I attended the J.P. Morgan Annual Healthcare Conference a few weeks ago. Think of it as the CEO version of SXSW for all things big pharma, biotech, health insurance, health tech and large healthcare providers. In four days you drink a fire hose of 30-minute reports from CEOs and their CFOs that together paint a detailed portrait of the financial and scientific outlook of the industry. (i.e., many “forward-looking statements.”)
The Solvadi Effect
As I was listening to the executive presentations, I began to pick up on three important trends. First and perhaps most importantly, I sensed that the industry is really committed to finding cures. Call it the Solvadi Effect.
Historically, the objective has always been to delay death, but now everyone seems inspired by the power of Gilead Science’s new product to cure hepatitis C. This is a much better clinical outcome than the generic alternatives with their nasty side-effects. Pharma leadership, particularly biotech executives, used the conference venue to declare their commitment to finding cures for diseases, with special attention placed on Alzheimer’s, Parkinson’s, MS and hepatitis.
Business Model Flip
One reimbursement policy implication is that over the next 5 to 10 years we could potentially see the pharma/healthcare business model flip from delivering moderately priced drugs that chronically-ill patients take for the rest of their life to a new model in which therapies might cure a disease in a short period of time, but with a very high price tag. For example, the business and social contract is already changing from supplying a generic drug that someone with hepatitis C would take for the rest of their life to a drug can cure the patient in 12 weeks, but will cost $86,000.