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- The biggest healthcare investor conference starts on Monday - here are the top 5 areas we're keeping an eye on
The biggest healthcare investor conference starts on Monday - here are the top 5 areas we're keeping an eye on
Who’s next to merge?
How will we pay for seven-figure drugs? What about other costly treatments?
The issue of paying for medications is now a constant conversation for the drug industry, with prices continuing to go up even after political pressure in 2018. We'll definitely be keeping an eye on pharma's 2019 plans.
But a new wrinkle that's quickly coming into focus: How are we going to pay for one-time treatments?
Already, treatments like cell therapy for cancer treatments and a gene therapy for a hereditary form of blindness have tested the waters.
But more are in the works. That includes Novartis' gene therapy for spinal muscular atrophy, a rare genetic condition that affects muscle movement in children and is the leading genetic cause of mortality in infants that could be approved in the US by as early as May 2019. When that happens, Novartis said it would be cost-effective at a price of between $4-5 million.
It might take some new payment arrangements to get health insurers on board to cover the cost of treatment, such as paying in installments over a set amount of time. What that looks like and who takes the lead on that will be a big question that should get answered in 2019.
How has the pharma-payer power dynamic shifted?
In 2018, two massive healthcare deals closed, redrawing the lines around what defines a healthcare company:
The health insurer Cigna combined with Express Scripts, which manages pharmacy benefits. And CVS Health, a big pharmacy chain that also owns a drug benefits business, acquired the health insurer Aetna.
We'll find out a lot more this year about the strategies of the combined companies. Both new firms will be looking for places to cut costs, as well as seeking to gain more control over how patients access healthcare. It's happening at a time when new medications are getting approved that challenge the way we pay for treatments.
It remains to be seen how the two newly formed healthcare companies wield their new negotiating power, and how drugmakers will respond to that increased pressure.
Is this the year for marijuana-based drugs?
It was an action-packed year for cannabis, and 2019 is shaping up to be even livelier.
Most of the excitement was driven by British drugmaker GW Pharmaceuticals, whose marijuana-based drug Epidiolex won regulators' approval over the summer. That caught the eyes of analysts at JPMorgan, who launched coverage of GW Pharma the day after New Year's. The bank thinks Epidiolex could surpass $1 billion in yearly sales by 2023.
Epidiolex's key ingredient is CBD, the second main compound in cannabis after THC. But unlike THC, CBD does not get users high. Instead, the compound is believed to be responsible for many of marijuana's therapeutic qualities, from pain relief to helping to stop epileptic seizures.
Importantly, CBD can be sourced not only from marijuana plants but also from hemp. So when the latest Farm Bill made hemp legal, entrepreneurs and manufacturers braced themselves for a hemp-derived CBD boom.
Also, shortly after Epidiolex's approval, GW Pharma CEO Justin Gover told us he has his sites on getting another marijuana-based drug called Sativex approved in the US next. That drug contains THC as well as CBD and would be used to treat pain and multiple sclerosis.
What will Amazon do?
A year ago, Amazon's potential to get into healthcare was anybody's guess.
That changed quickly at the end of January 2018, when the tech giant struck up a joint healthcare venture with JPMorgan and Berkshire Hathaway that aims to bring down the cost of healthcare spend. The still-unnamed venture tapped surgeon and professor Dr. Atul Gawande in June to be CEO and has made a few other key hires.
Later in June, Amazon acquired online pharmacy PillPack, a small startup that mails prescriptions to people who take multiple medications. The news sent a whole host of pharmaceutical and drug-wholesaler stocks tumbling.
There's still a lot we don't know about Amazon's healthcare strategy, and that should have the healthcare industry worried. While retail pharmacy giants seem to be setting up delivery services that could protect them from Amazon, it remains to be seen if drugmakers or other parts of healthcare will need to find new ways to be competitive.
Whatever Amazon ultimately does in healthcare, part of its strategy will likely captalize on the power of voice — not simply as a means of helping physicians streamline their workflows, but also as a clinical tool for diagnosing everything from colds to depression in patients. The latter involves sensitive data, however, and BlueShield California CEO Paul Markovich warned us the company may not be setting a high enough bar for privacy.
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