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As a country, we spend approximately $500 billion on prescription drugs. Specialty drugs account for less than 2% of prescriptions but will cost us over $250 billion (that\u2019s in 2021)\u2014so, 2% of prescriptions but half the spend. Specialty is the fastest-growing segment of healthcare spend and is a dominant issue that self-funded employers and other purchasers face.

But let\u2019s dig into that $250 billion being spent on specialty drugs, shall we? I have to say, personally, that if we spent $250 billion but saved more than that in medical costs or if the patient quality of life went up measurably or if life expectancy or overall survival or whatever metric you used to assess quality \u2026 if that big spend produced even bigger returns/results, I for one would be like, \u201cOK, trade-offs. Let\u2019s discuss.\u201d

But the thing is, clinical trials and real-world evidence alike suggest that there\u2019s a lot of patients who don\u2019t really benefit from the expensive drugs that they are taking or were prescribed, and even those who benefit might not get the results that they\u2019re hoping for or even de minimis expecting.

In this healthcare podcast, I am talking with Pramod John, CEO of VIVIO Health; and he makes a couple of great points about all of this that I\u2019ll repeat here and then he\u2019s gonna say them again later in this episode but in context\u2014and probably better.

There was some research done that showed for a really popular, really expensive drug, only 2% of patients who took it got the expected, maybe promised, benefits.

But 100% of the patients who took that drug got bad, in some cases dangerously bad, diarrhea. This situation is really kind of typical.

A drug will work great for some people, mediocre for other people/patients, and not at all for, say, the remaining what might be majority of patients. So, you\u2019ll have 2 patients where the results are out of the park, 23 patients where results are pretty darn good, 25 patients reporting meh results but something you can actually still point to, and then maybe 50 patients who see absolutely no improvement in anything.

So, here\u2019s an important point: Maybe there\u2019s, let\u2019s just say, 3 drugs or 10 drugs in this therapeutic category, and that same patient distribution is true for all of them\u2014except different drugs may work for different people. So, by enabling access to all the drugs, you can see that patients have a better chance of being in one of those first groups where they actually get results because there\u2019s more drugs that they can try and different drugs work differently in different people.

But now, let\u2019s consider the way that we pay for specialty drugs: One or two of them get on formulary typically, and then all the others are excluded. That said, the purchaser, patient, and/or taxpayer is gonna pay a whole lot of money for those drugs regardless of how well they do or do not work. And with fewer drugs on formulary, there\u2019s less of a chance that results gold will be struck. But we\u2019re gonna pay a whole lot of money, also in terms of human life, to deal with the direct and cascading side effects of drugs whether they do or don\u2019t work.

I have to admit, I kind of have a new appreciation for so-called me-too drugs after this conversation. Let me just add that here for the record.

My guest today and next week is Pramod John, who is the founder and CEO over at VIVIO Health. VIVIO contracts with self-insured employers and helps their employees/members/patients (whatever you call them) get the right drug. They actually expand access, and the employer saves money. After what I just said, you might be cottoning on to why.

The show this week concerns the reality of specialty drugs and what the terms efficacy and effectiveness really mean because they might not mean what you think they mean. As inconceivable as that might feel, I learned something. You might, too. And there are implications\u2014big implications\u2014for all of this for patients/members/employees. Or you and your family. In this episode, we also define and discuss the terms NNT (number needed to treat) and NNH (number needed to harm), which are really important and, in my humble opinion, do not get discussed enough\u2014especially with patients who need to know these things to make informed choices.

Next week\u2019s show is also with Pramod John, and we get into how what we talk about here intersects with rebates and formularies. Come back for that. It\u2019s probably a 400-level class in specialty pharmacy rebating, but some of you will appreciate it.

Pramod John, PhD, is the team leader of VIVIO, a public benefit corporation whose mission is to ensure that drugs work in the real world for the people on them and that their costs reflect the value provided. VIVIO\u2019s model has improved health outcomes and generated 35% to 40% savings on drug acquisition costs. It accomplishes this by answering three simple questions: (1) Is this the right drug? (2) Is it a fair price? and (3) Is it working for the patient?

Before VIVIO, Pramod was founder of Oration PBC (acquired by PokitDok), which gave consumers control over their drug purchasing by capturing the prescription in the physician\u2019s office and providing real-time pricing options and automatic routing capabilities. Pramod was also vice president of strategy and innovation at McKesson, the world\u2019s largest healthcare company. At McKesson, Pramod helped develop solutions that leveraged advanced technologies and business process improvements to optimize healthcare delivery systems, infrastructure, and supply chains.

Earlier, Pramod founded and served as CEO of PacketMotion, Inc, a venture-funded startup in the enterprise network information and policy management industry. VMware later acquired the company. In addition, Pramod founded netExaminer.com, a managed-vulnerability assessment company acquired by SonicWALL.

Pramod earned his PhD in electrical engineering from the University of Illinois at Urbana-Champaign. He serves on the board of Wycliffe USA. He also serves on the advisory board of Folia Water and as a mentor at StartX.

05:34 What does a good response mean in pharmaceutical products?
06:06 \u201cDifferent people get different utility out of something.\u201d
06:31 Why doesn\u2019t efficacy mean what you think it means in terms of pharmaceutical products?
08:40 What is the difference between efficacy and effectiveness in Pharma?
09:10 Why aren\u2019t drugs\u2019 major side effects factored into a drug\u2019s efficacy and effectiveness?
10:14 \u201cWhat\u2019s the benefit of this versus what\u2019s the harm in this?\u201d
13:35 \u201cClearly as consumers, we all feel that we\u2019re special. But what about physicians?\u201d
14:14 \u201cThe benefit itself\u2014what does it have to be?\u201d
15:18 EP334 with Sunita Desai, PhD.
17:11 \u201cWe tend to think of things as a binary distribution\u2014it works or it doesn\u2019t.\u201d
18:22 \u201cThe default choice that we start with is often the wrong one.\u201d
20:54 \u201cIt doesn\u2019t matter why if we can\u2019t fix the reason.\u201d
22:02 \u201cAt some point, the question becomes, \u2018Do we have any information?\u2019\u201d
22:36 Why do other developed countries pay less for their drugs?
24:21 How do we end up with crappy drugs on the market that don\u2019t really move the dial?
25:57 EP303 with Anna Kaltenboeck.
27:22 \u201cWe can build a better system. And that\u2019s what we do every day.\u201d

Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

What does a good response mean in pharmaceutical products? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

\u201cDifferent people get different utility out of something.\u201d Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

Why doesn\u2019t efficacy mean what you think it means in terms of pharmaceutical products? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

What is the difference between efficacy and effectiveness in Pharma? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

Why aren\u2019t drugs\u2019 major side effects factored into a drug\u2019s efficacy and effectiveness? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

\u201cWhat\u2019s the benefit of this versus what\u2019s the harm in this?\u201d Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

\u201cClearly as consumers, we all feel that we\u2019re special. But what about physicians?\u201d Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

\u201cThe benefit itself\u2014what does it have to be?\u201d Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

\u201cWe tend to think of things as a binary distribution\u2014it works or it doesn\u2019t.\u201d Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

\u201cThe default choice that we start with is often the wrong one.\u201d Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

\u201cIt doesn\u2019t matter why if we can\u2019t fix the reason.\u201d Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

\u201cAt some point, the question becomes, \u2018Do we have any information?\u2019\u201d Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

Why do other developed countries pay less for their drugs? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

How do we end up with crappy drugs on the market that don\u2019t really move the dial? Pramod John discusses #specialtydrugpricing on our #healthcarepodcast. #healthcare #podcast #pharma #specialtypharma #specialtydrugs

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