Unpleasant truth: the pandemic, record debt and our opportunity for sustainability
Pierre Bourdage via pharmaphorum
Sep 09, 2020
Sandoz’s Pierre Bourdage looks at the unexpected secondary impacts of COVID-19 on countries and healthcare systems, and asks how pharma can help improve sustainability to tackle them.
It is undeniable that the COVID-19 pandemic has had a tremendous impact on all aspects of our lives, with ripple effects continuing to evolve. Faced with constant and overwhelming information about the pandemic, including rapidly changing policy responses, there is also an alarming acceleration of a healthcare sustainability issue that needs more of our immediate attention. If leaders in healthcare choose to take on this unpleasant truth now, we will gain precious time in implementing available solutions that can help increase our chances for a sustainable healthcare future.
Record global debt will create more financial pressure on healthcare systems
The International Monetary Fund issued a sobering warning last month that the pandemic has caused global debt levels to rapidly increase by nearly $10 trillion in just 6 months. Debt levels are projected to very soon surpass the historic levels reached during the second world war, as a proportion of GDP.1
It’s important to understand that at the height of this past global record debt in the 1940s, governments were able to dramatically and quickly reduce enormous military spending and re-direct those funds to infrastructure investments, which helped rapidly drive employment and economic growth. In our case today, we are rapidly ‘piling on the debt’ to now record levels, but the evidence strongly suggests governments are going to have a much harder time finding areas to cut back, as many were running record deficits prior to the pandemic.2
Given this, we must accept that the record global indebtedness we now face will no doubt greatly affect us in the years ahead, including healthcare system sustainability, which was already facing significant ‘pre-COVID’ cost sustainability issues.
“Can healthcare systems afford to, in a post COVID world awash with record debt, demand a significant influx of additional budgets to address fast growing costs?”
Let’s explore cancer care in the context of increasing financial healthcare pressure. Due to the increase in cancer incidence, combined with the growing investment in disease prevention, diagnosis and treatment, more resources are being spent in cancer than ever before, therefore cancer care has already been facing well known financial sustainability challenges.3
In fact, an estimated 21.2 billion USD will be spent in cancer care worldwide this year (2020), compared to 13.8 billion in 2015.4 This tremendous growth in healthcare costs is not isolated only to cancer care. Healthcare costs have been growing ahead of inflation for many years, and our ageing population will result in even higher future demands for care.
Can healthcare systems simply afford now, in a post COVID world awash with record debt, to demand a significant influx of additional budgets, or even more debt, to address fast growing costs? In a post COVID world, it’s reasonable to conclude this won’t be possible without putting into jeopardy the financial sustainability of not only our healthcare systems, but our larger economic systems as well. This is indeed an unpleasant truth, but by recognising and prioritising it, we can turn to action.
Is it all ‘doom and gloom’, or are there potential solutions?
Solving the healthcare financial sustainability paradox will require many solutions. Advancements in global healthcare system efficiency scoring has evolved5, which enables countries to access healthcare efficiency benchmarks and stress test their ability to drive down costs to best in class country benchmarks. Furthermore, scientific and technological advances are also helping to unlock efficiencies across the care pathway and create better joined-up care.
Much of this was being driven by digital innovation even before COVID-19. For example, clinical decision support systems, driven by AI tech, are starting to help physicians sift through data and diagnose diseases as early as possible – a key goal for any system hoping to reduce the burden of disease.
Meanwhile, embracing ‘paperless’ digital working for healthcare workers had long been a goal for the UK’s healthcare system, the National Health Service (NHS), in the run up to the pandemic. In the NHS’ case, it now seems likely it will achieve its 10-year goals for digital sustainability much more quickly than anyone could have anticipated.
Companies across the industry had also been increasingly partnering with healthcare systems to facilitate joined up working and patient support, and it would be reasonable to say that COVID has solidified that healthcare systems and the industries that serve them should be ‘doubling down’ on digitisation to drive patient and healthcare system productivity.
In my role at Sandoz, I work with teams that are passionately trying to drive healthcare sustainability through the increased use of high-quality biosimilars.
In the US, biologic medicines represent 2% of medicine budget volume yet represent 37% of net drug spending.6 Globally, reference biologics represent 400 billion USD in annual medicine costs. 7 With a typical price difference between reference biologics and biosimilars in the range of -15% to -80%, the immediate potential budget impacts are in the tens of billions.8
Beyond significant cost savings, biosimilar uptake has been shown to simultaneously improve patient access, varying by country. In England for instance, the introduction of a biosimilar to prevent neutropenia in patients undergoing chemotherapy, resulted in a number of Strategic Health Authorities reassessing their guidance relating to this medicine. A subsequent change in guidance moved this biologic to a first-line treatment, resulting in an increase in the number of patients who could receive this much-needed treatment by 104%.7
Governments do not have to look hard to find ample opportunity for their health systems to accelerate biosimilar adoption practices and drive huge healthcare savings while still delivering excellent high quality patient care, as noted openly by the FDA during the last 18 months.9
Unpleasant truth: let’s embrace it and take action
As we manage through this pandemic, with various countries being in different stages, the focus is on keeping safe and supporting society from deep economic impacts, as much as possible. When the day hopefully comes where a vaccine is widely available, we will be relieved of the great stress and uncertainty of this time.
But our unpleasant truth will still be there, and we likely will feel even more optimistic about our future if, through this time, we have doubled down on healthcare sustainability via acceleration of healthcare digitisation and biosimilar medicine adoption.
For those of us working in healthcare leadership, these need priority consideration and leadership now. Richard Sullivan, Oncologist and member of the Lancet Oncology Commission for Sustainable Cancer Care Commission in High-Income Countries, writes that “We are… at a crossroads where our choices, or refusal to make choices, have clear implications for our ability to provide care in the future.” 10
We don’t have all the answers today on healthcare sustainability, but now is the time to put greater emphasis, consideration and focus on ensuring our decisions and actions today are fostering a sustainable healthcare future.
Together we can help drive affordability and sustainability in a post COVID-19 world. Let’s lead and act now – there is no value in waiting.
About the author
Pierre Bourdage is global head of biopharmaceuticals at Sandoz International.