As a country, we spend approximately $500 billion on prescription drugs. Specialty drugs account for less than 2% of prescriptions but will cost us over $250 billion (that’s in 2021)—so, 2% of prescriptions but half the spend. Specialty is the fastest-growing segment of healthcare spend and is a dominant issue that self-funded employers and other purchasers face.
But let’s dig into that $250 billion being spent on specialty drugs, shall we? I have to say, personally, that if we spent $250 billion but saved more than that in medical costs or if the patient quality of life went up measurably or if life expectancy or overall survival or whatever metric you used to assess quality … if that big spend produced even bigger returns/results, I for one would be like, “OK, trade-offs. Let’s discuss.”
But the thing is, clinical trials and real-world evidence alike suggest that there’s a lot of patients who don’t really benefit from the expensive drugs that they are taking or were prescribed, and even those who benefit might not get the results that they’re hoping for or even de minimis expecting.
In this healthcare podcast, I am talking with Pramod John, CEO of VIVIO Health; and he makes a couple of great points about all of this that I’ll repeat here and then he’s gonna say them again later in this episode but in context—and probably better.
There was some research done that showed for a really popular, really expensive drug, only 2% of patients who took it got the expected, maybe promised, benefits.
But 100% of the patients who took that drug got bad, in some cases dangerously bad, diarrhea. This situation is really kind of typical.
A drug will work great for some people, mediocre for other people/patients, and not at all for, say, the remaining what might be majority of patients. So, you’ll have 2 patients where the results are out of the park, 23 patients where results are pretty darn good, 25 patients reporting meh results but something you can actually still point to, and then maybe 50 patients who see absolutely no improvement in anything.
So, here’s an important point: Maybe there’s, let’s just say, 3 drugs or 10 drugs in this therapeutic category, and that same patient distribution is true for all of them—except different drugs may work for different people. So, by enabling access to all the drugs, you can see that patients have a better chance of being in one of those first groups where they actually get results because there’s more drugs that they can try and different drugs work differently in different people.
But now, let’s consider the way that we pay for specialty drugs: One or two of them get on formulary typically, and then all the others are excluded. That said, the purchaser, patient, and/or taxpayer is gonna pay a whole lot of money for those drugs regardless of how well they do or do not work. And with fewer drugs on formulary, there’s less of a chance that results gold will be struck. But we’re gonna pay a whole lot of money, also in terms of human life, to deal with the direct and cascading side effects of drugs whether they do or don’t work.
I have to admit, I kind of have a new appreciation for so-called me-too drugs after this conversation. Let me just add that here for the record.
My guest today and next week is Pramod John, who is the founder and CEO over at VIVIO Health. VIVIO contracts with self-insured employers and helps their employees/members/patients (whatever you call them) get the right drug. They actually expand access, and the employer saves money. After what I just said, you might be cottoning on to why.
The show this week concerns the reality of specialty drugs and what the terms efficacy and effectiveness really mean because they might not mean what you think they mean. As inconceivable as that might feel, I learned something. You might, too. And there are implications—big implications—for all of this for patients/members/employees. Or you and your family. In this episode, we also define and discuss the terms NNT (number needed to treat) and NNH (number needed to harm), which are really important and, in my humble opinion, do not get discussed enough—especially with patients who need to know these things to make informed choices.
Next week’s show is also with Pramod John, and we get into how what we talk about here intersects with rebates and formularies. Come back for that. It’s probably a 400-level class in specialty pharmacy rebating, but some of you will appreciate it.
You can learn more at viviohealth.com or by emailing Pramod at pramod@viviohealth.com.
Pramod John, PhD, is the team leader of VIVIO, a public benefit corporation whose mission is to ensure that drugs work in the real world for the people on them and that their costs reflect the value provided. VIVIO’s model has improved health outcomes and generated 35% to 40% savings on drug acquisition costs. It accomplishes this by answering three simple questions: (1) Is this the right drug? (2) Is it a fair price? and (3) Is it working for the patient?
Before VIVIO, Pramod was founder of Oration PBC (acquired by PokitDok), which gave consumers control over their drug purchasing by capturing the prescription in the physician’s office and providing real-time pricing options and automatic routing capabilities. Pramod was also vice president of strategy and innovation at McKesson, the world’s largest healthcare company. At McKesson, Pramod helped develop solutions that leveraged advanced technologies and business process improvements to optimize healthcare delivery systems, infrastructure, and supply chains.
Earlier, Pramod founded and served as CEO of PacketMotion, Inc, a venture-funded startup in the enterprise network information and policy management industry. VMware later acquired the company. In addition, Pramod founded netExaminer.com, a managed-vulnerability assessment company acquired by SonicWALL.
Pramod earned his PhD in electrical engineering from the University of Illinois at Urbana-Champaign. He serves on the board of Wycliffe USA. He also serves on the advisory board of Folia Water and as a mentor at StartX.
05:34 What does a good response mean in pharmaceutical products?
06:06 “Different people get different utility out of something.”
06:31 Why doesn’t efficacy mean what you think it means in terms of pharmaceutical products?
08:40 What is the difference between efficacy and effectiveness in Pharma?
09:10 Why aren’t drugs’ major side effects factored into a drug’s efficacy and effectiveness?
10:14 “What’s the benefit of this versus what’s the harm in this?”
13:35 “Clearly as consumers, we all feel that we’re special. But what about physicians?”
14:14 “The benefit itself—what does it have to be?”
15:18 EP334 with Sunita Desai, PhD.
17:11 “We tend to think of things as a binary distribution—it works or it doesn’t.”
18:22 “The default choice that we start with is often the wrong one.”
20:54 “It doesn’t matter why if we can’t fix the reason.”
22:02 “At some point, the question becomes, ‘Do we have any information?’”
22:36 Why do other developed countries pay less for their drugs?
24:21 How do we end up with crappy drugs on the market that don’t really move the dial?
25:57 EP303 with Anna Kaltenboeck.
27:22 “We can build a better system. And that’s what we do every day.”
You can learn more at viviohealth.com or by emailing Pramod at pramod@viviohealth.com.
Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
What does a good response mean in pharmaceutical products? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
“Different people get different utility out of something.” Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
Why doesn’t efficacy mean what you think it means in terms of pharmaceutical products? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
What is the difference between efficacy and effectiveness in Pharma? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
Why aren’t drugs’ major side effects factored into a drug’s efficacy and effectiveness? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
“What’s the benefit of this versus what’s the harm in this?” Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
“Clearly as consumers, we all feel that we’re special. But what about physicians?” Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
“The benefit itself—what does it have to be?” Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
“We tend to think of things as a binary distribution—it works or it doesn’t.” Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
“The default choice that we start with is often the wrong one.” Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
“It doesn’t matter why if we can’t fix the reason.” Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
“At some point, the question becomes, ‘Do we have any information?’” Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
Why do other developed countries pay less for their drugs? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs
How do we end up with crappy drugs on the market that don’t really move the dial? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs