The Apprentice is In – Bolstering Biomedical Innovation with Discourse & Training in Technology Commercialization

This April marks the fourth offering of the B-BIC Skills Development Center’s (SDC) hallmark event, The Commercialization Apprenticeship Panel Series, from which this blog gets its name. The event, entitled “Science in the Spotlight: Why Media Training Matters,” scheduled for April 14th, 4-7PM at Massachusetts General Hospital, will highlight the importance of communicating science to the general public for the advancement of researchers’ science and careers. As in the past, the talk is free and open to the public, though will predominantly cater to Boston’s prominent biomedical community – particularly investigators, clinicians, and institutional leadership.

Since the B-BIC SDC inaugural kick-off event in the fall of 2014 – the first panel in the Series on “Faculty Perspectives on Commercialization” – we have hosted close to twenty seminars and workshops on topics relevant to technology commercialization (see SDC YouTube). In addition, we’ve continued the Panel Series with additional biannual forums on “Working on Cross-Disciplinary Teams” and “The Different Flavors of Fundraising.” Given this flurry of activity, it seems fitting to reflect and recall what inspired us to create the Series in the first place. However, to do so effectively, requires we revisit the SDC’s founding mission and vision, and get to the core of why this work matters.

At the most basic level, we recognize that a lot more than good science is needed to solve society’s major medical problems. The SDC Director, Elliott Antman, M.D., has a long history of leading and growing clinical and translational education programs (e.g. Harvard Catalyst Education). As a practicing cardiologist, a senior investigator on international multicenter clinical trials (TIMI Study Group), and Immediate Past President of the American Heart Association, he infuses the SDC with deep knowledge and a broad perspective. In an interview for this blog post, Dr. Antman stated that “scientific discovery is necessary, but not sufficient, to improve health. A process is needed to translate discoveries into treatments and deliver them to patients.” Remarking on the collaborative nature of this process, Dr. Antman continued, “Academic scientists do not make products. Academic scientists do the profoundly important work of discovery. At B-BIC, we’re fortunate the NHLBI recognized the need for an ecosystem that facilitates the process of bringing these academic medical discoveries to the public.”

Beginning in September 2013, the NHLBI (National Heart, Lung, and Blood Institute) established the NIH Center for Accelerated Innovation (NCAI) Program to support academic scientists in pursuing early-stage technology development. B-BIC was one of three national Centers seeded – the other two are based out of The Cleveland Clinic and University of California. “NIH and NHLBI have long been committed to supporting resources that enable pre-clinical studies,” said Dr. Jodi Black, Acting Director of the Division of Extramural Research Activities, NHLBI. “The NIH Center for Accelerated Innovation is a landmark program that builds on the foundation of existing R&D investments and recognizes the critical role of investigator cross-training to ensure the resulting breakthrough innovations move rapidly and effectively into available products that reduce the health burden of heart, lung, blood, and sleep disorders and diseases.”

Although still in its youth, the B-BIC Skills Development Center has already become a hub for investigator education and professional development. The SDC Managing Director, Cheryl Vaughan, Ph.D., Ed.M., shared that the Center is “driven to create a culture of accessible learning and support for innovators and, ultimately, promote the application of new skills to the process of transforming science into technologies that benefit patients.” The Commercialization Apprenticeship Panel Series was instituted as part of Dr. Vaughan’s vision to engage the research community in conversations on key commercialization skills, to provide a bridge between young innovators and seasoned veterans, and to follow up discussion with practical hands-on learning opportunities.

As an event centered on discourse, our panels are designed to bring varied perspectives to the table. We think a healthy amount of tension in the room helps difficult subjects bubble to the top for much needed attention. Without it, how can we even begin to break the mold of what’s currently known and understood? Some difficult conversations generated during our panel discussions include: 1) conflicts of interests at the interface of academia and industry, 2) personal and institutional incentives for innovation and collaboration, and 3) navigating confidentiality during the process of innovation.

A common thread throughout the SDC’s offerings is that “it takes a village to improve human health.” For today’s discovery to become tomorrow’s breakthrough drug, device or diagnostic, it’s important we recognize that you can’t go it alone.

The panel discussion on April 14th is sure to revive many of these issues while exploring new grounds related to media relations. Please join us for what’s sure to be a lively evening and bring your diverse perspectives and questions center stage. Register today.

Paying it Forward – MIT Series Taps Serial Entrepreneur Scientists for Lessons on Commercialization

As one of today’s most accomplished scientist-entrepreneurs, it is hard to believe that Dr. Robert (Bob) Langer nearly missed getting his start in academia altogether. It’s the type of story line that could be easily discarded as a piece of academic folklore, unless you were to hear it directly from the man himself. This type of candid disclosure from experienced entrepreneurs is exactly the goal driving the MIT Fireside Chat Series on “The Do’s and Don’ts of Scientific Commercialization.”

This series is the brainchild of Isaac Stoner, a current MBA student at MIT Sloan, Health Care Sector Practice Leader at the Martin Trust Center for MIT Entrepreneurship, and trained biomedical engineer. The idea came to him as a result of his participation in a Harvard Business School course on “Commercializing Science”, run by former Vertex President Vicki Sato (covered here by STAT), which delved into “the decisions and strategies that make large and small organizations effective at innovating in life science.” It seemed a natural progression for him then, to create a forum in which expert scientist-commercializers can share insights earned from experience.

For these discussions to bear fruit, they hinge heavily on having compelling questions from the audience and a comfortable, informal setting. It is designed to be like an engaging conversation between two friends in their living room, except in this case, the living room happens to be the main amphitheater at the Broad Institute, packed with onlookers hungry for tips. Bill Aulet, Senior Lecturer at the MIT Sloan School of Management, experienced founder, and MIT Trust Center Managing Director, serves as the armchair moderator, and according to Isaac, “has a way of getting people talking” during these informal chats.

Here is a recap of a very animated fireside chat with Bob Langer. (Setting the scene: a digitally projected fireplace flickers in the background):

• DO – Take Risks in Tirelessly Pursuing Your Passion – In his words, "pursue what makes you happy." For Dr. Langer, that starts with basic science discovery. In a 2012 New York Times article, H. Kent Bowen, Professor Emeritus of Harvard Business School, who authored a 2004 case study on the Langer Lab, divulges that “Bob is not consumed with any one company. His mission is to create the idea,” which can serve as fodder for industry to further develop into life-saving therapies. Dr. Langer remarked during his talk that fairly early on in his career he recognized the value of startup companies compared to large companies – to a large company, his licensed technology may be just one of many in their development portfolio, while the startup might be focused solely on making that one technology work. After receiving his doctorate in chemical engineering, Dr. Langer turned down some twenty job offers from oil companies, whose missions weren’t of much interest to him, to pursue his academic and clinical passions.

• DO – Celebrate & Encourage Teamwork – For a man that has over a thousand patents and a thousand publications to his name, his greatest accomplishment of all might be the assemblage of the world’s largest biomedical laboratory. Over the years, to effectively shepherd new biomedical technologies across commercialization’s infamous “Valley of Death” between early-stage development and potential patient benefit – a stretch of road where so many technologies fail – he’s relied on a cadre of industry partners, academic colleagues and apprentices. He estimates that he’s had over 270 lab members to date, between the post-docs and students who come to him for training in today’s cutting edge bioengineering technology and techniques. His trust in the process and in other people to carry forward his vision has served to multiply his downstream impact: it’s estimated that he’s touched over two billion lives through medical innovations that have their roots in his lab.

• DO - Effectively Manage Time – Dr. Langer, to his credit, somehow manages to balance all of his competing responsibilities – between his research, industry advising, teaching and mentoring. Along with his illustrious track record of scientific impact, he has amassed an equally notable reputation for always being available, as he responds to outreach from students and colleagues alike with lightning speed at all hours of the day. Could his greatest triumph be tapping into a previously unknown 25^th hour in the day? The same New York Times article (2012) on the Langer Lab sheds some light on his daily planner, stating that “he spends about eight hours a week working on companies that come out of his lab. Of the 25 that he helped start, he serves on the boards of 12 and is an informal adviser to 4.”

• DO – Seek Guidance & Mentorship (*Apprenticeship) – As Dr. Langer recounted, Dr. Judah Folkman, a renowned surgeon at Boston Children’s Hospital and member of the faculty at Harvard Medical School, through his sheer persistence, showed anything is possible. He served as an inspiration to those getting their start in his lab, like Langer, who would later model themselves and their careers after him. *A topic for a future blog post!

Dr. Langer seemed to have an impeccable ability for seeing the bright side of things – though he turned out to be a human treasure trove of interesting pieces of science history! So in place of “Commercialization Don’ts”, we’ll instead have an installment of ‘FUN FACTS’:

• In 1975, at the time Bob Langer was getting his start in academia, Dr. Judah Folkman, then at Harvard, had just inked a record $23M industrial grant from Monsanto to support his cancer research. In the wake of Dr. Folkman’s historic commercial deal, the tides of academic-industry R&D collaborations began to change.

• In 1980, The Bayh-Dole Act opened the floodgates for academic innovators and institutions to take ownership in the form of patents over intellectual property developed with the support of government funds. The patented technology could then be licensed to industry to be commercialized, ushering in a new age of innovation.

• Fast forward forty years later: The intersection of Vassar and Main Streets by MIT and Kendall Square is heralded as the most innovative in the world.

Next up in the MIT Fireside Chat Series on Commercializing Science:

James Collins, PhD, Termeer Professor of Bioengineering at MIT, Core Faculty Member at the Wyss Institute, and Member of the Broad Institute – “Founder of the field of synthetic biology and a pioneer in systems biology.”

Date/Time: Friday, February 26, 2016, 12-1PM. REGISTER!

Location: Massachusetts Institute of Technology (MIT), 45 Carleton Street, Building E25-111, Cambridge, MA 02142. (MIT campus map)

Event Description: “Dr. Collins will address questions around his experience in turning scientific discoveries into real biomedical impact, including the founding of Synlogic, Sample6, and EnBiotix. Event will be moderated by Bill Aulet. Please Tweet questions to @billaulet ahead of the event.”

Out of the Lab & Back – Insights on science media coverage

Boston Business Journal’s BioFlash, MIT Technology Review, STAT, Xconomy – go-to science and technology publications with established local presences and a collective readership stretching near and far – assembled representatives for a power-packed panel at JLABS’s (Johnson & Johnson Innovation) “Out of the Lab and Into the Newsroom.” The cast of journalists intended to shed light on media relations for the area’s mission-driven science community, which is characteristically so laser-focused on forging new frontiers of human knowledge that they could admittedly use a reminder about the merits of communicating their science to the general public.

We were situated atop the major fault line of Kendall Square; the epicenter of life sciences and technology operations. The majority of the crowd seemed to be communications professionals eager for tips on how to get media coverage for their constituents. Scientists themselves seemed to be sitting this one out; and although the lab is difficult to abandon, knowing how to communicate a scientific breakthrough is a skill worth having.

To the biomedical community, it should come as no surprise that journalism, like all professions, has its share of jargon. There’s spin, pitching, the beat, embargos, etc. These terms carry a great deal of weight, and understanding their meaning, through the lens of a journalist, can be a useful primer for our approach to media relations:

• Pitching is where you let your science shine. An effective pitch takes 10 words to explain the novelty and impact. “Start with the end of the story first – for medicine, that’s the benefit to patients” advised Rick Berke, Executive Editor for STAT, a veteran of the field having held previous posts at Politico and The New York Times. The last thing you want to do is pitch a reporter “a solution they can’t understand for a problem they’ve never heard of,” explains MIT Technology Review Biomedicine Editor, Antonio Regalado. When considering the complexity of scientific advancement it might be hard to imagine boiling your work down to 10 words – but it’s a must if you want your science to get out of the lab. The panel’s advice: remain high-level and limit the technical terms in your pitch. You’ll know if you’ve done your job when you get a question in response, prompting you to dive a little deeper into the science. 

• Spin is something you want to limit – it equates to selling. Although, it’s important to be persuasive, it’s a balancing act, as nearly all of the panelists remarked on having an aversion to over-promotion. 

• The beat refers to a journalist’s parameters for reporting, i.e. their theme and target audience. Each publication and reporter is different, so do your homework and tailor your pitch to their preferences. 

• Embargos dictate to reporters what to say and when to say it, and typically denote an understanding of exclusivity, but not always. In a practical sense, they are a potential remedy for keeping confidential information from leaking prematurely. I learned, some publishers will not accept terms for an embargo on their reporting, and it is probably good to know in advance where a media outlet stands on the use of content embargos.

Recognizing that effective communication is imperative to the advancement of science, the B-BIC Skills Development Center (SDC) has placed it center stage in this year’s commercialization curriculum. This fall we’ve already held workshops on presentation skills, elevator pitches and uses of PowerPoint. In the spring, we’ll continue with opportunities to improve your communication through use of data visuals, pitch coaching, and media training through our fourth installment of the Commercialization Apprenticeship Panel Series. As always, the SDC YouTube Channel serves as our video library for all previous offerings.

So just how important is communication to the advancement of science? Melissa Marshall, one of this year’s instructors for the B-BIC Skills Development Center’s series of communications workshops, puts it provocatively – “science not communicated, is science not done.”

Another way to think about it: Does a scientific advancement confined to the lab, make a sound (have an impact)? It’s a question worth considering.

Inspecting the Innovation Narrative: where it’s been, where it’s headed

As a popular buzzword, innovation has accumulated serious mileage over the years. It has made its way out of the garages of Silicon Valley and into the boardrooms of nearly every modern employment sector (industry, government, academics), and even into our everyday conversations. Interestingly, the word is also accompanied by a lack of consensus on its meaning.

One simple definition of innovation is: “the introduction of something new.” However, if we examine a few examples of how the word is being employed, it becomes clear this is not the operational definition:

“Innovation is the new currency in today’s Idea Economy.” ¹ 

“Everybody's innovating, because any change is innovation.” ² 

“There are many skeptics about the value of incremental innovation...” ³ 

“Disruptive innovation is competitive strategy for an age seized by terror.” ⁴

"CEO prescribes innovation for all that ails big pharma" ⁵

"Forbes Asks CMOs: What's Your Innovation Agenda?" [video] ⁶

And there are many more examples to be found, each with a different shade of meaning. Unlike “innovation”, we don’t see the same confusion and broad use of other related “i”-words: inspiration, ideation, invention, and improvement. 

Perhaps the ambiguity around the word innovation results precisely because it represents a composite and is derived from these other “i”-words. If innovation is the introduction of something new, how did this new thing come about? There was probably an initial inspiration that lead to more formalized ideation and a selection of the best ideas. When the refined idea becomes a product, we have an invention. Is invention the same as innovation? Thousands of inventions come through the United States Patent and Trademark Office (USPTO) every year, a substantial number of which never make it to market. Sometimes old inventions are used in new ways or in combination with other products such that the process or product is actually new. Perhaps the new application of an old invention or a combination of inventions, when there is value derived from it, is a place we can land for thinking about innovation. 

What, then, separates an innovation from an improvement?⁷ Both speak to some kind of change, but the difference is in the magnitude. Improvement is incremental change. Innovation is on a larger scale. Perhaps innovation is transformational change.

“Disruptive innovation” is a popular phrase coined by Clayton Christenson8 in the mid-1990’s when new IT products were fast changing the way we live and work. There was a true transformative change through the production and use of new digital technologies. While innovation was becoming the new industry standard, “disruptive innovation” arose as a term for identifying the truly innovative individuals and companies. Perhaps the rise in use of “disruption” as a qualifier for innovation is a sign of how truly transformative the change experienced at that time really was.

So where does the innovation narrative go from here? Forcing the word into a tidy corner to meet our preferences is likely not our best bet. We can consider using the word seldomly, or not at all, as some have argued ^{9 10}. Or we can be analytical and ask the following questions to assess whether an invention is also an innovation: (1) Did it become a commercial product? (2) How widely used has a new product become? (3) How much value is derived from its application? An innovation should score high on all three. 

How we choose to talk about innovation and the significance we place on it is important. Beyond an intellectual exercise or collegial banter, this word has been assigned some hefty responsibilities. Governments and industries around the world invest billions of dollars on research and development every year in hopes of launching the next great innovation to address unmet societal needs.11

One thing seems clear: the innovation narrative is here to stay. Although, we may never know where it will take us and may only appreciate its value in hindsight, much like the innovations themselves. 


A note on additional sources: Examples of innovation in government - White House ^{12 13}, Health & Human Services (HHS) ¹⁴, Centers for Medicare and Medicaid Services (CMS) ¹⁵, United States Agency for International Development (USAID) ¹⁶, United Nations Children's Fund (UNICEF) ¹⁷; in academia - Stanford ¹⁸, Harvard i-Lab ¹⁹, and Beta Boston's coverage of entrepreneurship at Boston-area universities 20. Influential individuals, some referenced directly or hyperlinked above - Clayton Christenson 21, Scott Berkun 22, Jay Walker 23, Stefan Lindegaard 24. The word cloud from the accompanying image was created by pooling quotes on innovation by famous figures throughout history representing industry, government and academia, compiled by BrainyQuote.

Teams Pitch Once More at Culmination of CIMIT/B-BIC Boot Camp, Sure to Not Be Their Last

The program ended as it had begun: with a pitch. Just as the teams had done on day one, except this time armed with loads more insight on the value of their innovative business concepts garnered from a combined 500 customer interviews, they assumed their place in front of a room full of strangers turned peers and mentors to present how, with their idea, patient care would be forever changed. 

Over the course of the seven-week intensive program that was the CIMIT/B-BIC i-Corps Healthcare Commercialization Boot Camp - a life sciences version of the "Lean Launchpad" course developed by Steve Blank at Stanford, now widely adopted by the NSF and NIH - ideas and the individuals behind them were put to the test. Through an iterative process and interactive course design, the teams refined their business concepts, in some cases making a complete 180 (or “pivot” as the entrepreneurs like to say) from where they started, as they received guidance from expert coaches from CIMIT and B-BIC and invaluable feedback from their fellow participants – entrepreneurs, technicians and clinicians in their own rights. Though without a doubt, the most valued perspectives were that of the potential customers (“buyers”) and consumers (“users”) of the product or service.

The process teams underwent during the course of the i-Corps program falls entirely under "Search" in the above diagram. The threshold created by the dashed line, marks an organization's transition from the "Search" to a phase of "Execution", i.e. from a start-up / early-stage to a more developed company. 

In the complex world of healthcare, the nature of buyers and users can change dramatically depending on the product. This meant that teams had to be intentional in targeting their interviews for specific players who could help address key questions related to their product and its potential application. While one group is interested in polling clinicians, another is focused on hospital administration, and still another is isolating the government and NGO funding community. In reality, most cast a net that covered some mixture of the above, with one prevailing commonality being the shared interest in bringing the benefit to patients.

In ritualistic fashion, Mike Dempsey, Accelerator Program Lead at CIMIT and Entrepreneur-in-Residence at B-BIC, succinctly summarized the experience by reminding the group of what drove them to be here: “patient impact” as their “metric for success”. Traditionally, the ideas themselves, the fodder of innovation, are what receive the lion’s share of attention in the forms of financial backing (e.g. NIH funding) and mainstream media coverage. But, as Mr. Dempsey asserted, “patient impact requires a two-part equation”, with the idea itself occupying one space, and the “path to patients, in some cases through commercialization” filling the other. In the latter area, money has tended to be more difficult to come by, especially for early-stage companies or technologies (pre-company formation) - labels appropriately suited for nearly all in attendance - coming out of academia.

What the Boot Camp sought to do was flip the traditional dichotomy on its head – turning attention away from the particularities of the technology, to instead focus almost exclusively on the path to patients. This required getting outside of comfort zones, and in a literal sense, getting outside, period, as participants were pushed to talk to increasing numbers of people and seek an excess of information over a dearth of it. The resulting difference seen in the second-go at their team pitches was obvious, as all who spoke that day exhibited greater confidence in their ideas and validation for their unique approaches to improving the patient experience.

At the culmination of the program, the usual undertone, all too familiar on the hallowed grounds of the surrounding institutions of higher education, was made clear; that this is not an end, rather it’s a beginning. With the knowledge and experience gained from their rigorous training, the next time these participants take the stage they could be vying for the potential to bring their innovation to an even greater scale, in an effort to meet patient need.

* Those interested in learning more about the "Lean Launchpad" approach to building Start-Ups should visit the online course site at Udacity for a detailed curriculum outline and the opportunity to take the course online for free!

Meeting & Mixing of the Minds at BU OTD’s Tech, Drugs, and Rock n’ Roll

It was an evening full of collisions of all kinds at the Boston University Office of Technology Development’s 6^th Annual Tech, Drugs, and Rock n’ Roll (TDRR) held in the George Sherman Union on BU’s campus set along Boston’s Commonwealth Ave. Entrepreneurs, academic scientists, industry folks and funders from venture capital and government / non-profit entities alike mixed and mingled over the course of an eventful evening. Much of the action centered around “Funder Alley” – a row of booths and monitor displays that featured many of the area’s funders of upstart biotechnology, including your own B-BIC. Kingsley Flood provided the ambiance, laying down tracks of clashed brass, percussion and string over vocals that spread out atop the clamor of casual conversations springing up from across the convention hall floor.

Starting from humble roots in 2010, TDRR has quickly developed into the premiere biotech networking event of the summer, drawing larger and larger crowds year-to-year, while continuing to turn out up-and-comers from the local Boston music scene - this year’s Kingsley Flood having been recognized several times over by local outlets for their Americana style hits. New this year was the aforementioned Funder Alley as well as the MAPP - Mobile App Development Contest, which awarded cash prizes to the top three mobile app ideas. The contest’s inaugural first-prize went to J. Gregory McDaniel, PhD, Associate Professor of Mechanical Engineering at BU, and Chiraag Devani, an engineering undergrad at BU, for their “Study BUddy” mobile app idea. Keeping with the vibes of a summer college cookout, there was grilled food and cold drink aplenty, and even a couple of cameo appearances by none other than Rhett the Boston Terrier mascot, who was seen rocking out beside the band and lofting t-shirts from the catwalk above to the frenzied party goers below.

With all of these ingredients mixed together, you have the makings of a concoction that affords the opportunity for both fun and meaningful connections to be made between the diverse crowd of attendees from Boston’s many universities and industries. It may feel like it’s always been the case that innovation has just tended to well up from university settings, particularly from those formidable Boston-area research institutions like BU, Harvard, MIT and Northeastern. But, it’s nights like tonight that remind me that it can’t hurt to attempt to help usher innovation along, by providing opportunities for more casual collisions to occur at an event like BU’s TDRR or by providing financial and educational resources for investigators and their nascent projects to grow forth. The key is, whether serendipitous or belabored, innovation isn’t likely to happen without a few collisions.

A sampling of photos from the evening - (from L to R, bottom to top) the B-BIC booth was a hotbed of activity, Kingsley Flood and Rhett supplying the R&R, the mouth of Funder Alley, sign on Commonwealth Ave. beckons!

A Nuanced View of the World of Drug Development & its Value to Society

It’s not every day that you have the opportunity to play audience to a preeminent biotech company’s chief executive (in Boston it’s more like every other day), so I couldn’t pass it up when I learned Genzyme CEO David Meeker, MD, would be sitting down with Boston Globe Life Sciences Reporter Robert Weisman for a “fireside chat” (hold the fire) hosted by the MIT Enterprise Forum at the Broad Institute of MIT & Harvard in Cambridge’s Kendall Square. Equally compelling was the thought provoking topic of conversation; “The Value of Drug Development: Can Society Afford Today’s New Wonder Drugs?” Given Dr. Meeker’s previous clinical and academic accomplishments as former Director of the Pulmonary Critical Care Fellowship at the Cleveland Clinic and Assistant Professor at Ohio State University, plus a variety of high-level managerial undertakings with Genzyme prior to becoming CEO, he seemed uniquely positioned to offer a nuanced take on the world of drug development and its value to society.

The drug industry, well represented in this part of town centered on Kendall Square, over its history has played the part of the regular scapegoat for all that is wrong with big business in America. A lifesaving drug might fill a void by addressing a formerly untreatable disease, but with price tags that are known to reach into the five-six digits for an annual regimen, it’s hard to say simply if this is an overall net positive for society. One can’t help but think it might be exchanging one problem for another – now your disease is under control, but your finances aren’t. And how does this look on a societal level with all the different players involved – payers, providers, regulators, patients, etc.? Very quickly we begin to find ourselves in a tangled mess.

Luckily, on this occasion, Dr. Meeker was there to help us sort this out. In particular, he provided insights on a critical piece of the equation: How do drug companies come to price their drugs? Far from an expert on the matter, what I will share is in many ways a shorthand for the intricate process that takes place, as I offer a summary of the discussion from that night:

The drug pricing picture takes initial form with a few key considerations: the cost of development for bringing the drug to market, the prevalence of the condition it’s designed to treat, and the comparative clinical value that the drug provides. In the rare disease world that Genzyme occupies, treatments can sometimes have a target population of less than 10,000 (an example being Gaucher’s disease, for which Genzyme offers several treatment options priced at $300k/yr.) In these cases, for a company to recoup its investments from their sales of the drug and continue to produce innovative treatments, can it only work out if the drug carries a six-figure price tag? Lacking many of the elements of a market system (namely no competitor drugs and “customers” having no choice as to whether or not they have a given condition), how does one arrive at a “fair price” – where all sides win? The payers, e.g. CMS and private insurers, play a key part here, as they take on the role of determining coverage and negotiating what’s reasonable in terms of price (though the exact mechanisms through which these processes take place can differ from country to country). The payers also shield patients from much of the financial burden of affording a given treatment – though in the US, it’s still not too uncommon for patients to face a sizeable enough bill to make me take pause.

As we look to the numbers we see that drugs account for roughly 10% of total health expenditures. So it might be fair to say they’re given a disproportionate amount of the attention when it comes to what drives overall costs to the system. Dr. Meeker also noted that payers typically turn over larger chunks of the cost of drugs to patients compared with hospital care, as average coinsurance coverage amounts to 19% and 5%, respectively. One is left to wonder what sort of effect these types of cost sharing breakdowns have on the system. Is this the best means for extracting the most value from our treatments?

As I find myself mapping out the connections between many of the different players involved, I realize that painting the picture of modern healthcare quickly becomes an overly complex task. For one, a static representation won’t suffice given the lightning pace at which innovation proceeds and the system adapts. 

Looking forward, Dr. Meeker offered his thoughts on some of the major developments that he felt could have broad implications for how we develop and eventually pay for our treatments. Firstly, he acknowledged that the market for biosimilars (generic versions of biologics) is on the horizon with the EU and US having recently laid the regulatory framework for new approvals in this area. This could dramatically impact price as the number of different treatment options for a given condition could multiply rapidly, and lend itself to a price war between new arrivals and off-patent originators. Of similar importance is the healthcare system’s present shift to value-based payment models focused on clinical outcomes. With changing incentives underway, it will be interesting to see how cost structures evolve in the coming years. Similarly, the advancement of more precise means for categorizing conditions and calibrating treatments, what many call “precision medicine”, could also further segment drug markets, as treatments cater to indications comprising smaller and smaller patient cohorts, and affect overall costs.

Coming away from the talk, I was almost dizzy from the number of different thoughts I had swimming around in my head – the primary challenge was to keep it all straight. A task that I think many working in healthcare can relate to. An ever-changing, increasingly complex healthcare system lends itself to many a challenge in organization and coordination, but it’s undeniable the amazing outcomes it can produce – the “wonder drugs” of today being the closest thing our society has to modern miracles. With all the attention paid to big pharma and biotech, due or undue, it’s worth bringing light to the importance that the other players in the system play in creating the types of medical innovations that save lives. Without a piece of it, the whole system might falter. So while the question of whether our drugs are too expensive is fair, one should not expect the answer to fall neatly between binary lines (good or bad). More appropriately, a nuanced view is called for – what should be a far from surprising result in the worlds of health and healthcare.