Hartford Business Journal

www.HartfordBusiness.com October 5, 2015 • Hartford Business Journal 5 PDS has been meeting the needs of the construction industry since 1965. Our dedicated team of design and construction professionals welcomes the challenge of serving its past and future customers on their most demanding projects. Kaman Secure Data Center | Bloomfield, CT PDS Engineering & Construction served as Construction Manager at Risk for a new remote data storage center at the Blue Hills Campus of Kaman Corporation, a diversified company specializing in aerospace and industrial distribution. To ensure safety and protection, the facility was designed to withstand a direct helicopter impact. Project Features: - 18" reinforced concrete walls and roof - Dual electrical service - Two backup generators capable of operating the complete building load Total Project Size: 6,000 SF 107 Old Windsor Road, Bloomfield, CT 06002 (860) 242-8586 | Fax (860) 242-8587 www.pdsec.com DESIGN BUILDERS • GENERAL CONTRACTORS • CONSTRUCTION MANAGERS SPOTLIGHT ON: Technology PDS ENGINEERING & CONSTRUCTION, INC. THINK • PLAN • BUILD Can the market fix healthcare costs? By Matt Pilon mpilon@HartfordBusiness.com B y now, most news consumers have heard of a company called Turing Pharmaceuticals, which jacked up the per-pill price of a recently acquired AIDS drug by more than 4,000 percent. Turing and its CEO Martin Shkreli, who openly defended the decision before later yield- ing somewhat to public outcry, became "the latest poster child for monstrosity in the world of [drug] pricing," said Dr. James Sabin, profes- sor of population management and psychiatry at Harvard Medical School and director of Harvard Pilgrim Health Care's ethics program. The question is what to do about the exor- bitant costs of pharmaceuticals and health care in general and what role government should have in that discussion? The answer depends on what the market, which has sig- nificant competing financial interests, can achieve on its own, according to Sabin, who spoke at a Connecticut Health Council break- fast in Hartford last week. Sabin, who described himself as conser- vative and leaning towards a market-based approach to health care, admitted that private industry hasn't made much progress in reduc- ing drug prices and other healthcare costs. "Can the market adjudicate that?" Sabin asked. "It hasn't happened so far." Sabin, who gave the keynote at the Har- vard Pilgrim-sponsored event, also partici- pated in a panel discussion that included State Comptroller Kevin Lembo, PhRMA lobbyist Sharon Brigner and former Con- necticare CEO Mickey Herbert. The discus- sion that ensued was a microcosm of the national debate over drug pricing. Though insurers and drug makers straddle opposite sides of the fence on who is to blame for the United States' expensive healthcare system (relative to other developed countries) there was some talk of industry collaboration to help slow the overall health cost curve. As a representative for drug makers, Brigner was arguably on the panel's hottest seat. She said the media and government put too much focus on drug prices, when they account for just a fraction of total healthcare costs. The largest cost drivers, she said, are long-term care and hospitalizations. Brigner said she would like to see efforts focus on ensuring patients take their medica- tion as prescribed. She pointed to a 2013 study from the IMS Institute for Health Informatics, which calculated that medication adherence could slash health spending by $213 billion. Sabin, meanwhile, said he thinks drug prices should be better tied to their value. For example, Gilead's Hepatitis C drug Sovaldi, which costs about $1,000 per pill before rebates, can cure the disease, and is therefore worth more than another drug might be, he said. If the industry can't control costs, Herbert, who led Harvard Pilgrim's entry into the Con- necticut market in 2013 as a consultant, con- tended that the government will step in, like it did when public opinion turned on managed care in the mid-1990s for being too profit-driv- en. Herbert was head of the American Associa- tion of Health Plans at the time. "I would argue we're at this crossroads again," Herbert said. "Greater government involvement will occur if the industry can't control prices." Lembo, who oversees healthcare spend- ing on state workers and retirees, which recently saw spikes in prices for specialty drugs like Sovaldi, is an advocate for gov- ernment wielding its authority. The idea of industry working together to reduce costs is nice, he said, but he has a hard time believ- ing it can happen. "My confidence level in our ability to do that has gone up and down over time," Lembo said. There are inherent clashes between the interests of insurers, drug makers and providers, and industry is often effective at convincing lawmakers that the high costs of insurance or procedures are justified, he said. Consumer expectations also play into the challenge. They want "the best, the brightest, the shiniest, now," Lembo said. "Fix me. I don't care what it costs." Lembo said expensive specialty drugs and compound medications have reduced gains the state has made in recent years in controlling costs through preventative care and by reducing emergency room visits. While those drugs represent barely more than 1 percent of total prescriptions, they rep- resented about one-quarter of the state's $337.8 million in overall pharmacy spending last year. "I'd like to see some of the promised pay- off over time on some of these," Lembo said. "In the short term, I'm not sure we're mak- ing great ground." n (Left to right) Sharon Brigner, Mickey Herbert and Kevin Lembo. Dr. James Sabin, Harvard Medical School professor and director of insurer Harvard Pilgrim's ethics program. H B J P H O T O S | M A T T P I L O N

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