anne O’Riordan and Jeff Elton.
New socio-economic realities, fundamental changes in how healthcare is financed, scientific breakthroughs, real-world data, and the digital revolution are all redefining health and how healthcare will be delivered and experienced. For life science companies, patient-centricity means financial incentives are linked to the outcomes realised by patients and the value delivered to healthcare providers and risk bearers.
Digitally-aware patients are becoming increasingly engaged and active in determining their own health outcomes. Many factors are catalysing this change, including the availability of genomic, health, and lifestyle data, financial incentives, and an abundance of technology solutions that help patients monitor, measure, and adjust their habits to self-manage their health and the outcomes of treatment.
Health care providers, pharma companies, medical device manufacturers, diagnostic services providers, and payers are seeking to integrate and align data for a broader end-to-end view, from diagnosis to treatment response monitoring. Nurses, health care personnel, family caregivers, patients, wellness companies, and digital device and services disrupters are joining forces in innovative ways, centered on sustaining and improving health and promoting improved outcomes critical for realising population health and personal outcomes goals.
Only the most agile and responsive will find success in this new healthcare ecosystem, in part by building value-enabling partnerships and by embracing new collaborative technologies. Industry leaders will have to comprehend the implied redefinitions of markets, the evolution of service-centred approaches, and the parameters of outcomes- and value-centric performance models, as well as how fundamentally these models will impact their organisations.
Volume to value
The shift from volume to value is leading to the development of new roles in the healthcare ecosystem value chain. Volume drivers, with their emphasis on revenues, market shares, and gross margins, are giving way to value drivers, with their emphasis on increased patient outcomes, decreasing avoidable healthcare costs, and broad, multi-year population outcome improvements to payers and risk bearers.
Payers are moving into the direct provision of care; technology companies are connecting remote clinical monitoring technologies together as a service; and medical device companies are providing direct patient care management services. Health providers are managing financial risk, making tradeoffs among the services they offer, and pursuing payment through ‘alternative’ or outcomes-based approaches.
Each organisation is working with other partners to create, advance, or deliver their services. The relationships are extending back from early drug discovery, right through clinical development, to commercialisation and patient use.
The new value-based healthcare paradigm is emerging in part from digitally-enabled patient services. Currently, value propositions focus on the clinical attributes of products compared with those of competitors’ and physician prescribers. In the emerging healthcare ecosystem, value propositions will focus on delivering outcomes-based health and therapy management services that have been enabled through the use of connected devices, sensors, services, and social engagement.
Then and now
‘Evidence’ of effectiveness used to mean the results of clinical trials and regulatory post-approval studies that took years to complete. Pharma and device companies commercialise their products, but are often challenged by why real-world results differ from what the trial data indicated should be expected.
Now, continuous sources of clinical and real-world data can track activities and outcomes in near real time, so companies can identify the factors in people’s lives that influence the effectiveness of treatments, and that enhance the ability to treat remotely and self-manage. Armed with this information, they can contemplate new strategies to fill those gaps for patients, often in partnership with large health systems, which increasingly bear risk for achieving outcomes targets or for the health of entire populations. Healthcare providers and health services partners can extend their involvement with patients beyond the office or hospital, digitally track progress in real time, and adjust treatments as necessary.
From inputs to outputs
There is a move from an input-based approach (number of patients seen, or drugs and devices sold) to an output-based approach based on attaining patients’ best possible health outcomes. When reimbursement or payment is based on inputs, there is a built-in adverse incentive to do as little as possible and receive the same compensation. But when payment is based on outputs, the incentive is to optimise productivity and maximise system benefits.
Europe is increasingly favouring value-based reimbursement, with health authorities and providers focusing on approaches to improve the health of populations as a whole with the care requirements of individuals. Variants of this approach are advancing in the US as part of the next phase of the Affordable Care Act as post-Pioneer model accountable care organisations (ACOs) and health providers initiate or acquire health plans.
A pivot to the patient
The patient’s power as a consumer is also evolving. The priorities of an individual patient with a specific disease or health condition can drive a real determination of value in therapies, interventions and services. In part by becoming more digitally-aware, the patient is taking on more direct responsibility for outcomes, viewing them as a beneficiary and active customer. Healthcare is pivoting to the patient.
Emphasise outcomes and value
To thrive in this new environment, the future leaders will have to address several core areas of their businesses. They will need to:
As part of this catalytic change, new business models, with fundamentally different economics, are forming and setting precedents and standards for others to follow. There are four business models, centered on patient outcomes and value:
Lean innovators: companies that combine generics-efficient manufacturing and supply chain best practices with M&A to facilitate rapid growth and challenge existing cost structures, productivity, and operating models.
Value innovators: companies that improve patient outcomes and system efficiency through integrating drugs, devices, and digital services with clinical processes.
Around-the-patient innovators: companies that put patient value and outcomes at the centre of their strategy, leveraging analytics to create novel speciality therapeutics and complimentary services.
New health digitals: non-healthcare companies that change the ‘how’ and ‘where’ of patient care through cross-industry collaboration, rooted in digital innovation.
These models represent the potential strategies and direction companies may take.
Technological advances are foreshadowing breakthrough opportunities in medicines and business models. In August 2015, the FDA approved the first 3D-printed drug, Spiritam, developed by US-based Aprecia Pharmaceuticals. Used in treatments for epileptics, Spiritam is made by layering powdered medicine with liquid to create a pill that dissolves almost instantly when taken with water.
By making the pill easier to swallow, more patients will stay the course with their treatment. But the implications of the technology are potentially even greater. It may be possible to localise production ‘to order’ in the dosage form best suited to individual patients. The therapeutic combinations needed to manage a specific patient’s comorbidities might be made in a single dose to aid compliance and lessen medication errors. Visualise streamlined ordering and manufacturing processes, and delivery within hours that would disrupt traditional retail pharmacies, pharmaceutical generics, therapeutics distributors, and patient adherence services.
Another technological advance is a cloud-based, data-driven digital health solution for hospitals to help improve patient outcomes and reduce costs to treat patients with chronic cardiovascular diseases.
It is designed to help providers make proactive and informed decisions based on insights into the patient population, ultimately improving the care a patient experiences from hospital stay through post-discharge care and in-home support.
These two examples are illustrative of how technologies surrounding the patient and interconnecting a previously disconnected healthcare ecosystem are transforming value in healthcare and demanding the new disruptive models.
Executives will need persistence to shape the healthcare environment and transition successfully. They will have to explore business and operating models that go beyond their traditional products or services. They will have to consider questions of privacy and use of sources of data for the benefit of the patient, advancing new levels of trust and operating competence.
Internal company operations will need to be integrated, with responsibilities to patients as the priority. Collaborations founded on trust and courage may even prove as important as having economic fundamentals and a winning business model.
The move to a value- and outcomes-based healthcare system will make the system a proactive force for health maintenance and health solutions. The next few years are crucial for companies in transition, as they are buffeted by a changing healthcare ecosystem, market pressures, and regulatory demands.
16 June 2016, DDA, Ailsa Colquhoun
B&S Healthcare has recalled two batches of parallel imported Medikinet XL 20mg (methylphenidate-hydrochloride) modified-release capsules that have been incorrectly repackaged in 30mg cartons.
The affected batches are listed below:
Batch Number Expiry Date Pack Size First distributed
02L3602 01/2018 30 capsules 07/04/2016
02L3603 06/2018 30 capsules 06/04/2016
The 20 mg strength is correctly stated on the blister packs. Pharmacists and wholesalers are asked to return any remaining stock from these batches to B & S Healthcare.
For medical information, please telephone: 0208 515 3735. For enquiries regarding returns please telephone: 0208 728 7800.
16 June 2016, PSNC
The Department of Health granted the following price concessions for June 2016:
The price concession only applies to the month that it is granted.
Contractors will be alerted to any updates through our website and via our e-news email. If you wish to subscribe to our email list, you can receive an email as soon as any announcements are made. Please note that PSNC cannot provide details of generic products that are suspected of being affected by generic supply problems unless and until the Department of Health grants a concession. No additional endorsements are required for price concessions.
If you have problems obtaining a Part VIII product or problems obtaining the product at the set Drug Tariff price, please report the issue to PSNC using the online feedback form on the PSNC Website.
If you have been able to source the product, please provide full details of the supplier and price paid. PSNC will investigate the extent of the problem and if appropriate discuss the issue with the Department of Health.
Any further concessions will be posted here on the website.
15 June 2016, The Pharmaceutical Journal
A community pharmacist who owns a chain of high street pharmacies in the North West of England has been elected the next president of the Pharmaceutical Group of the European Union (PGEU).
Raj Patel, a board member of the UK’s National Pharmacy Association, will take up the role in 2017.
The PGEU, whose members are made up of national associations and professional bodies of community pharmacists from over 30 European countries, represents its members in Brussels and works to influence pharmacy policy and legislative changes across the EU.
In his acceptance speech, Patel said he wanted to develop the role of pharmacy in Europe, particularly in public health, and warned against cuts to pharmacy spending.
“It is essential that governments across Europe invest in pharmacy so that an integrated network of pharmacy is maintained and populations right across Europe can benefit from the expertise offered by pharmacy.”
Patel owns 17 community pharmacies in the North West of England and received a MBE for services to pharmacy in the 2013 New Year’s honours. His appointment will not be affected by the result of the UK referendum on whether to leave the EU.
15 June 2016, Pharmacy Voice
Pharmacy Voice has published its final response to the Government’s consultation on plans to cut funding for community pharmacy services from October 2016, and to push through changes in the way medicines are supplied to patients.
In the letter sent to Dr Keith Ridge, Pharmacy Voice argues that an imposed cut to the global sum from October this year is not the right way to deliver efficiencies, and that the timetable for the Government to make decisions and the sector to respond to the outcome of the consultation, is now unacceptably tight. What is needed instead is a co-ordinated approach to planning investment and implementing change over time, established in partnership with community pharmacy.
Highlighting the concerns that have been raised during the consultation by a wide range of national and local organisations representing patients, professionals, service commissioners and other providers, the response notes how the Government’s proposals have been met by the sector with resistance and disbelief: “We fail to understand how a Government which expresses fervent support for community pharmacy as a partner in developing solutions to a number of the challenges facing the NHS, cannot recognise what community pharmacy teams already do day in, day out, in support of patients and the public. What is more, the Government fails to acknowledge that many other parts of the system need to change to enable community pharmacy to make its full contribution.”
The letter goes on to express disappointment that the opportunity to involve a wide range of organisations in developing more sustainable and acceptable approaches to change was not ultimately taken, stating that “there has been very limited feedback or proper discussion on how the Government’s thinking has been informed by the submissions we and others have made”.
In the response Pharmacy Voice refers to the work it is leading in partnership with the PSNC and with input from local community pharmacy leaders and the Royal Pharmaceutical Society, on the Community Pharmacy Forward View. This document, which has been developed over the last few months, sets out a shared view from the organisations working at a national level representing community pharmacy owners, contractors and leaders, of what the sector wants to achieve and how it believes it can contribute to the high performing health and care system described in the Five Year Forward View for the NHS.
Commenting on the status of this project Pharmacy Voice Chief Executive Rob Darracott explains:
“Pharmacy Voice first outlined its ambition for the sector in our 2011 Blueprint for Better Health. In this final submission to the recent consultation we have included our initial ideas for updating that ambition and vision in light of the opportunities and challenges that the health and care system now faces, within a draft paper setting out the ‘Community Pharmacy Forward View’. There are two important features to this update. First, we are very pleased to say that the document is being developed in partnership between Pharmacy Voice and the PSNC, with input from local community pharmacy leaders and the Royal Pharmaceutical Society. Secondly, as well as setting out our shared aspirations we are also discussing what needs to happen to ensure they are realised. This includes outlining actions the sector itself must take, but just as importantly what support we need from the Government, NHS and other partners in doing so.
“The Community Pharmacy Forward View will be published to the sector and our partners for comment, debate and further development shortly. Throughout the process that has played out since 17th December 2015, we have repeatedly stated our commitment to working in partnership with the Department of Health and NHS England to design a shared plan to release the potential of the sector. In submitting our ideas for the future we have reinforced the seriousness of our intent and the potential in our offer, as well as our desire to work constructively and collaboratively with other sector bodies at a national and local level. We call on the Government and national NHS bodies to respond in kind: to commit to working with Pharmacy Voice and other sector bodies to develop a clear and shared vision for the future role of community pharmacy within an integrated health and care system, and to invest in the implementation of a plan that genuinely places community pharmacy at the heart of the NHS.”
The full letter can be read here: Final PV Respons
From Factory to Pharmacy
As part of our mission to build awareness, understanding and appreciation of the vital importance of the healthcare distribution sector, we developed an infographic explaining the availability of medicines. It identifies the factors that can impact drug supply, as well as the measures that HDA members undertake day in, day out to help mitigate the risks of patients not receiving their medicines.See the Infographic
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