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© Copyright 2000 Rogers Media. The following article first appeared in the April 2001 edition of
BENEFITS CANADA magazine.
Healthcare by design
The Human Genome Project promises great things for the health and productivity of your
organization. The challenge is to see beyond the price tag.
By Kevin Press
This is the start of something wonderful. It's important not to forget that.
Scientists announced last June that they had mapped 97% of the human genome. This provides human beings
with an understanding of disease and its treatment we have never enjoyed before. But the work is not
complete. Think of the human genome as the planet earth. We've mapped the continents; we've mapped the
countries. "Even the cities," explains Dr. Kevin Fehr, director, external scientific affairs at
GlaxoSmithKline in Mississauga, Ont. "And very soon the streets. But getting down to the individual houses
or the individual people in each house, that will take a little longer."
Here is what we know. The first decade of this new century will see the development of a system of
healthcare provision more successful than ever thought possible. Because of a process begun with the
mapping of the human genome, a range of tailor-made drugs will be available to your plan members in just a
few years. Instead of a pharmaceutical manufacturer launching one asthma drug, for example, it will launch
several--each designed for specific groups of patients that share a similar genetic makeup. These designer
drugs will help Canadians become healthier and more productive.
Still, there are worries. Here is what we don't know. What will these drugs cost? Given the price increases
benefits plan sponsors have seen in recent years, they can hardly be blamed for assuming the worst about
what this will do to their already strained budgets. Some in the pharmaceutical industry insist there will
be efficiencies won by this technology, which will temper price increases or even lower drug costs. They'll
have a hard time convincing plan sponsors.
MEANING OF LIFE
First, a crash course on genomics. Our genes carry the stuff of who we are. It is because of our genes that
we share so much in common with our parents and children. Genes are not the only reason we suffer from
disease though. Environmental factors (exposure to radiation for example) and lifestyle (say a lack of
exercise) have a lot to do with what ails us.
That said, genomics--the mapping, sequencing and analyzing of genomes--makes possible a more profound
understanding of disease states and their underlying causes. This will lead to the advances that are going
to impact drug plan management throughout this decade.
*Genomics helps us treat disease. Understanding which genes lead to disease helps researchers target
drugs specifically to those who fit a certain genetic profile. Welcome to the world of designer drugs.
"In the next five years, we will be able to diagnose diseases significantly better," says Sanjiv Sharma,
director, market access strategic planning with Aventis in Laval, Que. "We will be able to really pinpoint
the problems."
*Medicines will be developed more efficiently.It now costs $300 to $500 million to bring the average
new drug to market. Genomics should reduce some of that cost, because drugs will be designed for patients
within a specific genotype. Therefore, clinical trials will be run with smaller groups of people.
"We would hope ultimately to be able to select our patients for clinical trials that we think are likely to
be responders," says Dr. Fehr. "That means that we will need to treat fewer patients to demonstrate
effectiveness, and we will avoid exposing people who are unlikely to benefit. However, we will have to work
very closely with the regulatory authorities as the power of pharmacogenetics is brought to our clinical
trial designs."
*Medicines will be prescribed more effectively.Designer drugs will be targeted for patients with
specific genetic profiles. That means more effective treatment, a significant reduction in side effects and
perhaps even an end to step therapy.
"With current medications you get best-care protocols, where [doctors] suggest that certain products are
first line, and if they don't work then they go to the second line," says Dr. Fehr. "We'll know right from
the start if somebody will not respond to something we've considered to be first line. So we won't even
bother with it. We'll go straight to what works."
"It is like going from a ready-made suit to a tailor-made suit, i.e. a specific product for a specific
indication for specific people," explains Sharma. "A particular type of man or woman, with a particular
type of [genetic] trait, will be the right candidate for a drug. It is a total reversal of today's model.
You will see a lot of drugs designed for fewer patients."
BETWEEN NOW AND THEN
Plan sponsors can expect the first generation of these designer drugs to arrive in about five years.
Improved generations will follow quickly. That is, in part, because of the improved efficiencies genomics
provides in the research and development process. We'll also see a marked improvement in diagnoses by
mid-decade.
Decisions about medical priorities will be an important part of the early debate. Which drugs will be
developed first? "There will be public pressure to look at areas that kill. Cancer and heart disease are
two areas where there will be tremendous pressure," says Jim Norton, senior vice-president, health strategy
at Aon Consulting in Toronto. "Now that you can actually prevent some of these illnesses, where do you
target first? Obviously you can't go after every single killing disease and every single orphan disease at
the same time."
Orphan diseases--those that effect a tiny percentage of the world population--have presented a financial
challenge for pharmaceutical companies in the past because they don't offer an opportunity for return on
investment. But as the model for drug research and development veers toward the targeting of smaller
populations, the economics of orphan diseases become more manageable.
"Someone's going to have to set the priorities," says Norton. "I don't think [the drug industry] should be
setting all the priorities. There has to be a combination of public and private setting of priorities.
That's the place where employers and their various coalitions should have influence."
COST OF DOING BUSINESS
Despite the promised R&D efficiencies offered by genomics, it is hard for employers to imagine this
kind of medical advance coming cheaply. They've been grappling with roughly 20% annual increases in their
drug plans for the last three or four years. Baby boomer plan members are aging, and they're making
significant healthcare demands. In fact, the years during which boomers will be asking the most of
employers will coincide directly with the first and second generation of these new drugs.
Set all this against an environment in which senior management teams continue to think in terms of
organizational silos. They're directing benefits plan managers to control costs, without regard for the
long-term financial impact to the organization.
"They can't see the forest for the trees," says Fred Holmes, national practice leader, group health &
welfare practice at Buck Consultants in Toronto. "This is a great opportunity for employers because it will
reduce their long-term disability costs. It will reduce their casual absence and short-term disability
costs. It will reduce the outside medical services that employers hire."
Barry Noble, national director, managed care of Manulife Financial in North York, Ont. agrees this silo
thinking is far too common. "That's the whole difficulty around how businesses in general are managed," he
says. "They're primarily driven by financial decisions, and many of those decisions are fairly short term."
Managing up, to the senior executive level, will get tougher before it gets easier. The fact is, those drug
plan cost increases seen in recent years were overlooked in a lot of organizations because employee
attraction and retention was such a priority. The labour pool was too shallow to be worried about drug
prices.
Those days are over. "The crunch is going to come as we move into a downturn in the economy, where people
are going to be looking at the cost of individual expensive drugs," says Norton.
And what if that downturn becomes a prolonged recession? "It's crisis management," says Noble. "That means
looking very narrowly at the different budget cost centres. If we get into that kind of an environment,
there's a high risk that we will see some strictly financially focused silo decision making related to drug
plan designs."
It is important not to underestimate the danger of that narrow focus. Plan sponsors might resort to
restrictive drug formularies. That could substantially reduce the pharmaceutical industry's ability to
market these new products at an important time in their development.
"It's not just a question of whether or not the pharmaceutical company will manufacture this compound,"
says Chris Bonnett in Toronto, chair of The Canadian Council on Integrated Healthcare. That's a think-tank
organization representing several healthcare stakeholders (see "Up for discussion," page 77). "They can do
it, but they won't unless somebody is prepared to pay for it. Nobody is prepared to pay for it unless they
can find some kind of return on investment. And this is going to be a very significant investment."
Sanjiv Sharma at Aventis insists employers understand the potential of genomics as an organizational health
issue. "These drugs are going to do something positive for the person, and for the organization," he says.
"Say you have a diabetes patient. That is one of the most expensive diseases. People are normally pretty
much asymptomatic, so they are often non-compliant. These are the people who end up losing their kidney,
losing their eyes and so on. They are the people who have a higher risk of suffering a cardiovascular
attack. They have a higher risk of stroke.
"Let's assume that tomorrow there is a product designed to prevent or cure diabetes in a sub-segment of the
diabetic population," says Sharma. "This will bring a dramatic reduction in the overall cost of managing
this disease for the employer and insurance company, despite paying for more expensive drugs. You have to
look at the cost of the drug differently, because now you're not paying for hospitalization. You're not
paying for renal complications. You're not paying for heart attacks. The patient is going to be healthier,
perhaps longer."
ENTITLEMENT MENTALITY
The drug plan management challenge will grow more daunting as prices rise and baby boom plan members age.
Fred Holmes at Buck Consultants predicts a renewed debate on a government-sponsored national pharmacare
program. "Certainly one could imagine something like the National Health Service in the U.K., where you
have a basic medicare/drug program," he says. "If you want anything better, you pay out of your pocket."
In the meantime, there is an important education challenge facing plan sponsors. Too many plan members
continue to assume that their employer has a responsibility for their health. They're not committed to
living a healthy lifestyle, and they aren't prepared to pay for drugs themselves. There is no reason to
believe they will view these new drugs any differently.
"[Plan sponsors] have to break the entitlement mentality by changing the way plans are delivered," says
Holmes. "The whole concept of sharing has to be the new thrust of communications. It's no longer
appropriate just to give people a booklet and say 'there's the plan.' The employer has to say: 'This is my
contribution to your well-being.' "
Canadian employers face a potential labour shortage in the years ahead as a large percentage of the
country's workforce nears retirement. Progressive drug plan management, designed to attract and retain key
talent, will become more important than ever.
"The biggest issue on the table is where you are going to get the skilled workers as the baby boomers
retire," says Holmes. "How do you convince older people to stay with you? The key selling feature as this
first decade of the new millennium works its way down is going to be healthcare. If employers are too
restrictive with their health plans, employees are going to move to someone who has a better arrangement."
Plan sponsors have got to embrace the medical advances afforded by genomics--it is a straightforward
competitive issue. Hopefully they will have some help along the way.
"Everybody is going to have to give up something," says Norton. "Employees are going to probably have to
give up from the standpoint of having access to every single drug without question. Employers are going to
have to put up with continuing increases in costs. And the pharmaceutical companies are going to have to
learn that they can't have everything their way--every employee with full access to every single drug--no
questions asked."
It is early days yet, of course, in the development of genomics. The good news is that, with the help of
groups like the Canadian Council on Integrated Healthcare, plan sponsors are being alerted to the
challenges ahead.
The goal then is to leverage the attention that genomics will bring to the employer-sponsored drug plan.
Once senior management teams across Canada are alerted to the need for a more progressive view, perhaps
we'll see the kind of movement the experts have been calling for.
Perhaps chief executives will once and for all see the big picture. There is much to lose if they don't.
Access to information
Genetic profiling will produce highly personal information about your plan members. Tell them not to worry.
Some Canadian plan members are thinking the worst about the privacy issues raised by advances in genetics.
A recent poll, conducted by PricewaterhouseCoopers LLP, found that while 91% of Canadians would share
genetic information with their doctors, just 12% would allow their employer a look at their profile.
Yet no one is suggesting that employers would have access. "They don't have the information," says Barry
Noble, national director, managed care at Manulife Financial in North York, Ont. "Unless the law allows
them to start recruiting employees and doing genetic screening as part of the recruitment process. But I
can't see that ever happening."
Your plan members may also ask questions about insurance. If a disease indicator were to show up on a
patient's profile, he or she has a responsibility to inform his insurance company. But this does not apply
to group insurance arrangements. "Given the mechanics of how group insurance is underwritten and how the
selection process occurs, I really can't see that there should be a concern," says Noble. "We won't have
access to that information."
Up for discussion
The Canadian Council on Integrated Healthcare is positioning itself as a catalyst for debate on genomics.
Stay tuned.
A group of influential healthcare professionals representing a variety of stakeholders is working towards a
national strategy on genomics for the country. The Canadian Council on Integrated Healthcare (CCIH) met in
Montreal last December to discuss the impact of genomics on all aspects of healthcare, including
employer-sponsored benefits plans.
"We know that genomics is going to be huge. But right now it's just a big black box," says Chris Bonnett,
the organization's chair. "We see our role as one of improving awareness--making people more aware of the
issues and helping to create some kind of urgency around tackling the complexity of genomics."
CCIH will release a white paper on the subject in May. The group will also launch a Web site (ccih.ca) at
the end of this month.
Bonnett says CCIH is hopeful that Canadian plan sponsors will make the necessary changes. "Maybe the cost
of genomic products will encourage more employers to actively manage their existing plans, as well as the
health of their employees, in the future," he says.
For information about CCIH, contact Chris Bonnett at bonnett@sympatico.ca.
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