Difference between revisions of "Healthcare system reform"

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'''Work under construction. In case you have any questions, additions or comments, please do not edit these pages, but you are more than welcome to [mailto:ruthdonners@hotmail.com contact us].'''  
'''Work under construction. In case you have any questions, additions or comments, please do not edit these pages, but you are more than welcome to [mailto:ruthdonners@hotmail.com contact us].'''  
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Scenario wherein the healthcare system is more integrated, shorter lines between pharma, medicine, insurance companies  
Scenario wherein the healthcare system is more integrated, shorter lines between pharma, medicine, insurance companies, which gives pharma incentive to focus more on market pull than technology push<br>
 
==Developments in time==
==Developments in time==
===2010-2015===
===2010-2015===


During first decade of new millennium, innovation in the healthcare system was primarily dominated by multinational companies. The most important factor contributing to this long term resilience of the drug-based innovation model, and its dominant role in the development of health care systems, was the regulatory system. The primary markets, Europe and USA, have very lengthy, expensive and complex set of regulations which impose significant constraints on the innovation system for drugs thus making product to market process a lengthy and costly process.
At the beginning of 2009, the global economic environment was still in a major state of flux. The ever increasing cost of healthcare became one of the major issues in developed countries as well as developing world. In the United States, the actions of the Obama administration and Congress were committed to addressing healthcare issues as part of economic reform. The global economic slowdown sparked acceleration of reform in other countries as well, whether in the form of increasing government demands for price cuts, as in Germany and the U.K., or encouraged use of generics, as in Japan. Next to the governments, insurance companies started to take more significant role as the primary payer of the healthcare expenditure. <br><br>
 
On the regulatory side, a major milestone opened the way to integration in the healthcare system. Sentinel system, initiated by the FDA’s at early 2005, was opened to pharmaceutical companies in 2011 to provide access to existing electronic health information, including claims data, emerging electronic health records, and diagnostic databases. The primary aim of the FDA was using these databases to monitor the safety of drugs and devices, and the Sentinel database was also likely to support Phase IV post-marketing studies and surveillance. In Europe a similar initiative was taken in a number of countries, like the Netherlands passed legislation in 2008 for a system called Aorta (Electronic Patient File, EPD) see [[http://nl.wikipedia.org/wiki/Elektronisch_pati%C3%ABntendossier]] (in Dutch), Sweden and Belgium [[http://www.ictzorg.com/nieuws/nieuw/2736/nederland-epd-koploper-in-europa]]. After those individual country initiatives, European Union passed Europe-wide legislation and allowed controlled sharing of electronic health care information by 2013.
This was clear when comparing the lightly regulated information and communication technology (ICT) sector with the heavily regulated life sciences, the former sees a much greater degree and rapidity of change in products and capabilities arising from technological innovation and small start-up companies are able to build up rapidly to become major players on the basis of innovations that effectively challenge the status quo. At the beginning of 21st century, biotechnology was expected to have a similar impact on health care industries and, while it has indeed played an important role in their development, this has been mainly supportive of the prevailing model for drug discovery, rather than challenging it. Despite large scale public and private investment, the sector is still dominated by a similar set of companies (although their names may have changed) and the basic innovation model remains fundamentally unaltered. Regulation formed primary cause for this result by creating an insurmountable barrier to entry for any start-up company with an innovative idea that might challenge the status quo.
 
Around 2010 after the 2008 financial crisis, instead of seeing themselves as passive responders to events, regulators began to see their role in a much more proactive way. In line with “new governance” agendas and linked to globalization initiatives, discussions began to take place within regulatory bodies about their role in stimulating changes in the processes and outcomes of health care innovation. But as like any other regulatory issue, turning this concern/discussions was taking long period.
 
Meanwhile next to the advancement in biotechnology, after dotcom buuble, IT world started to increase innovation pace. Especially with Apple Iphone and later Google's Android products turned mobile phones into handheld computers turned society to 7/24 online community and shifted the paradigm.
 
Thus fundamental, rather than incremental, change becomes increasingly inevitable, but also increasingly unimaginable. Some time in the future, the science and industry innovation system will experience a “Black Swan”.


===2015-2020===
===2015-2020===
Collaboration between a big pharma (? Pfizer, Roche?) and a big IT (Apple or Google)
In 2015 one of the largest pharmaceutical companies decided to form a joint company (PATC) with a major ICT firm in order to gain “first mover” advantage in what they by then perceived was “the way forward” for the health bioeconomy. It took several years from the formation of PATC to develop the beginnings of an effective model for the new co-ordinated mode of operation which became known as Networked Health Care (NHC).
The backing of the two parent companies, with their considerable financial clout was reinforced by the support and active participation of two other major financial players, the private health care insurance industry, particularly in the United States, and the re-insurance industry. Other key supporters that were actively involved in the shaping of the NHC approach included the regulators (FDA and EMEA), the major charities funding health care research and development, and a Patient Group Consortium that had been formed in 2012 to promote innovative change in the health care sector and had mounted a campaign in 2017 to encourage the more rapid development and uptake of biotechnology-based innovation.


Change of the regulatory system
As one of the most innovative industry, ICT industry saw those developments as an opportunity and moved quickly to capitalize this new market opportunity. Two of the biggest ICT giants Microsoft and Google has both launched their respective services where health and fitness information of the individuals can be stored online. While those services were targeting private individuals to manage and control their personal health, they also formed potential secondary information source for pharmaceutical industry next to the Sentinel (US) and Aorta (NL) government databases. While government systems were providing information related to health incidents, hospitalization, treatments, claims etc, those public ICT services focused beyond hospital and insurance records and collected broader data about daily life of the people in which Pharmaceutical companies later found vast valuable information for potential new drug development. Due to the sensitivity of the information, ICT and Pharmaceutical industry had to wait till end of 2018 where new legislation allowed controlled sharing of the information collected by those private services.  
A series of creative think-tanks was set up, initially involving a restricted set of participants from the
full range of life science companies, ICT companies, regulators, and insurance industry
representatives. As discussions progressed and concrete proposals began to be formalised, discussion
fora were widened to include patient groups and other stakeholders.
 
The challenge for regulatory system was to ensure the continued safety, quality and efficacy of new drugs but to
do this within a system that was responsive to the new challenges being presented by life science
innovation.The new regulatory approach that began to emerge required creative and constructive thinking from
senior managers, regulators and analysts in life science and ICT industries, along with an enthusiasm
for collaboration across non-traditional boundaries. An additional drive that facilitated change was the involvement of Indian and Chinese companies and regulators. By their pre-existing expertise in ICT industry provided the competitive advantage to companies in these countries to move to a more equal competitive position with companies in the United States and the European Union, and even in some cases to overtake them in global competitiveness.
 
The major change of new regulatory system arrived late 2018 where there was a revision of the approach to Phase 3 clinical trials, referred to by some as the “Survival license”. Instead of classical double blind controlled clinical trials, individuals volunteered for the test of drug with the benefits and the risks of the treatment. Thanks to the connectivity technologies, main indicators of the patient is monitored by testing organization as well as regulatory bodies and local health practitioners remotely.


===2020-2025===
===2020-2025===
Reform established, result:  a "Networked Healthcare System"
Gene sequencing plus synthetic genomics is an example of a convergent technology, combining
chemistry, physics, engineering, biotechnology and information technology to develop health care
diagnostic and delivery systems operating at the nano scale. Such developments were facilitated by the
existence of the new NHC based companies that could organise the collaborations across different
disciplines required to bring such products to market.
Shorter product lifecycle
No blockbusters but many lower margin products which target specific customers, overall better financial
performance compared to old model multinational pharma's.


Research on stem cells had by 2025 resulted in successful and affordable therapies, based on both
By 2020, development in the past decade created the suitable environment for the pharmaceuticals companies to overcome major challenges of their industry, namely, financial pressure both from insurance companies for the cost reduction and drying R&D pipelines. In 2021, Pfizer, Microsoft, UnitedHealth , WellPoint (two of the top health insurance providers in US) came together to form a joint venture firm in order to gain “first mover” advantage in what they by then perceived was “the way forward” for the health bio-economy. The new business model enabled integration of the commercial and development sides of the pharma business to ensure the commercial relevance of scientific and clinical innovation. In the first joint venture, UnitedHealth and Wellpoint reviewed R&D pipeline of Pfizer and prioritized the projects based on their potential value to the total healthcare system. In return, Pfizer enjoyed support of insurance companies in the marketing of the products to the market. The data from Sentinel system combined with Microsoft Vault system gave Pfizer the opportunity to increase success ratio of clinical trials and to decrease drug development lifecycle from 10-15 years to as low as 5 years. <br><br>
adult and human embryonic stem cells. They had reduced drug bills and done away with some
This commercial initiative set the success model for the new coordinated mode of operation which became known as Networked Health Care (NHC). By 2025, 6 of 10 biggest pharmaceutical companies in US formed similar joint operations. The pharmaceutical industry mainly moved from the heavy “push model” to market pull model where their primary customer definition is extended from only physicians to include also non-physician customers such as insurance companies, pharmacies, and patients..
important drug markets.

Latest revision as of 22:03, 24 October 2009

Work under construction. In case you have any questions, additions or comments, please do not edit these pages, but you are more than welcome to contact us.

Scenario wherein the healthcare system is more integrated, shorter lines between pharma, medicine, insurance companies, which gives pharma incentive to focus more on market pull than technology push

Developments in time

2010-2015

At the beginning of 2009, the global economic environment was still in a major state of flux. The ever increasing cost of healthcare became one of the major issues in developed countries as well as developing world. In the United States, the actions of the Obama administration and Congress were committed to addressing healthcare issues as part of economic reform. The global economic slowdown sparked acceleration of reform in other countries as well, whether in the form of increasing government demands for price cuts, as in Germany and the U.K., or encouraged use of generics, as in Japan. Next to the governments, insurance companies started to take more significant role as the primary payer of the healthcare expenditure.

On the regulatory side, a major milestone opened the way to integration in the healthcare system. Sentinel system, initiated by the FDA’s at early 2005, was opened to pharmaceutical companies in 2011 to provide access to existing electronic health information, including claims data, emerging electronic health records, and diagnostic databases. The primary aim of the FDA was using these databases to monitor the safety of drugs and devices, and the Sentinel database was also likely to support Phase IV post-marketing studies and surveillance. In Europe a similar initiative was taken in a number of countries, like the Netherlands passed legislation in 2008 for a system called Aorta (Electronic Patient File, EPD) see [[1]] (in Dutch), Sweden and Belgium [[2]]. After those individual country initiatives, European Union passed Europe-wide legislation and allowed controlled sharing of electronic health care information by 2013.

2015-2020

As one of the most innovative industry, ICT industry saw those developments as an opportunity and moved quickly to capitalize this new market opportunity. Two of the biggest ICT giants Microsoft and Google has both launched their respective services where health and fitness information of the individuals can be stored online. While those services were targeting private individuals to manage and control their personal health, they also formed potential secondary information source for pharmaceutical industry next to the Sentinel (US) and Aorta (NL) government databases. While government systems were providing information related to health incidents, hospitalization, treatments, claims etc, those public ICT services focused beyond hospital and insurance records and collected broader data about daily life of the people in which Pharmaceutical companies later found vast valuable information for potential new drug development. Due to the sensitivity of the information, ICT and Pharmaceutical industry had to wait till end of 2018 where new legislation allowed controlled sharing of the information collected by those private services.

2020-2025

By 2020, development in the past decade created the suitable environment for the pharmaceuticals companies to overcome major challenges of their industry, namely, financial pressure both from insurance companies for the cost reduction and drying R&D pipelines. In 2021, Pfizer, Microsoft, UnitedHealth , WellPoint (two of the top health insurance providers in US) came together to form a joint venture firm in order to gain “first mover” advantage in what they by then perceived was “the way forward” for the health bio-economy. The new business model enabled integration of the commercial and development sides of the pharma business to ensure the commercial relevance of scientific and clinical innovation. In the first joint venture, UnitedHealth and Wellpoint reviewed R&D pipeline of Pfizer and prioritized the projects based on their potential value to the total healthcare system. In return, Pfizer enjoyed support of insurance companies in the marketing of the products to the market. The data from Sentinel system combined with Microsoft Vault system gave Pfizer the opportunity to increase success ratio of clinical trials and to decrease drug development lifecycle from 10-15 years to as low as 5 years.

This commercial initiative set the success model for the new coordinated mode of operation which became known as Networked Health Care (NHC). By 2025, 6 of 10 biggest pharmaceutical companies in US formed similar joint operations. The pharmaceutical industry mainly moved from the heavy “push model” to market pull model where their primary customer definition is extended from only physicians to include also non-physician customers such as insurance companies, pharmacies, and patients..

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