Real Ideas For An Affordable Health Care System

At Lilly, our mission is to make medicines that help people live longer, healthier, more active lives.  We live in an era of lifesaving medicines, but we realize some patients struggle to get affordable access to these innovative treatments. 

In a recent series of blogs on Forbes, our CEO Dr. John Lechleiter explores why players across the health care system should work together to find solutions for patients. 

We can create a world where everyone has access to affordable, highly effective medicines. And we can do that through faster approval of medicines and by empowering people to make more informed choices about their health care plans.

If you haven’t had a chance to read Dr. Lechleiter’s blogs, here is a quick summary:

We need to focus on affordability, value and outcomes.

“The ideas I’m suggesting have three common denominators.  First, they put the needs of patients first, and those certainly include affordability but also include better health outcomes.  Second, they proceed from the real-world experience of patients, insurers, employers, and drug manufacturers navigating the virtually unfathomable complexities of drug development and of America’s health-care system.  And third, they focus on removing obstacles to a well-functioning marketplace for medicines rather than adding more such obstacles.”

And to do that, we need to cut out-of-pocket costs, which means understanding that high-deductible health plans and financial guardrails for patients can go together.

“Patients can and should understand what their health care in all its forms actually costs and have the power to make choices between lower-cost and higher-cost alternatives. Health-savings accounts (HSAs) and health-reimbursement accounts (HRAs) are among the best insurance vehicles for incentivizing such transparency and choice.”

Employers and other healthcare payers have the power to balance patient contributions across the various forms of health care.  

“On average in U.S. insurance plans, patients must pay 20 percent of the cost of their medicines, compared with only five percent of their hospital charges. In addition to driving widespread misperceptions about the cost of drugs, the disparity is well-nigh perverse, medically and economically.”

People should not pay more than their insurance plan pays for their medicines.

“The list prices of prescription medicines are almost never paid by health insurers…At Lilly, we make sure that the full amount of rebates we receive is applied to the cost of our patients’ premiums.  Other payers can do this too, and they should.”

Employers should invest in wellness for their employees.

“[Lilly gives its employees access to] onsite fitness and care clinics, and access to free gym memberships and health coaches.”

Developing more effective treatments and making them available to people are keys to better health and financial savings.

“Pricing new medicines in a way that reflects the value they are likely to deliver to the health-care system and to society is the best way to assure that breakthroughs continue.”

“Fortunately, advances in information technology and health-care modeling can help us estimate the value likely to be delivered by more effective or targeted treatments.”

“To that end, my company recently has been piloting what are known as “value-based contracts” with a couple of large health insurers.  In one case, for example, Lilly agreed to base a portion of our payment from the insurer on how well a particular product reduces or avoids re-hospitalization due to complications in certain heart-attack patients with a stent.  More hospitalizations and increased expense to the insurer mean a lower payment to Lilly, and vice versa.”

We can speed the development of new medicines if we create the right environment needed to promote more breakthrough treatments.

“There’s a lot that “we”—and by that I mean biopharmaceuticals companies, academic researchers, physicians, and government regulators—can do to pick up the pace, if we can work together.”

As Dr. Lechleiter outlines, our power to change the marketplace and research clinic is greater than we might realize. He has a simple call to action for regulators and drug developers: “Let’s just get on with it!”