Editor's note: This article appeared in the April 11, 2011, edition of Quirk's e-newsletter.

Pharmaceutical Marketing Research Group (PMRG) annual national conference keynote speakers former Governor Howard Dean and former Senator Bill Frist recently tackled the future of health care reform and what it may mean for the pharmaceutical industry. The late-March discussion left the audience encouraged about the evolving realities of reform and inspired to continue the conversation about new ideas for successful implementation.

Examining the Affordable Care Act

The presentation kicked off with a look at the Affordable Care Act and what it means for patients, the health care and pharmaceutical industry and the nation as a whole. Both former physicians agreed that while the bill addresses only one piece of the health care puzzle (expanding access) and will likely be stripped of its individual mandate portion by the Supreme Court, it is significant in setting some ground rules from which a national dialogue and greater reform can emerge. "Today is different," said Frist. "There is some element of certainty out there ... and with that certainty, smartly we can get together ... and make a big difference."

Pushing reform forward across the U.S.

They also agreed that much of the reform will come at the state and private sector levels and that it will need to address the untenable costs of health care while also improving or maintaining quality - a tall order indeed.

So how do we get there? The former legislators agreed on some points, namely that the current fee-for-service health care model needs to shift toward a model that emphasizes primary care physicians and accountable care organizations (ACOs), in which all care for a large group of patients is coordinated within one network that gets paid a flat per-patient fee. As expected, however, they disagreed on some of the details.

According to Dean, the main issue is that the current free-market, fee-for-service system doesn't work in health care because it encourages doctors to do more to get paid more, resulting in unnecessary procedures and soaring costs. Dean noted that even in a capitated care system, a push for profits is in direct opposition to the needs of patients. "HMOs are a really good idea," Dean said. "But when HMOs go public and are traded on Wall Street, you then set up this enormous ... conflict where the fiduciary responsibility to the shareholders is on one side and the moral responsibility to the patient is on the other."

To this end, Dean advocated placing nonprofit hospitals at the core of ACOs and encouraging these systems to invest more heavily in less-expensive and more-effective disease prevention rather than high-cost, technology-intensive care of advanced disease. The former governor also supported the establishment of state health insurance exchanges to add greater transparency in the purchase of health insurance and impose limits "so you can't buy junk."

Conversely, Frist argued that profit in health care is a positive but agreed that greater transparency and a move toward value-based savings are key. He called for ACOs with a shared-savings cost model, which rewards health care systems or providers with a portion of the savings attained by reducing total patient costs. Frist also advocated for greater information and connectivity through such technology as online ratings for doctors and hospitals that would allow consumers of health care to make more informed choices.

What reform means for pharmaceutical marketing

Dean also brought the issues closer to home for the audience of pharmaceutical marketing researchers. Touching on the fact that "big pharma" has often been an ideal target of blame in the conversation about soaring medical costs, he noted that medication cost needs to be brought into perspective against the cost of other health care services. From his view, pharmaceuticals have saved us "an enormous amount of money" rather than driving up costs as many people believe. Dean noted that a patient suffering a major heart attack who, 30 years ago, would have been in the hospital for 10 to 14 days, can now be out in three to four days because of medicine. "If you think it's expensive to take some of these cardiac drugs ... yeah, they're expensive, but they're a whole lot cheaper than $3,000 a day for a coronary care bed."

Dean pushed for greater advocacy for the biopharmaceutical industry, both from legislators and patients. "We can't lose the biotech industry ... but it's happening," he said, citing a combination of factors, including the move toward offshore clinical trials and licensing as well as an increasingly risk-averse FDA and insufficient patent protection. Dean called for a greater debate about risk-benefit analysis with the FDA, spurred by patients who understand that when it comes to pharmaceuticals to treat serious disease, "without risk, they die," as well as patent extension to protect U.S. companies in order to spur greater innovation.

In an open question-and-answer session following the presentation, the speakers addressed a wide range of concerns from the impact of reform on physicians to the need for greater transparency in pricing and the disparity between prescription drug prices in the U.S. compared to the rest of the world.