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Eye of the Beholder


Last week, we took a look at what health-care executives were saying at the Democratic National Convention in Denver. One take-away: Everyone wants reform, but they mostly focus on how the other guy reforms.

This afternoon in downtown Minneapolis, I chatted with David Brennan, chief executive of AstraZeneca, who was named chairman-elect of trade group PhRMA in May. He, too, said ??e need health-care reform, in a big way.?/p>

So I asked: What should the pharmaceutical industry’s role be in fixing the system? How can it help improve care and reduce costs? What sacrifices is it willing to make in the process?

His answer, by and large: continue researching, making and marketing drugs. "The only thing the industry can do is bring forward products that make a difference, and then it's up to society whether it's worth it," he said.

Developing effective drugs and getting them to market will help make Americans healthier, or keep them that way, he said. If good asthma medications are available, and patients can afford them, "you don't end up in the emergency room with your kid."

He argued that, at about a tenth of the health-care dollar -- a figure he said had remained constant for decades -- the pharmaceutical industry wasn't a big driver of health-care costs. (Brennan was speaking off the cuff, and he was close: the Kaiser Family Foundation says prescription medications accounted for 14.3% of spending from 1996 through 2006.)

He said the industry could probably help patients be more conscientious about taking their medications. For example, a graduated pricing system for drugs, in which they are charged less in later months, could essentially reward patients for sticking with a treatment regimen "rather than just saying, here, we did our job, we got you a bottle of pills."

Such an approach would presumably sell more pills, he acknowledged. But it also has the potential to keep people healthier. But in the end, he pointed out, drug costs for many patients are determined largely by their insurers, not the drug-maker.

"There needs to be different incentives in the system," for all participants, Brennan stressed. And the pharmaceutical industry will adapt.


Steve Ballmer, Power Forward
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