On this episode of The Road to Care, we’re joined by industry thought leader Dr. Scott Howell and special guest co-host, SamaCare CEO Syam Palakurthy. Scott is best known for leading innovations to improve coverage, reimbursement and affordability of medicines as well as services supporting patient access at GSK, Genentech, Jazz, and Novartis. Scott has been teaching, researching and writing about improving pricing and access of medicines for 15 years, primarily at the University of California – Berkeley, and is a thought leader on the topic of value-based pricing and access for medicines. Scott spent the first decade of his career in clinical medicine as a general internist.
Tune in to this episode to learn:
And, be sure to check out Scott’s podcast, Prescription for Better Access: (https://open.spotify.com/show/659fsjTHJGdqHdfrmqDBkw).
[00:00:00] Kip Theno: Welcome to the Road to Care podcast hosted by SamaCare, where we will talk with key opinion leaders, physicians, administrators, manufacturers, venture capitalists, and legislators to get their insights on the state of health care today and where we see it evolving. SamaCare's prior authorization platform is free to clinics, ensuring patients get on the right therapy at the right time.
[00:00:20] Together, we can simply make things right.
[00:00:25] Hey, everybody.Thanks again for joining the Road to Care podcast hosted by SamaCare. And todayour special guest is Dr. Scott Howell, MD, MBA. Scott is widely respected industry advocate and leader for patient access to medicines. He began hiscareer as a general internist and after a decade in clinical medicine, went towork on improving health services more generally.
[00:00:46] He worked in grouppractice administration, insurance plan administration, pharmaceuticaldistribution and services, and at four biotech and pharmaceutical companiesincluding: GSK, Genentech, Jazz, and Novartis. Scott is best known for leadinginnovations to improve coverage, reimbursement, and affordability of medicines,as well as services supporting patient access.
[00:01:08] Scott has beenteaching, researching, and writing on improving pricing and access of medicinesfor over 15 years, primarily at the University of California, Berkeley. Andhe's a thought leader on the topic of value based pricing and access formedicines. Scott now advises a number of companies that continue to work onthese and related challenges in health care. And we have a very special co-hosttoday none other than our CEO at SamaCare Syam Palakurthy my wingman I'm, notsure what the call sign is going to be and of course since he's my boss, thisbetter be a good good show Syam and Scott.
[00:01:41] Great to have you ontoday
[00:01:43] Scott Howell: Thanks, Kip. It's great to bewith you.
[00:01:46] Syam Palakurthy: Kip, thank you for letting mejoin. I feel like I've been on the sidelines here being like, put me in, coach.So I'm excited that you're finally letting me take my shot.
[00:01:55] Kip Theno: Well, I know that you and Scottactually have some history, Syam. So I'm going to, I'm going to turn past thetorch to you.
[00:02:00] Syam Palakurthy: Yeah, absolutely, thank you,Kip. And Scott, I'm really excited to be having this conversation, you know,we've obviously gone back, at this point, I think five years now, as we werevery early in our, our journey with SamaCare.
[00:02:13] You know, Scott, I'mreally excited to be having this, partially because, you know, in a lot ofways, I think about you as one of the godfathers of pharmaceutical patientaccess and support. Kip mentioned the Novartis experience, the Genentechexperience, and that's very close to our hearts here at SamaCare.
[00:02:31] But I'd love toactually just have you start by telling us a little bit about all of thatcareer and the pieces of your career going even beyond that. So we'd love tohear how you got to this place in your career.
[00:02:43] Scott Howell: Oh, sure. I'd be happy to, Syam.I feel very fortunate, looking back on things.
[00:02:48] I, as Kip mentioned,I started my career as a physician. I was a general internist and, worked inclinical medicine for about a decade. And even then, you know, the experienceof practicing medicine was that all too often, really, the administration andbusiness processes and, misalignment of incentives and so on got in the way of,what you wanted to do with patients. And I got really interested in that. Iwanted to learn more about it. I ended up going back to school and getting abusiness degree, as Kip mentioned and started to work in health services tolearn more about it, and also, I think, to see if I could be helpful in anyway, make a difference in it.
[00:03:31] The easiest transitions from practicing medicine was to transition, obviously, to group practice administration, which is what I did. And then from there, I got a chance to work part time at initially part time at a health plan. And then, that became full time later on.
[00:03:48] And then based on those experiences in, 1997, SmithKlineBeecham recruited me to join them in their managed care division, because, of the emergence of PBMs, basically beginning to put together formularies, and manage these things, and talk about population health management and, you know, pharmacoeconomics and health outcomes and all those sorts of things. SmithKline Beecham, in many respects, was kind of a leader in that domain from the life sciences industry and so it was for me, it was a place to go learn some new things.
[00:04:23] I had never worked in a big global company. I'd never worked in a for profit company, hadn't worked in life sciences, hadn't worked on somebody that was trying to make an impact in disease management, and other areas as well. And one thing led to another and I spent the next 25 years in life sciences. It was great.
[00:04:41] I enjoyed really, every company I was with and every role I had, I found the mission I'll say to be a worthy one. And I found the puzzles to be interesting. I enjoyed the business to business relationships. I enjoyed the negotiating, and the most rewarding part of it all was the work that you guys do, and you know this well, but it was the patient services work.
[00:05:06] It was the whole, the part, and the whole company, not just in the market access groups, but in the whole company, where you were most closely connected to patients and their outcomes, their relationship to the medicines that your company was providing and then ultimately their outcomes, and you could see in a very real way, day today, the difference that you were making for patients and they were just incredibly grateful. I know all the people that I've worked with in the years in patient services know exactly what I'm saying and feel the same way.
[00:05:39] It's filled with aremarkable group of people who are super committed to the work they're doing ,and feel the same way about the value of it and the importance and theircommitment to it. And, as one of my old bosses used to say: it's not by chance.And there are a lot of people working in that area.
[00:05:54] And I know it's truefor you guys too, that it's not by chance. It's because you care.
[00:05:59] Syam Palakurthy: Yeah, yeah, absolutely. And,you know, we, we talk about this all the time, it's like for all the hardstuff, there's lots of hard stuff, if you can just get a few more patientsthrough what can be a horrible, horrible process, that's so meaningful.
[00:06:13] Scott Howell: Yeah, absolutely. So it was, itwas tremendously rewarding. I had the opportunity to retire from that phase ofmy career, the big company, life sciences kind of stuff, about two and a halfyears ago. My wife and I returned to our family home in Columbus, Ohio.
[00:06:31] And now I have thegood fortune of, being a freelance agent and working on things and with peoplethat interest me. And so I'm doing more teaching. As you know, I've got apodcast myself that I co-host with Mark Hansoncalled Prescription for Better Access.
[00:06:48] I'm doing some volunteer work at a gene therapy research institute, helping them with their research investments. I'm on a National Academy of Medicine committee. I've got some advisory relationships with the health tech startup space. My hope is that, this space that you're obviously part of can be a new important lever in helping solve some of the challenges that we face and the patients face. And so I'm learning about that through a relationship with a venture capital company and some of their portfolio companies and also private equity firm. And then also I have, uh, with a partner of co-founded actually what we hope will be a new kind of pharmaceutical company that our aim is to do all of this work, including, all the way back into the research and drug development, , smarter, better, faster, cheaper so that we can provide the medicines more cheaply and continue to sustain innovation for the next 20 or 30 years.
[00:07:51] Syam Palakurthy: I love that. And by the way,Scott, I feel like it's hard to describe what you just called retirement asretirement feels like there's not a lot of retiring that's happening, but Ilove that you're so active and continuing to explore things that are interestingfor you. I want to actually dig into one of those topics on the cost side.
[00:08:11] And obviously it's always a big topic is what is the cost of a drug for patients for the system, et cetera, which is fascinating and an interesting conversation in its own right. But we'd love to hear you talk about the cost to just bring those therapies to market. And, you know, I saw a stat about it costing somewhere around two and a half billion dollars to get through the process, the failures, et cetera,
[00:08:35] Help us understandwhat is driving that cost? Because I have to think that has huge downstreamimplications for what we all pay as patients, consumers of the system.
[00:08:45] Scott Howell: Sure. Yes. So the industry business model. Is one where the revenues from the medicines on the market today fund the research and drug development for the medicines of the future.
[00:08:58] And the biggest challenge I'll say, including the biggest driver of the cost is the failures along the way, the, the oft-sited statistic is that only 1 in 10 medicines that enter phase one ever , see an approval and it takes dozens or hundreds to go from scratch, the front end, to the first phase one.
[00:09:23] And so the expenses associated with all those medicines that never make it add up and they have to be covered in any case. And when you allocate that across the portfolio, then that means in an all in kind of basis for every one that makes it, the estimates from the academics and others are that you've had two billion dollars plus, spent to get to that place and certainly that does contribute to in a very substantial way the pricings of the medicines. Having done pricing at a number of companies It's not so much on a direct one-to-one basis "hey this medicine costs so much to develop, and therefore we got to charge so much"but rather "the enterprise with its portfolio of medicines knows that overtime it has to really pay attention to the shareholders, an investment return that's in alignment with expectations for the industry and the amount of risk it's taking.
[00:10:19] And so you absolutely, it's true that you have some medicines where you make relatively more money and others where you make less, but in the aggregate, you kind of have to hit that mark in order to earn the right to continue to, to do the work. And so that expense, that total expense, whether you look , on a per average approved product, or some other way, has to be covered and contributes to the high cost of therapies.
[00:10:45] Now, more recently in recent years, there are a couple of other big drivers as well. One is that when I started in the industry, the, the big important medicines were so called primary care medicines. These were generally pills, smaller molecules, for large conditions affecting big populations of patients.
[00:11:05] So hypertension, diabetes, cholesterol, asthma, depression, peptic ulcer disease, osteoarthritis, and soon. And in that business model, you had a, , relatively speaking, a very large number of patients and a low per patient price. And over time, those medicines are all now generic And they're available at very low cost, a tremendous value to patients and to society, but it's next to impossible to go back and relaunch a new medicine in those categories and try to compete with those generic medicines.You wind up in non-preferred positions on formularies and 4th or 5th or 7th or8th line therapy and so you can't just charge a price that is going to make that make sense. And so increasingly what's happened and it's been permitted by the science as well as it's gotten more personalized I'll say. The company research has turned more and more to smaller and smaller population conditions.
[00:12:06] The so-called specialtyconditions that are usually managed by specialty physicians and oftentimessubspecialists. And so that could be conditions like multiple sclerosis orrheumatoid arthritis or various types of cancer. And now, as you know, it's morecell and gene therapy with really small populations. And so, so thesepopulations may have a few hundred thousand patients or a few tens of thousandsof patients who are in the gene therapy categories, maybe just a few hundredsor even dozens of patients. And to make a business model work where you'retargeting, you know, 50, 000 patients, let's say, rather than, 30 million, youjust have to charge, a very different price.
[00:12:49] So now we're in a very small number of patients, business model, but very high per patient prices. And obviously, that draws more attention from the payers and the PBMs and, and more intensity of management and has resulted in the kind of access environment that we have today.
[00:13:10] Syam Palakurthy: Absolutely, where it's so hard sometimes to get over that hump.
[00:13:14] You know, you're really getting at a few different issues. One, at least end results, the cost of the drugs that do come out, sometimes even for what I'll call downright miraculous drugs. And then of course, some of these other conditions where there's maybe some broken incentives or some misaligned incentives to actually be helping or to be focusing on those other kinds of states that might affect a lot of people, but where there's very, very inexpensive drugs to compete against.
[00:13:42] You have a hypothesis, at least, for how to at least tackle some of these, these challenges. Can you walk us through that?
[00:13:50] Scott Howell: Yeah, well, it was interesting, as I reflected, this dates back to the period of time in my career when I was transitioning out of Genentech and my wife and I had aging ailing parents back in Ohio, and we had decided to try to, to move back to Columbus and, to be more available.
[00:14:09] And I took a job atCardinal Health and their specialty divisions, which included their manufacturer services. And I was reflecting on my experience at, um, Genentech, where I had most recently been running the patient services programs there, which, at the time were, mammoth industry leading , programs. And in retrospect, and even though, as I just, as I said earlier, I value the work so much in many respects as I reflected on it, so much of it felt potentially unnecessary. So from my perspective as a physician, I know like for patients with multiple sclerosis, those patients are not only seeing Neurologists, they're typically seeing, you know, multiple sclerosis subspecialists and , no patient is taking an MS medicine that doesn't need it and no doctor is prescribing one for a patient that doesn't need it. And, in my mind, the likely value of a prior authorization from a payer, and again, I say this, having worked at two payers myself, was pretty limited and yet I knew all the friction that it creates and the fact that sometimes, patients and doctors don't navigate their way through and patients fall all too often really, end up not on the therapy, that was prescribed.
[00:15:31] And so it just felt like a lot of this friction and expense was um, perhaps unnecessary. And I knew that the cost of all that stuff, the contact centers and the field reimbursement managers and the copay cards and the free goods and so on, just got priced into the overall business model. So we were talking earlier, just like the research, that's a cost of business that has to be covered.
[00:15:56] As I continue to reflect on this, and this was oftentimes as I was preparing for some of my classes at Berkeley, trying to explain this to other people, eventually it dawned on me more and more that really, what one side of the room wanted was pricing moderation for manufacturers and what the other side wanted, manufacturers, was better access for patients and that in a logical rational world a trade ought to be possible. And instead we had this system that delivered just the opposite, we have a drug pricing and access system in the US that actually contributes to higher prices. Again, the manufacturers know all this friction and loss and patience is coming, and sot hey just price that into their prices. And then lots of scrutiny and intense utilization management and friction, and that's very expensive. One of my teams, we did some research on that, and it's a mind boggling number, the cost of all that navigation.
[00:16:59] And then thirdly, then so many patients actually not getting on the medicines that they need or not staying on the medicines when it's time to renew. So we have a system that actually encourages higher prices, lots of friction and waste and low access for patients.
[00:17:15] And what we all really want is just the opposite. We want fair prices and then when we get them we want good access for patients. And so I started writing about and promoting that as a potential solution a voluntary trade of, we called it fair prices for fair access at the time. It was a major focus of work for me for some time, including for the first year after I left Novartis, I had the good fortune to work with a transparent startup PBM, where the founders believed in this kind of approach as well.
[00:17:49] And we pitched it for a year, both to industry and to plans and plan sponsors. Unfortunately what we learned at least at the, at the time, was that the system players were too locked in. They all hate the current system, and they understand the challenges associated with it.
[00:18:07] But it's the system they know that they'veaccommodated to and they worry about the risks of taking a step in a differentdirection and whether they'll be penalized somehow or disadvantaged somehowif they do so. And so it's kind of it's locked in unfortunately at this point
[00:18:26] Syam Palakurthy: Yeah, change is always sohard.
[00:18:28] Scott Howell: Yeah,
[00:18:28] Syam Palakurthy: it's always so hard. And evenif it changed for the better, it's still not an easy sell. , But I do want totalk about, there's a fundamental change or a fundamentally different approachthat you're taking to a different aspect of the system.
[00:18:40] Scott Howell: Yeah
[00:18:41] Syam Palakurthy: Um when it comes to drugdevelopment, can you tell us a little bit about that?
[00:18:46] Scott Howell: Yeah, so this actually alsostarted out as an academic and research project. A number of years ago while Iwas doing this research and writing and speaking about these things and theirunintended consequences for doctors and patients, a colleague of mine from thedrug development world who has spent his career in Europe, was also beginningto worry about them.
[00:19:10] He was seeing declining reimbursement in European markets. And like me, he was starting to worry about the business model that has sustained innovation and its continued health and viability, for the next twenty or thirty years. And so the problem question, kind of writ large is in a world and at a time of declining global reimbursement, how does this high cost, risky, lengthy, enterprise set of endeavors, adapt itself for the future so that innovation can be sustained.
[00:19:44] So, he decided, five years ago, to go back and get a PhD and explore FinTech, whether or not the world of financial technology and some of the approaches there and the technology would have applications, perhaps in helping life sciences companies adapt to this. He recruited me as a , collaborator in his PhD program, kind of a thought partner, research partner, advisor, for it. And so we began studying that space, and since then, we've interviewed, I'm sure, hundreds of folks that are involved in drug research and development and commercialization subsequently, both inside companies, but also , all the way back to academic scientists, founding entrepreneurs, venture capitalists, and a whole host of other players as well.
[00:20:34] Ultimately the journey led to about two years ago our founding of a Swiss nonprofit organization and entry into an incubator program in Switzerland to learn about the use of fintech platforms to recruit global communities of scientists working on problem categories in common and helping to source from them scientific research and potential assets for further investment and development. And then screen and select the best from that sourcing and then matching that with funds as well.
[00:21:15] And so we learned quite a bit about, that process and we've adapted it, as life sciences executives. We've now built upon that and adapted that and integrated it with our earlier research into a more comprehensive approach that we hope will permit us to create the world's first global, fully decentralized pharmaceutical company. We're hoping to prove that an approach like this can be better at sourcing and screening and selecting assets, but then also better, faster and cheaper and more successful in doing the drug development and then the subsequent commercialization.
[00:21:55] The goal was to be able to reduce that cost of failure and all the other costs enough that we can bend the cost curve in the medicines, make them more value based in terms of their pricing, and thereby, more available for patients around the globe that need them.
[00:22:12] This is a moresustainable manner for the next 20 30 40 years. That system that we had that I described earlier, it worked wellfor a long time and we've got all these great generic medicines now because ofit. But it's straining to keep up with where we are now.
[00:22:28] Syam Palakurthy: Yeah I love the boldness of a global decentralized pharmaceutical enterprise. I think it's a really cool idea. We'd love for you to talk just a little more: what do you think about that enables solving for the cost of failure, as you put it, or just the challenges of which drugs you might be, which conditions you might be solving for.
[00:22:52] Scott Howell: Yeah, so I think there are a couple of areas that our approach we think has promise. One is in the sourcing and selection of the research and assets for drug development.
[00:23:05] This approach will allow us to create a global community of scientists. It will be sponsored by very top experts who will then recruit their colleagues to join them in this research season, we call them. And within that season, we'll issue a call for applications for scientists who think they have good science and could be ready to turn it into an asset for drug development and a company and they and want some help doing this. There are lots of really good potentially entrepreneurial scientists at these academic centers working on great stuff who don't successfully navigate that transition to company development building, and it's because it's not what they're good at. It's not what they've been trained todo. It's not what they focused on. It's not what they enjoy the most themselves or whatever, but they, they don't know how to get connected with venture capitalists. They don't know how to do pitch decks and start a company, incorporate even, that kind of stuff. So anyway, we're creating a global community. The scientists will recruit their colleagues whom they know might fit that category and want some help to come and apply. And then the community will end up reviewing all the applications, screening them, and then ultimately rank ordering each scientist as an individual.
[00:24:27] And so at the end, if you have a few hundred applications we'll know which 20 percent made the top cut and ultimately which were the very top 10 in order of the judgment of the entire community of scientists. Then what we'll do is we're creating a venture foundry that will support a subset of those, that top 10, some pre seed money and the help they need to recruit a CEO and advice from our personnel and our advisory board and help from our network and connections of CROs and CDMOs and the like.
[00:25:04] And so really we're trying to make it as plug-and-play as possible for the scientists, make it easy for them to make that transition and we're hoping between the wisdom of the crowds, the better opportunity for global sourcing, then sort of the happenstance, you know, process we have today, and then the support and infrastructure we put around them that we'll get both more shots on goal, but we'll also get better quality shots on goal with a better idea towards which are the ones that have the best chance of making it.
[00:25:35] And in that way reduce the cost of some of those failures. That's the value or the potential value we see in decentralizing the front end research. And then in the middle and later stages, you have drug development and you have manufacturing and commercialization and our intent is to decentralize those as well.
[00:25:56] And that part of the enterprise will run like other venture foundries, including the early ones that are have now come to the biotech world. Flagship Pioneering, I would say, is a leading example of that. And so instead of, in a big integrated company like Novartis or Pfizer or BMS, you do your own drug development.
[00:26:18] Now, oftentimes you have vendors that are helping you, but you have a large, dispersed, integrated department of people, typically thousands or tens of thousands of people, who are doing this. We don't see that as part of our decentralized system, instead we would have early startups that are doing this work themselves.
[00:26:41] If there's some advantage to having some centralized center of excellence, then we can build, a pool, a bank of, expertise that the portfolio of companies could call upon. So you don't have to lose all of the value of centralization and scale. But through this manner our hypothesis is you can avoid some of the bloat and the bureaucracy and the slowness and even reduction in quality of decision making that occurs for any of us that have worked inside large organizations. I know it myself. I look back on it. And I know that many of my meetings that I did through the years were low impact meetings and were unnecessary.
[00:27:20] And we had way too many people at them. You know, we could have done it with a fraction of the number of people there. And so many folks were either just, they were waiting to kind of hear what the boss was going to think, you know, about this. And then, you know, how do I line up with that and get on the right side of this issue?
[00:27:37] And so all of the things that are part of human nature and that come with being part of a large complex organization. And so we'll try to change that dynamic in the drug development world and hopefully, make that more effective and more efficient as well. But then, likewise, in the commercialization, we'll replace the large global business units, just as Flagship does, with instead, a portfolio of companies that can partner with our network of collaborators, the CDMOs in this case to do the manufacturing, do the distribution and do the commercialization around the world. And, we'll see. There's no guarantee that this is going to work, but, we've been researching it a longtime. We have reasons to believe. And, I think we're in the good fortune now of being close to be able to launch and test our hypotheses.
[00:28:27] Syam Palakurthy: Yeah, that's really cool. So,so kind of to summarize, I feel like there's a few themes there. One, how doyou use the wisdom of the crowd, so to speak, to get the best ideas from peoplewho might not normally be contributing or might not normally have a voice inthat. Two, how do you take advantage of the decentralized aspect to be able toget ideas and, and work from people all over the world.
[00:28:52] Three. Making itjust as frictionless as possible. Like you mentioned the centers of excellenceand then giving people the right incentives so that they're actually asindividuals and as groups working on the right thing. I think that's reallyfascinating. And, Scott, if this works, ifyou're able to, you know, make it more likely for a molecule to go from thatearly research to phase one, phase two, phase three, or to get drugs out tomarket, what do you think the impact is for patient access which is the themeof this podcast?
[00:29:25] Scott Howell: Yeah, well, I think it dependson how good you could get and we don't know the answer to this. The reality islike if you're targeting super small population conditions, like we talkedabout earlier, the prices are going to be high.
[00:29:39] It just that's tomake the business work. But the question is, like, how high, you know, and andif you if you reflect on it and you say, well, we have the prices we havegenerally in a system that works, , 10 percent of the time, 10 percent of theassets that enter phase one ultimately make it to market.
[00:30:00] What if you couldimprove that by a half, what if you could make it 15%? Or what if you coulddouble it and make it 20%? Or what if you could make it 30%? How much couldprices come down and still return, what the shareholders are expecting in thisspace of risk and time, the time for development and all those things. So we,we don't know. I mean, it's all conjecture at this point. But, you know, when Istep back and think of like, well, what's possible, what could be, it doesn'tfeel like a super stretch to say that, well, maybe we could do half better.There's reason to hope that you can make a large impact. So, you know, that'swhat we'll see. This is a journey.
[00:30:47] We've been on it for five years already, you know, and we're just now start getting started really.And, and the hope is that we'll learn and adapt and the people working with us will learn and adapt this thing will, hopefully it'll survive me long into the future. And, you know, in 20 years or 40 years from now, looking back on it, we'll know really what was possible, but it doesn't, it doesn't , feel crazy tome right now.
[00:31:14] So we're optimistic.
[00:31:16] Syam Palakurthy: Not crazy is good. Not crazy is a good thing. Yeah, no, I love that. If you can change the success rate, then you fundamentally change the economics, which can mean, you know, potentially going back to the very beginning of this conversation, lower, lower potential prices, you know, the, the payers don't need to, don't need to,
[00:31:35] Scott Howell: Exactly.
[00:31:36] Syam Palakurthy: You create the same regime,yeah, I can have all this impact that all the way hits to, you know, patientsare maybe able to get access to more drugs with less friction, less burden,less pain that's extracted along the way. I think it's a fascinating idea.
[00:31:52] Kip Theno: I agree. I mean, the solving the discovery and development is encouraging, Scott, and I want to go back to something we talked about in the pre show, and I don't want the perspective lost here either because you brought it up here that many of these discoveries don't make it to market.
[00:32:06] And that's probably a fact of life. But we also talked about, you know back before the earth cooled, when I was with Merck pharmaceutical, a budding young professional, big hyperlipidemics were coming out the groundbreaking trailblazing COX-2's were coming out, and I saw a presentation where the company said "hey, here's 50 molecules we're working on, and here's the one or two that we think we're going to get over the next one or two years. Well that leaves 48-49 that never make it. I can't imagine not all of those were viable and could have been massive groundbreaking stuff, but cost benefit prohibitive as you're talking about here. What about retrospective?That's just one company out of all of them. How many of these? How many are in the molecular graveyard that could be open sourced?
[00:32:46] Or you could figure out to go back and say,"Hey, these could be viable today."
[00:32:50] Scott Howell: Yeah, great point. Kip. The many of the academic scientists that we've Interviewed and have worked with are very keen to research that and learn about that themselves. The reality is that the companies do have large libraries of drugs and potential drugs including things that oftentimes have already been tested in humans. And they and then so they have some degree of confidence about the safety profile. But because of competing priorities or whatever else the circumstances might have been, they were put on the shelves, and have not seen the light of day.
[00:33:28] And so, many of the scientists we speak to are aware of that and their hope is that we can operate in a low cost enough environment that we can make some of those sleeping assets, if you will, potentially viable in the future.
[00:33:44] And, you know, again, who knows, right? Folks that know me, know I'm a realist. And, and so I guard myself continually against too much what if ism, but at the same time, again, you know, Syam, it's another one of those things that doesn't feel crazy to me that, you know, some of that stuff ought to be able to be repurposed and i t's all already got a head start on, you know, some of the toxicology and, and maybe we can do that for a much lower cost.
[00:34:12] Syam Palakurthy: Yeah, I love this. I love the vision. I love just the taking a really bold approach and a different approach to solve a set of challenges. That's frankly, really big and really important to be addressing. So, Scott, it's been really fascinating conversation. Thank you so much for jumping on.
[00:34:31] Scott Howell: Hey, my pleasure joining, you guys, Kip and Syam.
[00:34:34] Congratulations on all the progress and success you're having as well. This is super important stuff, as you know, and it's valuable to the doctors and practices you serve and also to the patients you serve as well. And I'm glad you're doing it and I'm glad we have people like you, you know taking these challenges on everyday. So thanks for thanks for chatting with me.
[00:34:55] Kip Theno: Well Scott and Syam. Thank you so much and Scott, we're not quite done yet, two quick things: This is profound.We want to get it out to as many people as humanly possible for what you're doing and your insights today. First thing is how do folks reach you out there Scott?
[00:35:09] Scott Howell: Ah, yes, so the company that we're forming is called SynapseSciences.
[00:35:13] And we do have a page on LinkedIn. I personally can be reached at the emailscott@synapsesciences.com. This is one of the joys of what I get to do these days is to network, interact with folks.And I'm always happy to hear from folks.
[00:35:30] So ring me up if there's something I can help with.
[00:35:34] Kip Theno: No, we will. We'll make sure and post all that in the podcast for the episode. And Scott, last question. I always do an Easter egg and I know you're busy and have to go. When we first met, you were wearing a Notre Dame fighting Irish. And as you know, I went to Culver Academies, uh, stones throw away, spent a lot of time up at Notre Dame in the Lou Holtz era.
[00:35:54] Here's my question.Are they ever going to win again?
[00:35:58] Scott Howell: Well, so, you know, every year at the beginning of the year, Kip, I declare, this is our year.
[00:36:05] And now, as you know, it's a high bar, and if you don't win the national championship at a place like Notre Dame, then, you know, it's almost like you didn't win, right?
[00:36:14] But the reality is they've got a great program there. They win lots and lots of games, every year.And most years they're in the hunt until, you know, at least late in the season. And that includes this year. And so Kip, I'm declaring this is our year.
[00:36:30] Syam Palakurthy: By the way, Scott, the way, the way Kip coaches his kids hockey team is you don't win the national championship... didn't do anything.
[00:36:37] Kip Theno: If you're not first, you're last guys, that's it.
[00:36:42] Well Scott, Syamthis was a pleasure to have you on and that's a wrap. Thank you so much forjoining The Road to Care podcast.
[00:36:48] Scott Howell: Thank you.
[00:36:50]
[00:36:50] Kip Theno: Thank you for joining the Road toCare podcast hosted by SamaCare, the leader in prior authorization technology and services, where through a script to therapy operating system, we enable connectivity with clinics, payers, and manufacturers focused on optimizing patient care. Tune in next time as together we can make things right.
[00:37:09] Enjoy the music written, produced and recorded by Jamestown.
Together, we can make healthcare right. Here are some of the outstanding
healthcare organizations and associations championing patient health mentioned in
this episode:
On this episode of The Road to Care, we’re joined by industry thought leader Dr. Scott Howell and special guest co-host, SamaCare CEO Syam Palakurthy. Scott is best known for leading innovations to improve coverage, reimbursement and affordability of medicines as well as services supporting patient access at GSK, Genentech, Jazz, and Novartis. Scott has been teaching, researching and writing about improving pricing and access of medicines for 15 years, primarily at the University of California – Berkeley, and is a thought leader on the topic of value-based pricing and access for medicines. Scott spent the first decade of his career in clinical medicine as a general internist.
Tune in to this episode to learn:
And, be sure to check out Scott’s podcast, Prescription for Better Access: (https://open.spotify.com/show/659fsjTHJGdqHdfrmqDBkw).
[00:00:00] Kip Theno: Welcome to the Road to Care podcast hosted by SamaCare, where we will talk with key opinion leaders, physicians, administrators, manufacturers, venture capitalists, and legislators to get their insights on the state of health care today and where we see it evolving. SamaCare's prior authorization platform is free to clinics, ensuring patients get on the right therapy at the right time.
[00:00:20] Together, we can simply make things right.
[00:00:25] Hey, everybody.Thanks again for joining the Road to Care podcast hosted by SamaCare. And todayour special guest is Dr. Scott Howell, MD, MBA. Scott is widely respected industry advocate and leader for patient access to medicines. He began hiscareer as a general internist and after a decade in clinical medicine, went towork on improving health services more generally.
[00:00:46] He worked in grouppractice administration, insurance plan administration, pharmaceuticaldistribution and services, and at four biotech and pharmaceutical companiesincluding: GSK, Genentech, Jazz, and Novartis. Scott is best known for leadinginnovations to improve coverage, reimbursement, and affordability of medicines,as well as services supporting patient access.
[00:01:08] Scott has beenteaching, researching, and writing on improving pricing and access of medicinesfor over 15 years, primarily at the University of California, Berkeley. Andhe's a thought leader on the topic of value based pricing and access formedicines. Scott now advises a number of companies that continue to work onthese and related challenges in health care. And we have a very special co-hosttoday none other than our CEO at SamaCare Syam Palakurthy my wingman I'm, notsure what the call sign is going to be and of course since he's my boss, thisbetter be a good good show Syam and Scott.
[00:01:41] Great to have you ontoday
[00:01:43] Scott Howell: Thanks, Kip. It's great to bewith you.
[00:01:46] Syam Palakurthy: Kip, thank you for letting mejoin. I feel like I've been on the sidelines here being like, put me in, coach.So I'm excited that you're finally letting me take my shot.
[00:01:55] Kip Theno: Well, I know that you and Scottactually have some history, Syam. So I'm going to, I'm going to turn past thetorch to you.
[00:02:00] Syam Palakurthy: Yeah, absolutely, thank you,Kip. And Scott, I'm really excited to be having this conversation, you know,we've obviously gone back, at this point, I think five years now, as we werevery early in our, our journey with SamaCare.
[00:02:13] You know, Scott, I'mreally excited to be having this, partially because, you know, in a lot ofways, I think about you as one of the godfathers of pharmaceutical patientaccess and support. Kip mentioned the Novartis experience, the Genentechexperience, and that's very close to our hearts here at SamaCare.
[00:02:31] But I'd love toactually just have you start by telling us a little bit about all of thatcareer and the pieces of your career going even beyond that. So we'd love tohear how you got to this place in your career.
[00:02:43] Scott Howell: Oh, sure. I'd be happy to, Syam.I feel very fortunate, looking back on things.
[00:02:48] I, as Kip mentioned,I started my career as a physician. I was a general internist and, worked inclinical medicine for about a decade. And even then, you know, the experienceof practicing medicine was that all too often, really, the administration andbusiness processes and, misalignment of incentives and so on got in the way of,what you wanted to do with patients. And I got really interested in that. Iwanted to learn more about it. I ended up going back to school and getting abusiness degree, as Kip mentioned and started to work in health services tolearn more about it, and also, I think, to see if I could be helpful in anyway, make a difference in it.
[00:03:31] The easiest transitions from practicing medicine was to transition, obviously, to group practice administration, which is what I did. And then from there, I got a chance to work part time at initially part time at a health plan. And then, that became full time later on.
[00:03:48] And then based on those experiences in, 1997, SmithKlineBeecham recruited me to join them in their managed care division, because, of the emergence of PBMs, basically beginning to put together formularies, and manage these things, and talk about population health management and, you know, pharmacoeconomics and health outcomes and all those sorts of things. SmithKline Beecham, in many respects, was kind of a leader in that domain from the life sciences industry and so it was for me, it was a place to go learn some new things.
[00:04:23] I had never worked in a big global company. I'd never worked in a for profit company, hadn't worked in life sciences, hadn't worked on somebody that was trying to make an impact in disease management, and other areas as well. And one thing led to another and I spent the next 25 years in life sciences. It was great.
[00:04:41] I enjoyed really, every company I was with and every role I had, I found the mission I'll say to be a worthy one. And I found the puzzles to be interesting. I enjoyed the business to business relationships. I enjoyed the negotiating, and the most rewarding part of it all was the work that you guys do, and you know this well, but it was the patient services work.
[00:05:06] It was the whole, the part, and the whole company, not just in the market access groups, but in the whole company, where you were most closely connected to patients and their outcomes, their relationship to the medicines that your company was providing and then ultimately their outcomes, and you could see in a very real way, day today, the difference that you were making for patients and they were just incredibly grateful. I know all the people that I've worked with in the years in patient services know exactly what I'm saying and feel the same way.
[00:05:39] It's filled with aremarkable group of people who are super committed to the work they're doing ,and feel the same way about the value of it and the importance and theircommitment to it. And, as one of my old bosses used to say: it's not by chance.And there are a lot of people working in that area.
[00:05:54] And I know it's truefor you guys too, that it's not by chance. It's because you care.
[00:05:59] Syam Palakurthy: Yeah, yeah, absolutely. And,you know, we, we talk about this all the time, it's like for all the hardstuff, there's lots of hard stuff, if you can just get a few more patientsthrough what can be a horrible, horrible process, that's so meaningful.
[00:06:13] Scott Howell: Yeah, absolutely. So it was, itwas tremendously rewarding. I had the opportunity to retire from that phase ofmy career, the big company, life sciences kind of stuff, about two and a halfyears ago. My wife and I returned to our family home in Columbus, Ohio.
[00:06:31] And now I have thegood fortune of, being a freelance agent and working on things and with peoplethat interest me. And so I'm doing more teaching. As you know, I've got apodcast myself that I co-host with Mark Hansoncalled Prescription for Better Access.
[00:06:48] I'm doing some volunteer work at a gene therapy research institute, helping them with their research investments. I'm on a National Academy of Medicine committee. I've got some advisory relationships with the health tech startup space. My hope is that, this space that you're obviously part of can be a new important lever in helping solve some of the challenges that we face and the patients face. And so I'm learning about that through a relationship with a venture capital company and some of their portfolio companies and also private equity firm. And then also I have, uh, with a partner of co-founded actually what we hope will be a new kind of pharmaceutical company that our aim is to do all of this work, including, all the way back into the research and drug development, , smarter, better, faster, cheaper so that we can provide the medicines more cheaply and continue to sustain innovation for the next 20 or 30 years.
[00:07:51] Syam Palakurthy: I love that. And by the way,Scott, I feel like it's hard to describe what you just called retirement asretirement feels like there's not a lot of retiring that's happening, but Ilove that you're so active and continuing to explore things that are interestingfor you. I want to actually dig into one of those topics on the cost side.
[00:08:11] And obviously it's always a big topic is what is the cost of a drug for patients for the system, et cetera, which is fascinating and an interesting conversation in its own right. But we'd love to hear you talk about the cost to just bring those therapies to market. And, you know, I saw a stat about it costing somewhere around two and a half billion dollars to get through the process, the failures, et cetera,
[00:08:35] Help us understandwhat is driving that cost? Because I have to think that has huge downstreamimplications for what we all pay as patients, consumers of the system.
[00:08:45] Scott Howell: Sure. Yes. So the industry business model. Is one where the revenues from the medicines on the market today fund the research and drug development for the medicines of the future.
[00:08:58] And the biggest challenge I'll say, including the biggest driver of the cost is the failures along the way, the, the oft-sited statistic is that only 1 in 10 medicines that enter phase one ever , see an approval and it takes dozens or hundreds to go from scratch, the front end, to the first phase one.
[00:09:23] And so the expenses associated with all those medicines that never make it add up and they have to be covered in any case. And when you allocate that across the portfolio, then that means in an all in kind of basis for every one that makes it, the estimates from the academics and others are that you've had two billion dollars plus, spent to get to that place and certainly that does contribute to in a very substantial way the pricings of the medicines. Having done pricing at a number of companies It's not so much on a direct one-to-one basis "hey this medicine costs so much to develop, and therefore we got to charge so much"but rather "the enterprise with its portfolio of medicines knows that overtime it has to really pay attention to the shareholders, an investment return that's in alignment with expectations for the industry and the amount of risk it's taking.
[00:10:19] And so you absolutely, it's true that you have some medicines where you make relatively more money and others where you make less, but in the aggregate, you kind of have to hit that mark in order to earn the right to continue to, to do the work. And so that expense, that total expense, whether you look , on a per average approved product, or some other way, has to be covered and contributes to the high cost of therapies.
[00:10:45] Now, more recently in recent years, there are a couple of other big drivers as well. One is that when I started in the industry, the, the big important medicines were so called primary care medicines. These were generally pills, smaller molecules, for large conditions affecting big populations of patients.
[00:11:05] So hypertension, diabetes, cholesterol, asthma, depression, peptic ulcer disease, osteoarthritis, and soon. And in that business model, you had a, , relatively speaking, a very large number of patients and a low per patient price. And over time, those medicines are all now generic And they're available at very low cost, a tremendous value to patients and to society, but it's next to impossible to go back and relaunch a new medicine in those categories and try to compete with those generic medicines.You wind up in non-preferred positions on formularies and 4th or 5th or 7th or8th line therapy and so you can't just charge a price that is going to make that make sense. And so increasingly what's happened and it's been permitted by the science as well as it's gotten more personalized I'll say. The company research has turned more and more to smaller and smaller population conditions.
[00:12:06] The so-called specialtyconditions that are usually managed by specialty physicians and oftentimessubspecialists. And so that could be conditions like multiple sclerosis orrheumatoid arthritis or various types of cancer. And now, as you know, it's morecell and gene therapy with really small populations. And so, so thesepopulations may have a few hundred thousand patients or a few tens of thousandsof patients who are in the gene therapy categories, maybe just a few hundredsor even dozens of patients. And to make a business model work where you'retargeting, you know, 50, 000 patients, let's say, rather than, 30 million, youjust have to charge, a very different price.
[00:12:49] So now we're in a very small number of patients, business model, but very high per patient prices. And obviously, that draws more attention from the payers and the PBMs and, and more intensity of management and has resulted in the kind of access environment that we have today.
[00:13:10] Syam Palakurthy: Absolutely, where it's so hard sometimes to get over that hump.
[00:13:14] You know, you're really getting at a few different issues. One, at least end results, the cost of the drugs that do come out, sometimes even for what I'll call downright miraculous drugs. And then of course, some of these other conditions where there's maybe some broken incentives or some misaligned incentives to actually be helping or to be focusing on those other kinds of states that might affect a lot of people, but where there's very, very inexpensive drugs to compete against.
[00:13:42] You have a hypothesis, at least, for how to at least tackle some of these, these challenges. Can you walk us through that?
[00:13:50] Scott Howell: Yeah, well, it was interesting, as I reflected, this dates back to the period of time in my career when I was transitioning out of Genentech and my wife and I had aging ailing parents back in Ohio, and we had decided to try to, to move back to Columbus and, to be more available.
[00:14:09] And I took a job atCardinal Health and their specialty divisions, which included their manufacturer services. And I was reflecting on my experience at, um, Genentech, where I had most recently been running the patient services programs there, which, at the time were, mammoth industry leading , programs. And in retrospect, and even though, as I just, as I said earlier, I value the work so much in many respects as I reflected on it, so much of it felt potentially unnecessary. So from my perspective as a physician, I know like for patients with multiple sclerosis, those patients are not only seeing Neurologists, they're typically seeing, you know, multiple sclerosis subspecialists and , no patient is taking an MS medicine that doesn't need it and no doctor is prescribing one for a patient that doesn't need it. And, in my mind, the likely value of a prior authorization from a payer, and again, I say this, having worked at two payers myself, was pretty limited and yet I knew all the friction that it creates and the fact that sometimes, patients and doctors don't navigate their way through and patients fall all too often really, end up not on the therapy, that was prescribed.
[00:15:31] And so it just felt like a lot of this friction and expense was um, perhaps unnecessary. And I knew that the cost of all that stuff, the contact centers and the field reimbursement managers and the copay cards and the free goods and so on, just got priced into the overall business model. So we were talking earlier, just like the research, that's a cost of business that has to be covered.
[00:15:56] As I continue to reflect on this, and this was oftentimes as I was preparing for some of my classes at Berkeley, trying to explain this to other people, eventually it dawned on me more and more that really, what one side of the room wanted was pricing moderation for manufacturers and what the other side wanted, manufacturers, was better access for patients and that in a logical rational world a trade ought to be possible. And instead we had this system that delivered just the opposite, we have a drug pricing and access system in the US that actually contributes to higher prices. Again, the manufacturers know all this friction and loss and patience is coming, and sot hey just price that into their prices. And then lots of scrutiny and intense utilization management and friction, and that's very expensive. One of my teams, we did some research on that, and it's a mind boggling number, the cost of all that navigation.
[00:16:59] And then thirdly, then so many patients actually not getting on the medicines that they need or not staying on the medicines when it's time to renew. So we have a system that actually encourages higher prices, lots of friction and waste and low access for patients.
[00:17:15] And what we all really want is just the opposite. We want fair prices and then when we get them we want good access for patients. And so I started writing about and promoting that as a potential solution a voluntary trade of, we called it fair prices for fair access at the time. It was a major focus of work for me for some time, including for the first year after I left Novartis, I had the good fortune to work with a transparent startup PBM, where the founders believed in this kind of approach as well.
[00:17:49] And we pitched it for a year, both to industry and to plans and plan sponsors. Unfortunately what we learned at least at the, at the time, was that the system players were too locked in. They all hate the current system, and they understand the challenges associated with it.
[00:18:07] But it's the system they know that they'veaccommodated to and they worry about the risks of taking a step in a differentdirection and whether they'll be penalized somehow or disadvantaged somehowif they do so. And so it's kind of it's locked in unfortunately at this point
[00:18:26] Syam Palakurthy: Yeah, change is always sohard.
[00:18:28] Scott Howell: Yeah,
[00:18:28] Syam Palakurthy: it's always so hard. And evenif it changed for the better, it's still not an easy sell. , But I do want totalk about, there's a fundamental change or a fundamentally different approachthat you're taking to a different aspect of the system.
[00:18:40] Scott Howell: Yeah
[00:18:41] Syam Palakurthy: Um when it comes to drugdevelopment, can you tell us a little bit about that?
[00:18:46] Scott Howell: Yeah, so this actually alsostarted out as an academic and research project. A number of years ago while Iwas doing this research and writing and speaking about these things and theirunintended consequences for doctors and patients, a colleague of mine from thedrug development world who has spent his career in Europe, was also beginningto worry about them.
[00:19:10] He was seeing declining reimbursement in European markets. And like me, he was starting to worry about the business model that has sustained innovation and its continued health and viability, for the next twenty or thirty years. And so the problem question, kind of writ large is in a world and at a time of declining global reimbursement, how does this high cost, risky, lengthy, enterprise set of endeavors, adapt itself for the future so that innovation can be sustained.
[00:19:44] So, he decided, five years ago, to go back and get a PhD and explore FinTech, whether or not the world of financial technology and some of the approaches there and the technology would have applications, perhaps in helping life sciences companies adapt to this. He recruited me as a , collaborator in his PhD program, kind of a thought partner, research partner, advisor, for it. And so we began studying that space, and since then, we've interviewed, I'm sure, hundreds of folks that are involved in drug research and development and commercialization subsequently, both inside companies, but also , all the way back to academic scientists, founding entrepreneurs, venture capitalists, and a whole host of other players as well.
[00:20:34] Ultimately the journey led to about two years ago our founding of a Swiss nonprofit organization and entry into an incubator program in Switzerland to learn about the use of fintech platforms to recruit global communities of scientists working on problem categories in common and helping to source from them scientific research and potential assets for further investment and development. And then screen and select the best from that sourcing and then matching that with funds as well.
[00:21:15] And so we learned quite a bit about, that process and we've adapted it, as life sciences executives. We've now built upon that and adapted that and integrated it with our earlier research into a more comprehensive approach that we hope will permit us to create the world's first global, fully decentralized pharmaceutical company. We're hoping to prove that an approach like this can be better at sourcing and screening and selecting assets, but then also better, faster and cheaper and more successful in doing the drug development and then the subsequent commercialization.
[00:21:55] The goal was to be able to reduce that cost of failure and all the other costs enough that we can bend the cost curve in the medicines, make them more value based in terms of their pricing, and thereby, more available for patients around the globe that need them.
[00:22:12] This is a moresustainable manner for the next 20 30 40 years. That system that we had that I described earlier, it worked wellfor a long time and we've got all these great generic medicines now because ofit. But it's straining to keep up with where we are now.
[00:22:28] Syam Palakurthy: Yeah I love the boldness of a global decentralized pharmaceutical enterprise. I think it's a really cool idea. We'd love for you to talk just a little more: what do you think about that enables solving for the cost of failure, as you put it, or just the challenges of which drugs you might be, which conditions you might be solving for.
[00:22:52] Scott Howell: Yeah, so I think there are a couple of areas that our approach we think has promise. One is in the sourcing and selection of the research and assets for drug development.
[00:23:05] This approach will allow us to create a global community of scientists. It will be sponsored by very top experts who will then recruit their colleagues to join them in this research season, we call them. And within that season, we'll issue a call for applications for scientists who think they have good science and could be ready to turn it into an asset for drug development and a company and they and want some help doing this. There are lots of really good potentially entrepreneurial scientists at these academic centers working on great stuff who don't successfully navigate that transition to company development building, and it's because it's not what they're good at. It's not what they've been trained todo. It's not what they focused on. It's not what they enjoy the most themselves or whatever, but they, they don't know how to get connected with venture capitalists. They don't know how to do pitch decks and start a company, incorporate even, that kind of stuff. So anyway, we're creating a global community. The scientists will recruit their colleagues whom they know might fit that category and want some help to come and apply. And then the community will end up reviewing all the applications, screening them, and then ultimately rank ordering each scientist as an individual.
[00:24:27] And so at the end, if you have a few hundred applications we'll know which 20 percent made the top cut and ultimately which were the very top 10 in order of the judgment of the entire community of scientists. Then what we'll do is we're creating a venture foundry that will support a subset of those, that top 10, some pre seed money and the help they need to recruit a CEO and advice from our personnel and our advisory board and help from our network and connections of CROs and CDMOs and the like.
[00:25:04] And so really we're trying to make it as plug-and-play as possible for the scientists, make it easy for them to make that transition and we're hoping between the wisdom of the crowds, the better opportunity for global sourcing, then sort of the happenstance, you know, process we have today, and then the support and infrastructure we put around them that we'll get both more shots on goal, but we'll also get better quality shots on goal with a better idea towards which are the ones that have the best chance of making it.
[00:25:35] And in that way reduce the cost of some of those failures. That's the value or the potential value we see in decentralizing the front end research. And then in the middle and later stages, you have drug development and you have manufacturing and commercialization and our intent is to decentralize those as well.
[00:25:56] And that part of the enterprise will run like other venture foundries, including the early ones that are have now come to the biotech world. Flagship Pioneering, I would say, is a leading example of that. And so instead of, in a big integrated company like Novartis or Pfizer or BMS, you do your own drug development.
[00:26:18] Now, oftentimes you have vendors that are helping you, but you have a large, dispersed, integrated department of people, typically thousands or tens of thousands of people, who are doing this. We don't see that as part of our decentralized system, instead we would have early startups that are doing this work themselves.
[00:26:41] If there's some advantage to having some centralized center of excellence, then we can build, a pool, a bank of, expertise that the portfolio of companies could call upon. So you don't have to lose all of the value of centralization and scale. But through this manner our hypothesis is you can avoid some of the bloat and the bureaucracy and the slowness and even reduction in quality of decision making that occurs for any of us that have worked inside large organizations. I know it myself. I look back on it. And I know that many of my meetings that I did through the years were low impact meetings and were unnecessary.
[00:27:20] And we had way too many people at them. You know, we could have done it with a fraction of the number of people there. And so many folks were either just, they were waiting to kind of hear what the boss was going to think, you know, about this. And then, you know, how do I line up with that and get on the right side of this issue?
[00:27:37] And so all of the things that are part of human nature and that come with being part of a large complex organization. And so we'll try to change that dynamic in the drug development world and hopefully, make that more effective and more efficient as well. But then, likewise, in the commercialization, we'll replace the large global business units, just as Flagship does, with instead, a portfolio of companies that can partner with our network of collaborators, the CDMOs in this case to do the manufacturing, do the distribution and do the commercialization around the world. And, we'll see. There's no guarantee that this is going to work, but, we've been researching it a longtime. We have reasons to believe. And, I think we're in the good fortune now of being close to be able to launch and test our hypotheses.
[00:28:27] Syam Palakurthy: Yeah, that's really cool. So,so kind of to summarize, I feel like there's a few themes there. One, how doyou use the wisdom of the crowd, so to speak, to get the best ideas from peoplewho might not normally be contributing or might not normally have a voice inthat. Two, how do you take advantage of the decentralized aspect to be able toget ideas and, and work from people all over the world.
[00:28:52] Three. Making itjust as frictionless as possible. Like you mentioned the centers of excellenceand then giving people the right incentives so that they're actually asindividuals and as groups working on the right thing. I think that's reallyfascinating. And, Scott, if this works, ifyou're able to, you know, make it more likely for a molecule to go from thatearly research to phase one, phase two, phase three, or to get drugs out tomarket, what do you think the impact is for patient access which is the themeof this podcast?
[00:29:25] Scott Howell: Yeah, well, I think it dependson how good you could get and we don't know the answer to this. The reality islike if you're targeting super small population conditions, like we talkedabout earlier, the prices are going to be high.
[00:29:39] It just that's tomake the business work. But the question is, like, how high, you know, and andif you if you reflect on it and you say, well, we have the prices we havegenerally in a system that works, , 10 percent of the time, 10 percent of theassets that enter phase one ultimately make it to market.
[00:30:00] What if you couldimprove that by a half, what if you could make it 15%? Or what if you coulddouble it and make it 20%? Or what if you could make it 30%? How much couldprices come down and still return, what the shareholders are expecting in thisspace of risk and time, the time for development and all those things. So we,we don't know. I mean, it's all conjecture at this point. But, you know, when Istep back and think of like, well, what's possible, what could be, it doesn'tfeel like a super stretch to say that, well, maybe we could do half better.There's reason to hope that you can make a large impact. So, you know, that'swhat we'll see. This is a journey.
[00:30:47] We've been on it for five years already, you know, and we're just now start getting started really.And, and the hope is that we'll learn and adapt and the people working with us will learn and adapt this thing will, hopefully it'll survive me long into the future. And, you know, in 20 years or 40 years from now, looking back on it, we'll know really what was possible, but it doesn't, it doesn't , feel crazy tome right now.
[00:31:14] So we're optimistic.
[00:31:16] Syam Palakurthy: Not crazy is good. Not crazy is a good thing. Yeah, no, I love that. If you can change the success rate, then you fundamentally change the economics, which can mean, you know, potentially going back to the very beginning of this conversation, lower, lower potential prices, you know, the, the payers don't need to, don't need to,
[00:31:35] Scott Howell: Exactly.
[00:31:36] Syam Palakurthy: You create the same regime,yeah, I can have all this impact that all the way hits to, you know, patientsare maybe able to get access to more drugs with less friction, less burden,less pain that's extracted along the way. I think it's a fascinating idea.
[00:31:52] Kip Theno: I agree. I mean, the solving the discovery and development is encouraging, Scott, and I want to go back to something we talked about in the pre show, and I don't want the perspective lost here either because you brought it up here that many of these discoveries don't make it to market.
[00:32:06] And that's probably a fact of life. But we also talked about, you know back before the earth cooled, when I was with Merck pharmaceutical, a budding young professional, big hyperlipidemics were coming out the groundbreaking trailblazing COX-2's were coming out, and I saw a presentation where the company said "hey, here's 50 molecules we're working on, and here's the one or two that we think we're going to get over the next one or two years. Well that leaves 48-49 that never make it. I can't imagine not all of those were viable and could have been massive groundbreaking stuff, but cost benefit prohibitive as you're talking about here. What about retrospective?That's just one company out of all of them. How many of these? How many are in the molecular graveyard that could be open sourced?
[00:32:46] Or you could figure out to go back and say,"Hey, these could be viable today."
[00:32:50] Scott Howell: Yeah, great point. Kip. The many of the academic scientists that we've Interviewed and have worked with are very keen to research that and learn about that themselves. The reality is that the companies do have large libraries of drugs and potential drugs including things that oftentimes have already been tested in humans. And they and then so they have some degree of confidence about the safety profile. But because of competing priorities or whatever else the circumstances might have been, they were put on the shelves, and have not seen the light of day.
[00:33:28] And so, many of the scientists we speak to are aware of that and their hope is that we can operate in a low cost enough environment that we can make some of those sleeping assets, if you will, potentially viable in the future.
[00:33:44] And, you know, again, who knows, right? Folks that know me, know I'm a realist. And, and so I guard myself continually against too much what if ism, but at the same time, again, you know, Syam, it's another one of those things that doesn't feel crazy to me that, you know, some of that stuff ought to be able to be repurposed and i t's all already got a head start on, you know, some of the toxicology and, and maybe we can do that for a much lower cost.
[00:34:12] Syam Palakurthy: Yeah, I love this. I love the vision. I love just the taking a really bold approach and a different approach to solve a set of challenges. That's frankly, really big and really important to be addressing. So, Scott, it's been really fascinating conversation. Thank you so much for jumping on.
[00:34:31] Scott Howell: Hey, my pleasure joining, you guys, Kip and Syam.
[00:34:34] Congratulations on all the progress and success you're having as well. This is super important stuff, as you know, and it's valuable to the doctors and practices you serve and also to the patients you serve as well. And I'm glad you're doing it and I'm glad we have people like you, you know taking these challenges on everyday. So thanks for thanks for chatting with me.
[00:34:55] Kip Theno: Well Scott and Syam. Thank you so much and Scott, we're not quite done yet, two quick things: This is profound.We want to get it out to as many people as humanly possible for what you're doing and your insights today. First thing is how do folks reach you out there Scott?
[00:35:09] Scott Howell: Ah, yes, so the company that we're forming is called SynapseSciences.
[00:35:13] And we do have a page on LinkedIn. I personally can be reached at the emailscott@synapsesciences.com. This is one of the joys of what I get to do these days is to network, interact with folks.And I'm always happy to hear from folks.
[00:35:30] So ring me up if there's something I can help with.
[00:35:34] Kip Theno: No, we will. We'll make sure and post all that in the podcast for the episode. And Scott, last question. I always do an Easter egg and I know you're busy and have to go. When we first met, you were wearing a Notre Dame fighting Irish. And as you know, I went to Culver Academies, uh, stones throw away, spent a lot of time up at Notre Dame in the Lou Holtz era.
[00:35:54] Here's my question.Are they ever going to win again?
[00:35:58] Scott Howell: Well, so, you know, every year at the beginning of the year, Kip, I declare, this is our year.
[00:36:05] And now, as you know, it's a high bar, and if you don't win the national championship at a place like Notre Dame, then, you know, it's almost like you didn't win, right?
[00:36:14] But the reality is they've got a great program there. They win lots and lots of games, every year.And most years they're in the hunt until, you know, at least late in the season. And that includes this year. And so Kip, I'm declaring this is our year.
[00:36:30] Syam Palakurthy: By the way, Scott, the way, the way Kip coaches his kids hockey team is you don't win the national championship... didn't do anything.
[00:36:37] Kip Theno: If you're not first, you're last guys, that's it.
[00:36:42] Well Scott, Syamthis was a pleasure to have you on and that's a wrap. Thank you so much forjoining The Road to Care podcast.
[00:36:48] Scott Howell: Thank you.
[00:36:50]
[00:36:50] Kip Theno: Thank you for joining the Road toCare podcast hosted by SamaCare, the leader in prior authorization technology and services, where through a script to therapy operating system, we enable connectivity with clinics, payers, and manufacturers focused on optimizing patient care. Tune in next time as together we can make things right.
[00:37:09] Enjoy the music written, produced and recorded by Jamestown.
Together, we can make healthcare right. Here are some of the outstanding
healthcare organizations and associations championing patient health mentioned in
this episode:
On this episode of The Road to Care, we’re joined by industry thought leader Dr. Scott Howell and special guest co-host, SamaCare CEO Syam Palakurthy. Scott is best known for leading innovations to improve coverage, reimbursement and affordability of medicines as well as services supporting patient access at GSK, Genentech, Jazz, and Novartis. Scott has been teaching, researching and writing about improving pricing and access of medicines for 15 years, primarily at the University of California – Berkeley, and is a thought leader on the topic of value-based pricing and access for medicines. Scott spent the first decade of his career in clinical medicine as a general internist.
Tune in to this episode to learn:
And, be sure to check out Scott’s podcast, Prescription for Better Access: (https://open.spotify.com/show/659fsjTHJGdqHdfrmqDBkw).
[00:00:00] Kip Theno: Welcome to the Road to Care podcast hosted by SamaCare, where we will talk with key opinion leaders, physicians, administrators, manufacturers, venture capitalists, and legislators to get their insights on the state of health care today and where we see it evolving. SamaCare's prior authorization platform is free to clinics, ensuring patients get on the right therapy at the right time.
[00:00:20] Together, we can simply make things right.
[00:00:25] Hey, everybody.Thanks again for joining the Road to Care podcast hosted by SamaCare. And todayour special guest is Dr. Scott Howell, MD, MBA. Scott is widely respected industry advocate and leader for patient access to medicines. He began hiscareer as a general internist and after a decade in clinical medicine, went towork on improving health services more generally.
[00:00:46] He worked in grouppractice administration, insurance plan administration, pharmaceuticaldistribution and services, and at four biotech and pharmaceutical companiesincluding: GSK, Genentech, Jazz, and Novartis. Scott is best known for leadinginnovations to improve coverage, reimbursement, and affordability of medicines,as well as services supporting patient access.
[00:01:08] Scott has beenteaching, researching, and writing on improving pricing and access of medicinesfor over 15 years, primarily at the University of California, Berkeley. Andhe's a thought leader on the topic of value based pricing and access formedicines. Scott now advises a number of companies that continue to work onthese and related challenges in health care. And we have a very special co-hosttoday none other than our CEO at SamaCare Syam Palakurthy my wingman I'm, notsure what the call sign is going to be and of course since he's my boss, thisbetter be a good good show Syam and Scott.
[00:01:41] Great to have you ontoday
[00:01:43] Scott Howell: Thanks, Kip. It's great to bewith you.
[00:01:46] Syam Palakurthy: Kip, thank you for letting mejoin. I feel like I've been on the sidelines here being like, put me in, coach.So I'm excited that you're finally letting me take my shot.
[00:01:55] Kip Theno: Well, I know that you and Scottactually have some history, Syam. So I'm going to, I'm going to turn past thetorch to you.
[00:02:00] Syam Palakurthy: Yeah, absolutely, thank you,Kip. And Scott, I'm really excited to be having this conversation, you know,we've obviously gone back, at this point, I think five years now, as we werevery early in our, our journey with SamaCare.
[00:02:13] You know, Scott, I'mreally excited to be having this, partially because, you know, in a lot ofways, I think about you as one of the godfathers of pharmaceutical patientaccess and support. Kip mentioned the Novartis experience, the Genentechexperience, and that's very close to our hearts here at SamaCare.
[00:02:31] But I'd love toactually just have you start by telling us a little bit about all of thatcareer and the pieces of your career going even beyond that. So we'd love tohear how you got to this place in your career.
[00:02:43] Scott Howell: Oh, sure. I'd be happy to, Syam.I feel very fortunate, looking back on things.
[00:02:48] I, as Kip mentioned,I started my career as a physician. I was a general internist and, worked inclinical medicine for about a decade. And even then, you know, the experienceof practicing medicine was that all too often, really, the administration andbusiness processes and, misalignment of incentives and so on got in the way of,what you wanted to do with patients. And I got really interested in that. Iwanted to learn more about it. I ended up going back to school and getting abusiness degree, as Kip mentioned and started to work in health services tolearn more about it, and also, I think, to see if I could be helpful in anyway, make a difference in it.
[00:03:31] The easiest transitions from practicing medicine was to transition, obviously, to group practice administration, which is what I did. And then from there, I got a chance to work part time at initially part time at a health plan. And then, that became full time later on.
[00:03:48] And then based on those experiences in, 1997, SmithKlineBeecham recruited me to join them in their managed care division, because, of the emergence of PBMs, basically beginning to put together formularies, and manage these things, and talk about population health management and, you know, pharmacoeconomics and health outcomes and all those sorts of things. SmithKline Beecham, in many respects, was kind of a leader in that domain from the life sciences industry and so it was for me, it was a place to go learn some new things.
[00:04:23] I had never worked in a big global company. I'd never worked in a for profit company, hadn't worked in life sciences, hadn't worked on somebody that was trying to make an impact in disease management, and other areas as well. And one thing led to another and I spent the next 25 years in life sciences. It was great.
[00:04:41] I enjoyed really, every company I was with and every role I had, I found the mission I'll say to be a worthy one. And I found the puzzles to be interesting. I enjoyed the business to business relationships. I enjoyed the negotiating, and the most rewarding part of it all was the work that you guys do, and you know this well, but it was the patient services work.
[00:05:06] It was the whole, the part, and the whole company, not just in the market access groups, but in the whole company, where you were most closely connected to patients and their outcomes, their relationship to the medicines that your company was providing and then ultimately their outcomes, and you could see in a very real way, day today, the difference that you were making for patients and they were just incredibly grateful. I know all the people that I've worked with in the years in patient services know exactly what I'm saying and feel the same way.
[00:05:39] It's filled with aremarkable group of people who are super committed to the work they're doing ,and feel the same way about the value of it and the importance and theircommitment to it. And, as one of my old bosses used to say: it's not by chance.And there are a lot of people working in that area.
[00:05:54] And I know it's truefor you guys too, that it's not by chance. It's because you care.
[00:05:59] Syam Palakurthy: Yeah, yeah, absolutely. And,you know, we, we talk about this all the time, it's like for all the hardstuff, there's lots of hard stuff, if you can just get a few more patientsthrough what can be a horrible, horrible process, that's so meaningful.
[00:06:13] Scott Howell: Yeah, absolutely. So it was, itwas tremendously rewarding. I had the opportunity to retire from that phase ofmy career, the big company, life sciences kind of stuff, about two and a halfyears ago. My wife and I returned to our family home in Columbus, Ohio.
[00:06:31] And now I have thegood fortune of, being a freelance agent and working on things and with peoplethat interest me. And so I'm doing more teaching. As you know, I've got apodcast myself that I co-host with Mark Hansoncalled Prescription for Better Access.
[00:06:48] I'm doing some volunteer work at a gene therapy research institute, helping them with their research investments. I'm on a National Academy of Medicine committee. I've got some advisory relationships with the health tech startup space. My hope is that, this space that you're obviously part of can be a new important lever in helping solve some of the challenges that we face and the patients face. And so I'm learning about that through a relationship with a venture capital company and some of their portfolio companies and also private equity firm. And then also I have, uh, with a partner of co-founded actually what we hope will be a new kind of pharmaceutical company that our aim is to do all of this work, including, all the way back into the research and drug development, , smarter, better, faster, cheaper so that we can provide the medicines more cheaply and continue to sustain innovation for the next 20 or 30 years.
[00:07:51] Syam Palakurthy: I love that. And by the way,Scott, I feel like it's hard to describe what you just called retirement asretirement feels like there's not a lot of retiring that's happening, but Ilove that you're so active and continuing to explore things that are interestingfor you. I want to actually dig into one of those topics on the cost side.
[00:08:11] And obviously it's always a big topic is what is the cost of a drug for patients for the system, et cetera, which is fascinating and an interesting conversation in its own right. But we'd love to hear you talk about the cost to just bring those therapies to market. And, you know, I saw a stat about it costing somewhere around two and a half billion dollars to get through the process, the failures, et cetera,
[00:08:35] Help us understandwhat is driving that cost? Because I have to think that has huge downstreamimplications for what we all pay as patients, consumers of the system.
[00:08:45] Scott Howell: Sure. Yes. So the industry business model. Is one where the revenues from the medicines on the market today fund the research and drug development for the medicines of the future.
[00:08:58] And the biggest challenge I'll say, including the biggest driver of the cost is the failures along the way, the, the oft-sited statistic is that only 1 in 10 medicines that enter phase one ever , see an approval and it takes dozens or hundreds to go from scratch, the front end, to the first phase one.
[00:09:23] And so the expenses associated with all those medicines that never make it add up and they have to be covered in any case. And when you allocate that across the portfolio, then that means in an all in kind of basis for every one that makes it, the estimates from the academics and others are that you've had two billion dollars plus, spent to get to that place and certainly that does contribute to in a very substantial way the pricings of the medicines. Having done pricing at a number of companies It's not so much on a direct one-to-one basis "hey this medicine costs so much to develop, and therefore we got to charge so much"but rather "the enterprise with its portfolio of medicines knows that overtime it has to really pay attention to the shareholders, an investment return that's in alignment with expectations for the industry and the amount of risk it's taking.
[00:10:19] And so you absolutely, it's true that you have some medicines where you make relatively more money and others where you make less, but in the aggregate, you kind of have to hit that mark in order to earn the right to continue to, to do the work. And so that expense, that total expense, whether you look , on a per average approved product, or some other way, has to be covered and contributes to the high cost of therapies.
[00:10:45] Now, more recently in recent years, there are a couple of other big drivers as well. One is that when I started in the industry, the, the big important medicines were so called primary care medicines. These were generally pills, smaller molecules, for large conditions affecting big populations of patients.
[00:11:05] So hypertension, diabetes, cholesterol, asthma, depression, peptic ulcer disease, osteoarthritis, and soon. And in that business model, you had a, , relatively speaking, a very large number of patients and a low per patient price. And over time, those medicines are all now generic And they're available at very low cost, a tremendous value to patients and to society, but it's next to impossible to go back and relaunch a new medicine in those categories and try to compete with those generic medicines.You wind up in non-preferred positions on formularies and 4th or 5th or 7th or8th line therapy and so you can't just charge a price that is going to make that make sense. And so increasingly what's happened and it's been permitted by the science as well as it's gotten more personalized I'll say. The company research has turned more and more to smaller and smaller population conditions.
[00:12:06] The so-called specialtyconditions that are usually managed by specialty physicians and oftentimessubspecialists. And so that could be conditions like multiple sclerosis orrheumatoid arthritis or various types of cancer. And now, as you know, it's morecell and gene therapy with really small populations. And so, so thesepopulations may have a few hundred thousand patients or a few tens of thousandsof patients who are in the gene therapy categories, maybe just a few hundredsor even dozens of patients. And to make a business model work where you'retargeting, you know, 50, 000 patients, let's say, rather than, 30 million, youjust have to charge, a very different price.
[00:12:49] So now we're in a very small number of patients, business model, but very high per patient prices. And obviously, that draws more attention from the payers and the PBMs and, and more intensity of management and has resulted in the kind of access environment that we have today.
[00:13:10] Syam Palakurthy: Absolutely, where it's so hard sometimes to get over that hump.
[00:13:14] You know, you're really getting at a few different issues. One, at least end results, the cost of the drugs that do come out, sometimes even for what I'll call downright miraculous drugs. And then of course, some of these other conditions where there's maybe some broken incentives or some misaligned incentives to actually be helping or to be focusing on those other kinds of states that might affect a lot of people, but where there's very, very inexpensive drugs to compete against.
[00:13:42] You have a hypothesis, at least, for how to at least tackle some of these, these challenges. Can you walk us through that?
[00:13:50] Scott Howell: Yeah, well, it was interesting, as I reflected, this dates back to the period of time in my career when I was transitioning out of Genentech and my wife and I had aging ailing parents back in Ohio, and we had decided to try to, to move back to Columbus and, to be more available.
[00:14:09] And I took a job atCardinal Health and their specialty divisions, which included their manufacturer services. And I was reflecting on my experience at, um, Genentech, where I had most recently been running the patient services programs there, which, at the time were, mammoth industry leading , programs. And in retrospect, and even though, as I just, as I said earlier, I value the work so much in many respects as I reflected on it, so much of it felt potentially unnecessary. So from my perspective as a physician, I know like for patients with multiple sclerosis, those patients are not only seeing Neurologists, they're typically seeing, you know, multiple sclerosis subspecialists and , no patient is taking an MS medicine that doesn't need it and no doctor is prescribing one for a patient that doesn't need it. And, in my mind, the likely value of a prior authorization from a payer, and again, I say this, having worked at two payers myself, was pretty limited and yet I knew all the friction that it creates and the fact that sometimes, patients and doctors don't navigate their way through and patients fall all too often really, end up not on the therapy, that was prescribed.
[00:15:31] And so it just felt like a lot of this friction and expense was um, perhaps unnecessary. And I knew that the cost of all that stuff, the contact centers and the field reimbursement managers and the copay cards and the free goods and so on, just got priced into the overall business model. So we were talking earlier, just like the research, that's a cost of business that has to be covered.
[00:15:56] As I continue to reflect on this, and this was oftentimes as I was preparing for some of my classes at Berkeley, trying to explain this to other people, eventually it dawned on me more and more that really, what one side of the room wanted was pricing moderation for manufacturers and what the other side wanted, manufacturers, was better access for patients and that in a logical rational world a trade ought to be possible. And instead we had this system that delivered just the opposite, we have a drug pricing and access system in the US that actually contributes to higher prices. Again, the manufacturers know all this friction and loss and patience is coming, and sot hey just price that into their prices. And then lots of scrutiny and intense utilization management and friction, and that's very expensive. One of my teams, we did some research on that, and it's a mind boggling number, the cost of all that navigation.
[00:16:59] And then thirdly, then so many patients actually not getting on the medicines that they need or not staying on the medicines when it's time to renew. So we have a system that actually encourages higher prices, lots of friction and waste and low access for patients.
[00:17:15] And what we all really want is just the opposite. We want fair prices and then when we get them we want good access for patients. And so I started writing about and promoting that as a potential solution a voluntary trade of, we called it fair prices for fair access at the time. It was a major focus of work for me for some time, including for the first year after I left Novartis, I had the good fortune to work with a transparent startup PBM, where the founders believed in this kind of approach as well.
[00:17:49] And we pitched it for a year, both to industry and to plans and plan sponsors. Unfortunately what we learned at least at the, at the time, was that the system players were too locked in. They all hate the current system, and they understand the challenges associated with it.
[00:18:07] But it's the system they know that they'veaccommodated to and they worry about the risks of taking a step in a differentdirection and whether they'll be penalized somehow or disadvantaged somehowif they do so. And so it's kind of it's locked in unfortunately at this point
[00:18:26] Syam Palakurthy: Yeah, change is always sohard.
[00:18:28] Scott Howell: Yeah,
[00:18:28] Syam Palakurthy: it's always so hard. And evenif it changed for the better, it's still not an easy sell. , But I do want totalk about, there's a fundamental change or a fundamentally different approachthat you're taking to a different aspect of the system.
[00:18:40] Scott Howell: Yeah
[00:18:41] Syam Palakurthy: Um when it comes to drugdevelopment, can you tell us a little bit about that?
[00:18:46] Scott Howell: Yeah, so this actually alsostarted out as an academic and research project. A number of years ago while Iwas doing this research and writing and speaking about these things and theirunintended consequences for doctors and patients, a colleague of mine from thedrug development world who has spent his career in Europe, was also beginningto worry about them.
[00:19:10] He was seeing declining reimbursement in European markets. And like me, he was starting to worry about the business model that has sustained innovation and its continued health and viability, for the next twenty or thirty years. And so the problem question, kind of writ large is in a world and at a time of declining global reimbursement, how does this high cost, risky, lengthy, enterprise set of endeavors, adapt itself for the future so that innovation can be sustained.
[00:19:44] So, he decided, five years ago, to go back and get a PhD and explore FinTech, whether or not the world of financial technology and some of the approaches there and the technology would have applications, perhaps in helping life sciences companies adapt to this. He recruited me as a , collaborator in his PhD program, kind of a thought partner, research partner, advisor, for it. And so we began studying that space, and since then, we've interviewed, I'm sure, hundreds of folks that are involved in drug research and development and commercialization subsequently, both inside companies, but also , all the way back to academic scientists, founding entrepreneurs, venture capitalists, and a whole host of other players as well.
[00:20:34] Ultimately the journey led to about two years ago our founding of a Swiss nonprofit organization and entry into an incubator program in Switzerland to learn about the use of fintech platforms to recruit global communities of scientists working on problem categories in common and helping to source from them scientific research and potential assets for further investment and development. And then screen and select the best from that sourcing and then matching that with funds as well.
[00:21:15] And so we learned quite a bit about, that process and we've adapted it, as life sciences executives. We've now built upon that and adapted that and integrated it with our earlier research into a more comprehensive approach that we hope will permit us to create the world's first global, fully decentralized pharmaceutical company. We're hoping to prove that an approach like this can be better at sourcing and screening and selecting assets, but then also better, faster and cheaper and more successful in doing the drug development and then the subsequent commercialization.
[00:21:55] The goal was to be able to reduce that cost of failure and all the other costs enough that we can bend the cost curve in the medicines, make them more value based in terms of their pricing, and thereby, more available for patients around the globe that need them.
[00:22:12] This is a moresustainable manner for the next 20 30 40 years. That system that we had that I described earlier, it worked wellfor a long time and we've got all these great generic medicines now because ofit. But it's straining to keep up with where we are now.
[00:22:28] Syam Palakurthy: Yeah I love the boldness of a global decentralized pharmaceutical enterprise. I think it's a really cool idea. We'd love for you to talk just a little more: what do you think about that enables solving for the cost of failure, as you put it, or just the challenges of which drugs you might be, which conditions you might be solving for.
[00:22:52] Scott Howell: Yeah, so I think there are a couple of areas that our approach we think has promise. One is in the sourcing and selection of the research and assets for drug development.
[00:23:05] This approach will allow us to create a global community of scientists. It will be sponsored by very top experts who will then recruit their colleagues to join them in this research season, we call them. And within that season, we'll issue a call for applications for scientists who think they have good science and could be ready to turn it into an asset for drug development and a company and they and want some help doing this. There are lots of really good potentially entrepreneurial scientists at these academic centers working on great stuff who don't successfully navigate that transition to company development building, and it's because it's not what they're good at. It's not what they've been trained todo. It's not what they focused on. It's not what they enjoy the most themselves or whatever, but they, they don't know how to get connected with venture capitalists. They don't know how to do pitch decks and start a company, incorporate even, that kind of stuff. So anyway, we're creating a global community. The scientists will recruit their colleagues whom they know might fit that category and want some help to come and apply. And then the community will end up reviewing all the applications, screening them, and then ultimately rank ordering each scientist as an individual.
[00:24:27] And so at the end, if you have a few hundred applications we'll know which 20 percent made the top cut and ultimately which were the very top 10 in order of the judgment of the entire community of scientists. Then what we'll do is we're creating a venture foundry that will support a subset of those, that top 10, some pre seed money and the help they need to recruit a CEO and advice from our personnel and our advisory board and help from our network and connections of CROs and CDMOs and the like.
[00:25:04] And so really we're trying to make it as plug-and-play as possible for the scientists, make it easy for them to make that transition and we're hoping between the wisdom of the crowds, the better opportunity for global sourcing, then sort of the happenstance, you know, process we have today, and then the support and infrastructure we put around them that we'll get both more shots on goal, but we'll also get better quality shots on goal with a better idea towards which are the ones that have the best chance of making it.
[00:25:35] And in that way reduce the cost of some of those failures. That's the value or the potential value we see in decentralizing the front end research. And then in the middle and later stages, you have drug development and you have manufacturing and commercialization and our intent is to decentralize those as well.
[00:25:56] And that part of the enterprise will run like other venture foundries, including the early ones that are have now come to the biotech world. Flagship Pioneering, I would say, is a leading example of that. And so instead of, in a big integrated company like Novartis or Pfizer or BMS, you do your own drug development.
[00:26:18] Now, oftentimes you have vendors that are helping you, but you have a large, dispersed, integrated department of people, typically thousands or tens of thousands of people, who are doing this. We don't see that as part of our decentralized system, instead we would have early startups that are doing this work themselves.
[00:26:41] If there's some advantage to having some centralized center of excellence, then we can build, a pool, a bank of, expertise that the portfolio of companies could call upon. So you don't have to lose all of the value of centralization and scale. But through this manner our hypothesis is you can avoid some of the bloat and the bureaucracy and the slowness and even reduction in quality of decision making that occurs for any of us that have worked inside large organizations. I know it myself. I look back on it. And I know that many of my meetings that I did through the years were low impact meetings and were unnecessary.
[00:27:20] And we had way too many people at them. You know, we could have done it with a fraction of the number of people there. And so many folks were either just, they were waiting to kind of hear what the boss was going to think, you know, about this. And then, you know, how do I line up with that and get on the right side of this issue?
[00:27:37] And so all of the things that are part of human nature and that come with being part of a large complex organization. And so we'll try to change that dynamic in the drug development world and hopefully, make that more effective and more efficient as well. But then, likewise, in the commercialization, we'll replace the large global business units, just as Flagship does, with instead, a portfolio of companies that can partner with our network of collaborators, the CDMOs in this case to do the manufacturing, do the distribution and do the commercialization around the world. And, we'll see. There's no guarantee that this is going to work, but, we've been researching it a longtime. We have reasons to believe. And, I think we're in the good fortune now of being close to be able to launch and test our hypotheses.
[00:28:27] Syam Palakurthy: Yeah, that's really cool. So,so kind of to summarize, I feel like there's a few themes there. One, how doyou use the wisdom of the crowd, so to speak, to get the best ideas from peoplewho might not normally be contributing or might not normally have a voice inthat. Two, how do you take advantage of the decentralized aspect to be able toget ideas and, and work from people all over the world.
[00:28:52] Three. Making itjust as frictionless as possible. Like you mentioned the centers of excellenceand then giving people the right incentives so that they're actually asindividuals and as groups working on the right thing. I think that's reallyfascinating. And, Scott, if this works, ifyou're able to, you know, make it more likely for a molecule to go from thatearly research to phase one, phase two, phase three, or to get drugs out tomarket, what do you think the impact is for patient access which is the themeof this podcast?
[00:29:25] Scott Howell: Yeah, well, I think it dependson how good you could get and we don't know the answer to this. The reality islike if you're targeting super small population conditions, like we talkedabout earlier, the prices are going to be high.
[00:29:39] It just that's tomake the business work. But the question is, like, how high, you know, and andif you if you reflect on it and you say, well, we have the prices we havegenerally in a system that works, , 10 percent of the time, 10 percent of theassets that enter phase one ultimately make it to market.
[00:30:00] What if you couldimprove that by a half, what if you could make it 15%? Or what if you coulddouble it and make it 20%? Or what if you could make it 30%? How much couldprices come down and still return, what the shareholders are expecting in thisspace of risk and time, the time for development and all those things. So we,we don't know. I mean, it's all conjecture at this point. But, you know, when Istep back and think of like, well, what's possible, what could be, it doesn'tfeel like a super stretch to say that, well, maybe we could do half better.There's reason to hope that you can make a large impact. So, you know, that'swhat we'll see. This is a journey.
[00:30:47] We've been on it for five years already, you know, and we're just now start getting started really.And, and the hope is that we'll learn and adapt and the people working with us will learn and adapt this thing will, hopefully it'll survive me long into the future. And, you know, in 20 years or 40 years from now, looking back on it, we'll know really what was possible, but it doesn't, it doesn't , feel crazy tome right now.
[00:31:14] So we're optimistic.
[00:31:16] Syam Palakurthy: Not crazy is good. Not crazy is a good thing. Yeah, no, I love that. If you can change the success rate, then you fundamentally change the economics, which can mean, you know, potentially going back to the very beginning of this conversation, lower, lower potential prices, you know, the, the payers don't need to, don't need to,
[00:31:35] Scott Howell: Exactly.
[00:31:36] Syam Palakurthy: You create the same regime,yeah, I can have all this impact that all the way hits to, you know, patientsare maybe able to get access to more drugs with less friction, less burden,less pain that's extracted along the way. I think it's a fascinating idea.
[00:31:52] Kip Theno: I agree. I mean, the solving the discovery and development is encouraging, Scott, and I want to go back to something we talked about in the pre show, and I don't want the perspective lost here either because you brought it up here that many of these discoveries don't make it to market.
[00:32:06] And that's probably a fact of life. But we also talked about, you know back before the earth cooled, when I was with Merck pharmaceutical, a budding young professional, big hyperlipidemics were coming out the groundbreaking trailblazing COX-2's were coming out, and I saw a presentation where the company said "hey, here's 50 molecules we're working on, and here's the one or two that we think we're going to get over the next one or two years. Well that leaves 48-49 that never make it. I can't imagine not all of those were viable and could have been massive groundbreaking stuff, but cost benefit prohibitive as you're talking about here. What about retrospective?That's just one company out of all of them. How many of these? How many are in the molecular graveyard that could be open sourced?
[00:32:46] Or you could figure out to go back and say,"Hey, these could be viable today."
[00:32:50] Scott Howell: Yeah, great point. Kip. The many of the academic scientists that we've Interviewed and have worked with are very keen to research that and learn about that themselves. The reality is that the companies do have large libraries of drugs and potential drugs including things that oftentimes have already been tested in humans. And they and then so they have some degree of confidence about the safety profile. But because of competing priorities or whatever else the circumstances might have been, they were put on the shelves, and have not seen the light of day.
[00:33:28] And so, many of the scientists we speak to are aware of that and their hope is that we can operate in a low cost enough environment that we can make some of those sleeping assets, if you will, potentially viable in the future.
[00:33:44] And, you know, again, who knows, right? Folks that know me, know I'm a realist. And, and so I guard myself continually against too much what if ism, but at the same time, again, you know, Syam, it's another one of those things that doesn't feel crazy to me that, you know, some of that stuff ought to be able to be repurposed and i t's all already got a head start on, you know, some of the toxicology and, and maybe we can do that for a much lower cost.
[00:34:12] Syam Palakurthy: Yeah, I love this. I love the vision. I love just the taking a really bold approach and a different approach to solve a set of challenges. That's frankly, really big and really important to be addressing. So, Scott, it's been really fascinating conversation. Thank you so much for jumping on.
[00:34:31] Scott Howell: Hey, my pleasure joining, you guys, Kip and Syam.
[00:34:34] Congratulations on all the progress and success you're having as well. This is super important stuff, as you know, and it's valuable to the doctors and practices you serve and also to the patients you serve as well. And I'm glad you're doing it and I'm glad we have people like you, you know taking these challenges on everyday. So thanks for thanks for chatting with me.
[00:34:55] Kip Theno: Well Scott and Syam. Thank you so much and Scott, we're not quite done yet, two quick things: This is profound.We want to get it out to as many people as humanly possible for what you're doing and your insights today. First thing is how do folks reach you out there Scott?
[00:35:09] Scott Howell: Ah, yes, so the company that we're forming is called SynapseSciences.
[00:35:13] And we do have a page on LinkedIn. I personally can be reached at the emailscott@synapsesciences.com. This is one of the joys of what I get to do these days is to network, interact with folks.And I'm always happy to hear from folks.
[00:35:30] So ring me up if there's something I can help with.
[00:35:34] Kip Theno: No, we will. We'll make sure and post all that in the podcast for the episode. And Scott, last question. I always do an Easter egg and I know you're busy and have to go. When we first met, you were wearing a Notre Dame fighting Irish. And as you know, I went to Culver Academies, uh, stones throw away, spent a lot of time up at Notre Dame in the Lou Holtz era.
[00:35:54] Here's my question.Are they ever going to win again?
[00:35:58] Scott Howell: Well, so, you know, every year at the beginning of the year, Kip, I declare, this is our year.
[00:36:05] And now, as you know, it's a high bar, and if you don't win the national championship at a place like Notre Dame, then, you know, it's almost like you didn't win, right?
[00:36:14] But the reality is they've got a great program there. They win lots and lots of games, every year.And most years they're in the hunt until, you know, at least late in the season. And that includes this year. And so Kip, I'm declaring this is our year.
[00:36:30] Syam Palakurthy: By the way, Scott, the way, the way Kip coaches his kids hockey team is you don't win the national championship... didn't do anything.
[00:36:37] Kip Theno: If you're not first, you're last guys, that's it.
[00:36:42] Well Scott, Syamthis was a pleasure to have you on and that's a wrap. Thank you so much forjoining The Road to Care podcast.
[00:36:48] Scott Howell: Thank you.
[00:36:50]
[00:36:50] Kip Theno: Thank you for joining the Road toCare podcast hosted by SamaCare, the leader in prior authorization technology and services, where through a script to therapy operating system, we enable connectivity with clinics, payers, and manufacturers focused on optimizing patient care. Tune in next time as together we can make things right.
[00:37:09] Enjoy the music written, produced and recorded by Jamestown.
Together, we can make healthcare right. Here are some of the outstanding
healthcare organizations and associations championing patient health mentioned in
this episode:
On this episode of The Road to Care, we’re joined by industry thought leader Dr. Scott Howell and special guest co-host, SamaCare CEO Syam Palakurthy. Scott is best known for leading innovations to improve coverage, reimbursement and affordability of medicines as well as services supporting patient access at GSK, Genentech, Jazz, and Novartis. Scott has been teaching, researching and writing about improving pricing and access of medicines for 15 years, primarily at the University of California – Berkeley, and is a thought leader on the topic of value-based pricing and access for medicines. Scott spent the first decade of his career in clinical medicine as a general internist.
Tune in to this episode to learn:
And, be sure to check out Scott’s podcast, Prescription for Better Access: (https://open.spotify.com/show/659fsjTHJGdqHdfrmqDBkw).
[00:00:00] Kip Theno: Welcome to the Road to Care podcast hosted by SamaCare, where we will talk with key opinion leaders, physicians, administrators, manufacturers, venture capitalists, and legislators to get their insights on the state of health care today and where we see it evolving. SamaCare's prior authorization platform is free to clinics, ensuring patients get on the right therapy at the right time.
[00:00:20] Together, we can simply make things right.
[00:00:25] Hey, everybody.Thanks again for joining the Road to Care podcast hosted by SamaCare. And todayour special guest is Dr. Scott Howell, MD, MBA. Scott is widely respected industry advocate and leader for patient access to medicines. He began hiscareer as a general internist and after a decade in clinical medicine, went towork on improving health services more generally.
[00:00:46] He worked in grouppractice administration, insurance plan administration, pharmaceuticaldistribution and services, and at four biotech and pharmaceutical companiesincluding: GSK, Genentech, Jazz, and Novartis. Scott is best known for leadinginnovations to improve coverage, reimbursement, and affordability of medicines,as well as services supporting patient access.
[00:01:08] Scott has beenteaching, researching, and writing on improving pricing and access of medicinesfor over 15 years, primarily at the University of California, Berkeley. Andhe's a thought leader on the topic of value based pricing and access formedicines. Scott now advises a number of companies that continue to work onthese and related challenges in health care. And we have a very special co-hosttoday none other than our CEO at SamaCare Syam Palakurthy my wingman I'm, notsure what the call sign is going to be and of course since he's my boss, thisbetter be a good good show Syam and Scott.
[00:01:41] Great to have you ontoday
[00:01:43] Scott Howell: Thanks, Kip. It's great to bewith you.
[00:01:46] Syam Palakurthy: Kip, thank you for letting mejoin. I feel like I've been on the sidelines here being like, put me in, coach.So I'm excited that you're finally letting me take my shot.
[00:01:55] Kip Theno: Well, I know that you and Scottactually have some history, Syam. So I'm going to, I'm going to turn past thetorch to you.
[00:02:00] Syam Palakurthy: Yeah, absolutely, thank you,Kip. And Scott, I'm really excited to be having this conversation, you know,we've obviously gone back, at this point, I think five years now, as we werevery early in our, our journey with SamaCare.
[00:02:13] You know, Scott, I'mreally excited to be having this, partially because, you know, in a lot ofways, I think about you as one of the godfathers of pharmaceutical patientaccess and support. Kip mentioned the Novartis experience, the Genentechexperience, and that's very close to our hearts here at SamaCare.
[00:02:31] But I'd love toactually just have you start by telling us a little bit about all of thatcareer and the pieces of your career going even beyond that. So we'd love tohear how you got to this place in your career.
[00:02:43] Scott Howell: Oh, sure. I'd be happy to, Syam.I feel very fortunate, looking back on things.
[00:02:48] I, as Kip mentioned,I started my career as a physician. I was a general internist and, worked inclinical medicine for about a decade. And even then, you know, the experienceof practicing medicine was that all too often, really, the administration andbusiness processes and, misalignment of incentives and so on got in the way of,what you wanted to do with patients. And I got really interested in that. Iwanted to learn more about it. I ended up going back to school and getting abusiness degree, as Kip mentioned and started to work in health services tolearn more about it, and also, I think, to see if I could be helpful in anyway, make a difference in it.
[00:03:31] The easiest transitions from practicing medicine was to transition, obviously, to group practice administration, which is what I did. And then from there, I got a chance to work part time at initially part time at a health plan. And then, that became full time later on.
[00:03:48] And then based on those experiences in, 1997, SmithKlineBeecham recruited me to join them in their managed care division, because, of the emergence of PBMs, basically beginning to put together formularies, and manage these things, and talk about population health management and, you know, pharmacoeconomics and health outcomes and all those sorts of things. SmithKline Beecham, in many respects, was kind of a leader in that domain from the life sciences industry and so it was for me, it was a place to go learn some new things.
[00:04:23] I had never worked in a big global company. I'd never worked in a for profit company, hadn't worked in life sciences, hadn't worked on somebody that was trying to make an impact in disease management, and other areas as well. And one thing led to another and I spent the next 25 years in life sciences. It was great.
[00:04:41] I enjoyed really, every company I was with and every role I had, I found the mission I'll say to be a worthy one. And I found the puzzles to be interesting. I enjoyed the business to business relationships. I enjoyed the negotiating, and the most rewarding part of it all was the work that you guys do, and you know this well, but it was the patient services work.
[00:05:06] It was the whole, the part, and the whole company, not just in the market access groups, but in the whole company, where you were most closely connected to patients and their outcomes, their relationship to the medicines that your company was providing and then ultimately their outcomes, and you could see in a very real way, day today, the difference that you were making for patients and they were just incredibly grateful. I know all the people that I've worked with in the years in patient services know exactly what I'm saying and feel the same way.
[00:05:39] It's filled with aremarkable group of people who are super committed to the work they're doing ,and feel the same way about the value of it and the importance and theircommitment to it. And, as one of my old bosses used to say: it's not by chance.And there are a lot of people working in that area.
[00:05:54] And I know it's truefor you guys too, that it's not by chance. It's because you care.
[00:05:59] Syam Palakurthy: Yeah, yeah, absolutely. And,you know, we, we talk about this all the time, it's like for all the hardstuff, there's lots of hard stuff, if you can just get a few more patientsthrough what can be a horrible, horrible process, that's so meaningful.
[00:06:13] Scott Howell: Yeah, absolutely. So it was, itwas tremendously rewarding. I had the opportunity to retire from that phase ofmy career, the big company, life sciences kind of stuff, about two and a halfyears ago. My wife and I returned to our family home in Columbus, Ohio.
[00:06:31] And now I have thegood fortune of, being a freelance agent and working on things and with peoplethat interest me. And so I'm doing more teaching. As you know, I've got apodcast myself that I co-host with Mark Hansoncalled Prescription for Better Access.
[00:06:48] I'm doing some volunteer work at a gene therapy research institute, helping them with their research investments. I'm on a National Academy of Medicine committee. I've got some advisory relationships with the health tech startup space. My hope is that, this space that you're obviously part of can be a new important lever in helping solve some of the challenges that we face and the patients face. And so I'm learning about that through a relationship with a venture capital company and some of their portfolio companies and also private equity firm. And then also I have, uh, with a partner of co-founded actually what we hope will be a new kind of pharmaceutical company that our aim is to do all of this work, including, all the way back into the research and drug development, , smarter, better, faster, cheaper so that we can provide the medicines more cheaply and continue to sustain innovation for the next 20 or 30 years.
[00:07:51] Syam Palakurthy: I love that. And by the way,Scott, I feel like it's hard to describe what you just called retirement asretirement feels like there's not a lot of retiring that's happening, but Ilove that you're so active and continuing to explore things that are interestingfor you. I want to actually dig into one of those topics on the cost side.
[00:08:11] And obviously it's always a big topic is what is the cost of a drug for patients for the system, et cetera, which is fascinating and an interesting conversation in its own right. But we'd love to hear you talk about the cost to just bring those therapies to market. And, you know, I saw a stat about it costing somewhere around two and a half billion dollars to get through the process, the failures, et cetera,
[00:08:35] Help us understandwhat is driving that cost? Because I have to think that has huge downstreamimplications for what we all pay as patients, consumers of the system.
[00:08:45] Scott Howell: Sure. Yes. So the industry business model. Is one where the revenues from the medicines on the market today fund the research and drug development for the medicines of the future.
[00:08:58] And the biggest challenge I'll say, including the biggest driver of the cost is the failures along the way, the, the oft-sited statistic is that only 1 in 10 medicines that enter phase one ever , see an approval and it takes dozens or hundreds to go from scratch, the front end, to the first phase one.
[00:09:23] And so the expenses associated with all those medicines that never make it add up and they have to be covered in any case. And when you allocate that across the portfolio, then that means in an all in kind of basis for every one that makes it, the estimates from the academics and others are that you've had two billion dollars plus, spent to get to that place and certainly that does contribute to in a very substantial way the pricings of the medicines. Having done pricing at a number of companies It's not so much on a direct one-to-one basis "hey this medicine costs so much to develop, and therefore we got to charge so much"but rather "the enterprise with its portfolio of medicines knows that overtime it has to really pay attention to the shareholders, an investment return that's in alignment with expectations for the industry and the amount of risk it's taking.
[00:10:19] And so you absolutely, it's true that you have some medicines where you make relatively more money and others where you make less, but in the aggregate, you kind of have to hit that mark in order to earn the right to continue to, to do the work. And so that expense, that total expense, whether you look , on a per average approved product, or some other way, has to be covered and contributes to the high cost of therapies.
[00:10:45] Now, more recently in recent years, there are a couple of other big drivers as well. One is that when I started in the industry, the, the big important medicines were so called primary care medicines. These were generally pills, smaller molecules, for large conditions affecting big populations of patients.
[00:11:05] So hypertension, diabetes, cholesterol, asthma, depression, peptic ulcer disease, osteoarthritis, and soon. And in that business model, you had a, , relatively speaking, a very large number of patients and a low per patient price. And over time, those medicines are all now generic And they're available at very low cost, a tremendous value to patients and to society, but it's next to impossible to go back and relaunch a new medicine in those categories and try to compete with those generic medicines.You wind up in non-preferred positions on formularies and 4th or 5th or 7th or8th line therapy and so you can't just charge a price that is going to make that make sense. And so increasingly what's happened and it's been permitted by the science as well as it's gotten more personalized I'll say. The company research has turned more and more to smaller and smaller population conditions.
[00:12:06] The so-called specialtyconditions that are usually managed by specialty physicians and oftentimessubspecialists. And so that could be conditions like multiple sclerosis orrheumatoid arthritis or various types of cancer. And now, as you know, it's morecell and gene therapy with really small populations. And so, so thesepopulations may have a few hundred thousand patients or a few tens of thousandsof patients who are in the gene therapy categories, maybe just a few hundredsor even dozens of patients. And to make a business model work where you'retargeting, you know, 50, 000 patients, let's say, rather than, 30 million, youjust have to charge, a very different price.
[00:12:49] So now we're in a very small number of patients, business model, but very high per patient prices. And obviously, that draws more attention from the payers and the PBMs and, and more intensity of management and has resulted in the kind of access environment that we have today.
[00:13:10] Syam Palakurthy: Absolutely, where it's so hard sometimes to get over that hump.
[00:13:14] You know, you're really getting at a few different issues. One, at least end results, the cost of the drugs that do come out, sometimes even for what I'll call downright miraculous drugs. And then of course, some of these other conditions where there's maybe some broken incentives or some misaligned incentives to actually be helping or to be focusing on those other kinds of states that might affect a lot of people, but where there's very, very inexpensive drugs to compete against.
[00:13:42] You have a hypothesis, at least, for how to at least tackle some of these, these challenges. Can you walk us through that?
[00:13:50] Scott Howell: Yeah, well, it was interesting, as I reflected, this dates back to the period of time in my career when I was transitioning out of Genentech and my wife and I had aging ailing parents back in Ohio, and we had decided to try to, to move back to Columbus and, to be more available.
[00:14:09] And I took a job atCardinal Health and their specialty divisions, which included their manufacturer services. And I was reflecting on my experience at, um, Genentech, where I had most recently been running the patient services programs there, which, at the time were, mammoth industry leading , programs. And in retrospect, and even though, as I just, as I said earlier, I value the work so much in many respects as I reflected on it, so much of it felt potentially unnecessary. So from my perspective as a physician, I know like for patients with multiple sclerosis, those patients are not only seeing Neurologists, they're typically seeing, you know, multiple sclerosis subspecialists and , no patient is taking an MS medicine that doesn't need it and no doctor is prescribing one for a patient that doesn't need it. And, in my mind, the likely value of a prior authorization from a payer, and again, I say this, having worked at two payers myself, was pretty limited and yet I knew all the friction that it creates and the fact that sometimes, patients and doctors don't navigate their way through and patients fall all too often really, end up not on the therapy, that was prescribed.
[00:15:31] And so it just felt like a lot of this friction and expense was um, perhaps unnecessary. And I knew that the cost of all that stuff, the contact centers and the field reimbursement managers and the copay cards and the free goods and so on, just got priced into the overall business model. So we were talking earlier, just like the research, that's a cost of business that has to be covered.
[00:15:56] As I continue to reflect on this, and this was oftentimes as I was preparing for some of my classes at Berkeley, trying to explain this to other people, eventually it dawned on me more and more that really, what one side of the room wanted was pricing moderation for manufacturers and what the other side wanted, manufacturers, was better access for patients and that in a logical rational world a trade ought to be possible. And instead we had this system that delivered just the opposite, we have a drug pricing and access system in the US that actually contributes to higher prices. Again, the manufacturers know all this friction and loss and patience is coming, and sot hey just price that into their prices. And then lots of scrutiny and intense utilization management and friction, and that's very expensive. One of my teams, we did some research on that, and it's a mind boggling number, the cost of all that navigation.
[00:16:59] And then thirdly, then so many patients actually not getting on the medicines that they need or not staying on the medicines when it's time to renew. So we have a system that actually encourages higher prices, lots of friction and waste and low access for patients.
[00:17:15] And what we all really want is just the opposite. We want fair prices and then when we get them we want good access for patients. And so I started writing about and promoting that as a potential solution a voluntary trade of, we called it fair prices for fair access at the time. It was a major focus of work for me for some time, including for the first year after I left Novartis, I had the good fortune to work with a transparent startup PBM, where the founders believed in this kind of approach as well.
[00:17:49] And we pitched it for a year, both to industry and to plans and plan sponsors. Unfortunately what we learned at least at the, at the time, was that the system players were too locked in. They all hate the current system, and they understand the challenges associated with it.
[00:18:07] But it's the system they know that they'veaccommodated to and they worry about the risks of taking a step in a differentdirection and whether they'll be penalized somehow or disadvantaged somehowif they do so. And so it's kind of it's locked in unfortunately at this point
[00:18:26] Syam Palakurthy: Yeah, change is always sohard.
[00:18:28] Scott Howell: Yeah,
[00:18:28] Syam Palakurthy: it's always so hard. And evenif it changed for the better, it's still not an easy sell. , But I do want totalk about, there's a fundamental change or a fundamentally different approachthat you're taking to a different aspect of the system.
[00:18:40] Scott Howell: Yeah
[00:18:41] Syam Palakurthy: Um when it comes to drugdevelopment, can you tell us a little bit about that?
[00:18:46] Scott Howell: Yeah, so this actually alsostarted out as an academic and research project. A number of years ago while Iwas doing this research and writing and speaking about these things and theirunintended consequences for doctors and patients, a colleague of mine from thedrug development world who has spent his career in Europe, was also beginningto worry about them.
[00:19:10] He was seeing declining reimbursement in European markets. And like me, he was starting to worry about the business model that has sustained innovation and its continued health and viability, for the next twenty or thirty years. And so the problem question, kind of writ large is in a world and at a time of declining global reimbursement, how does this high cost, risky, lengthy, enterprise set of endeavors, adapt itself for the future so that innovation can be sustained.
[00:19:44] So, he decided, five years ago, to go back and get a PhD and explore FinTech, whether or not the world of financial technology and some of the approaches there and the technology would have applications, perhaps in helping life sciences companies adapt to this. He recruited me as a , collaborator in his PhD program, kind of a thought partner, research partner, advisor, for it. And so we began studying that space, and since then, we've interviewed, I'm sure, hundreds of folks that are involved in drug research and development and commercialization subsequently, both inside companies, but also , all the way back to academic scientists, founding entrepreneurs, venture capitalists, and a whole host of other players as well.
[00:20:34] Ultimately the journey led to about two years ago our founding of a Swiss nonprofit organization and entry into an incubator program in Switzerland to learn about the use of fintech platforms to recruit global communities of scientists working on problem categories in common and helping to source from them scientific research and potential assets for further investment and development. And then screen and select the best from that sourcing and then matching that with funds as well.
[00:21:15] And so we learned quite a bit about, that process and we've adapted it, as life sciences executives. We've now built upon that and adapted that and integrated it with our earlier research into a more comprehensive approach that we hope will permit us to create the world's first global, fully decentralized pharmaceutical company. We're hoping to prove that an approach like this can be better at sourcing and screening and selecting assets, but then also better, faster and cheaper and more successful in doing the drug development and then the subsequent commercialization.
[00:21:55] The goal was to be able to reduce that cost of failure and all the other costs enough that we can bend the cost curve in the medicines, make them more value based in terms of their pricing, and thereby, more available for patients around the globe that need them.
[00:22:12] This is a moresustainable manner for the next 20 30 40 years. That system that we had that I described earlier, it worked wellfor a long time and we've got all these great generic medicines now because ofit. But it's straining to keep up with where we are now.
[00:22:28] Syam Palakurthy: Yeah I love the boldness of a global decentralized pharmaceutical enterprise. I think it's a really cool idea. We'd love for you to talk just a little more: what do you think about that enables solving for the cost of failure, as you put it, or just the challenges of which drugs you might be, which conditions you might be solving for.
[00:22:52] Scott Howell: Yeah, so I think there are a couple of areas that our approach we think has promise. One is in the sourcing and selection of the research and assets for drug development.
[00:23:05] This approach will allow us to create a global community of scientists. It will be sponsored by very top experts who will then recruit their colleagues to join them in this research season, we call them. And within that season, we'll issue a call for applications for scientists who think they have good science and could be ready to turn it into an asset for drug development and a company and they and want some help doing this. There are lots of really good potentially entrepreneurial scientists at these academic centers working on great stuff who don't successfully navigate that transition to company development building, and it's because it's not what they're good at. It's not what they've been trained todo. It's not what they focused on. It's not what they enjoy the most themselves or whatever, but they, they don't know how to get connected with venture capitalists. They don't know how to do pitch decks and start a company, incorporate even, that kind of stuff. So anyway, we're creating a global community. The scientists will recruit their colleagues whom they know might fit that category and want some help to come and apply. And then the community will end up reviewing all the applications, screening them, and then ultimately rank ordering each scientist as an individual.
[00:24:27] And so at the end, if you have a few hundred applications we'll know which 20 percent made the top cut and ultimately which were the very top 10 in order of the judgment of the entire community of scientists. Then what we'll do is we're creating a venture foundry that will support a subset of those, that top 10, some pre seed money and the help they need to recruit a CEO and advice from our personnel and our advisory board and help from our network and connections of CROs and CDMOs and the like.
[00:25:04] And so really we're trying to make it as plug-and-play as possible for the scientists, make it easy for them to make that transition and we're hoping between the wisdom of the crowds, the better opportunity for global sourcing, then sort of the happenstance, you know, process we have today, and then the support and infrastructure we put around them that we'll get both more shots on goal, but we'll also get better quality shots on goal with a better idea towards which are the ones that have the best chance of making it.
[00:25:35] And in that way reduce the cost of some of those failures. That's the value or the potential value we see in decentralizing the front end research. And then in the middle and later stages, you have drug development and you have manufacturing and commercialization and our intent is to decentralize those as well.
[00:25:56] And that part of the enterprise will run like other venture foundries, including the early ones that are have now come to the biotech world. Flagship Pioneering, I would say, is a leading example of that. And so instead of, in a big integrated company like Novartis or Pfizer or BMS, you do your own drug development.
[00:26:18] Now, oftentimes you have vendors that are helping you, but you have a large, dispersed, integrated department of people, typically thousands or tens of thousands of people, who are doing this. We don't see that as part of our decentralized system, instead we would have early startups that are doing this work themselves.
[00:26:41] If there's some advantage to having some centralized center of excellence, then we can build, a pool, a bank of, expertise that the portfolio of companies could call upon. So you don't have to lose all of the value of centralization and scale. But through this manner our hypothesis is you can avoid some of the bloat and the bureaucracy and the slowness and even reduction in quality of decision making that occurs for any of us that have worked inside large organizations. I know it myself. I look back on it. And I know that many of my meetings that I did through the years were low impact meetings and were unnecessary.
[00:27:20] And we had way too many people at them. You know, we could have done it with a fraction of the number of people there. And so many folks were either just, they were waiting to kind of hear what the boss was going to think, you know, about this. And then, you know, how do I line up with that and get on the right side of this issue?
[00:27:37] And so all of the things that are part of human nature and that come with being part of a large complex organization. And so we'll try to change that dynamic in the drug development world and hopefully, make that more effective and more efficient as well. But then, likewise, in the commercialization, we'll replace the large global business units, just as Flagship does, with instead, a portfolio of companies that can partner with our network of collaborators, the CDMOs in this case to do the manufacturing, do the distribution and do the commercialization around the world. And, we'll see. There's no guarantee that this is going to work, but, we've been researching it a longtime. We have reasons to believe. And, I think we're in the good fortune now of being close to be able to launch and test our hypotheses.
[00:28:27] Syam Palakurthy: Yeah, that's really cool. So,so kind of to summarize, I feel like there's a few themes there. One, how doyou use the wisdom of the crowd, so to speak, to get the best ideas from peoplewho might not normally be contributing or might not normally have a voice inthat. Two, how do you take advantage of the decentralized aspect to be able toget ideas and, and work from people all over the world.
[00:28:52] Three. Making itjust as frictionless as possible. Like you mentioned the centers of excellenceand then giving people the right incentives so that they're actually asindividuals and as groups working on the right thing. I think that's reallyfascinating. And, Scott, if this works, ifyou're able to, you know, make it more likely for a molecule to go from thatearly research to phase one, phase two, phase three, or to get drugs out tomarket, what do you think the impact is for patient access which is the themeof this podcast?
[00:29:25] Scott Howell: Yeah, well, I think it dependson how good you could get and we don't know the answer to this. The reality islike if you're targeting super small population conditions, like we talkedabout earlier, the prices are going to be high.
[00:29:39] It just that's tomake the business work. But the question is, like, how high, you know, and andif you if you reflect on it and you say, well, we have the prices we havegenerally in a system that works, , 10 percent of the time, 10 percent of theassets that enter phase one ultimately make it to market.
[00:30:00] What if you couldimprove that by a half, what if you could make it 15%? Or what if you coulddouble it and make it 20%? Or what if you could make it 30%? How much couldprices come down and still return, what the shareholders are expecting in thisspace of risk and time, the time for development and all those things. So we,we don't know. I mean, it's all conjecture at this point. But, you know, when Istep back and think of like, well, what's possible, what could be, it doesn'tfeel like a super stretch to say that, well, maybe we could do half better.There's reason to hope that you can make a large impact. So, you know, that'swhat we'll see. This is a journey.
[00:30:47] We've been on it for five years already, you know, and we're just now start getting started really.And, and the hope is that we'll learn and adapt and the people working with us will learn and adapt this thing will, hopefully it'll survive me long into the future. And, you know, in 20 years or 40 years from now, looking back on it, we'll know really what was possible, but it doesn't, it doesn't , feel crazy tome right now.
[00:31:14] So we're optimistic.
[00:31:16] Syam Palakurthy: Not crazy is good. Not crazy is a good thing. Yeah, no, I love that. If you can change the success rate, then you fundamentally change the economics, which can mean, you know, potentially going back to the very beginning of this conversation, lower, lower potential prices, you know, the, the payers don't need to, don't need to,
[00:31:35] Scott Howell: Exactly.
[00:31:36] Syam Palakurthy: You create the same regime,yeah, I can have all this impact that all the way hits to, you know, patientsare maybe able to get access to more drugs with less friction, less burden,less pain that's extracted along the way. I think it's a fascinating idea.
[00:31:52] Kip Theno: I agree. I mean, the solving the discovery and development is encouraging, Scott, and I want to go back to something we talked about in the pre show, and I don't want the perspective lost here either because you brought it up here that many of these discoveries don't make it to market.
[00:32:06] And that's probably a fact of life. But we also talked about, you know back before the earth cooled, when I was with Merck pharmaceutical, a budding young professional, big hyperlipidemics were coming out the groundbreaking trailblazing COX-2's were coming out, and I saw a presentation where the company said "hey, here's 50 molecules we're working on, and here's the one or two that we think we're going to get over the next one or two years. Well that leaves 48-49 that never make it. I can't imagine not all of those were viable and could have been massive groundbreaking stuff, but cost benefit prohibitive as you're talking about here. What about retrospective?That's just one company out of all of them. How many of these? How many are in the molecular graveyard that could be open sourced?
[00:32:46] Or you could figure out to go back and say,"Hey, these could be viable today."
[00:32:50] Scott Howell: Yeah, great point. Kip. The many of the academic scientists that we've Interviewed and have worked with are very keen to research that and learn about that themselves. The reality is that the companies do have large libraries of drugs and potential drugs including things that oftentimes have already been tested in humans. And they and then so they have some degree of confidence about the safety profile. But because of competing priorities or whatever else the circumstances might have been, they were put on the shelves, and have not seen the light of day.
[00:33:28] And so, many of the scientists we speak to are aware of that and their hope is that we can operate in a low cost enough environment that we can make some of those sleeping assets, if you will, potentially viable in the future.
[00:33:44] And, you know, again, who knows, right? Folks that know me, know I'm a realist. And, and so I guard myself continually against too much what if ism, but at the same time, again, you know, Syam, it's another one of those things that doesn't feel crazy to me that, you know, some of that stuff ought to be able to be repurposed and i t's all already got a head start on, you know, some of the toxicology and, and maybe we can do that for a much lower cost.
[00:34:12] Syam Palakurthy: Yeah, I love this. I love the vision. I love just the taking a really bold approach and a different approach to solve a set of challenges. That's frankly, really big and really important to be addressing. So, Scott, it's been really fascinating conversation. Thank you so much for jumping on.
[00:34:31] Scott Howell: Hey, my pleasure joining, you guys, Kip and Syam.
[00:34:34] Congratulations on all the progress and success you're having as well. This is super important stuff, as you know, and it's valuable to the doctors and practices you serve and also to the patients you serve as well. And I'm glad you're doing it and I'm glad we have people like you, you know taking these challenges on everyday. So thanks for thanks for chatting with me.
[00:34:55] Kip Theno: Well Scott and Syam. Thank you so much and Scott, we're not quite done yet, two quick things: This is profound.We want to get it out to as many people as humanly possible for what you're doing and your insights today. First thing is how do folks reach you out there Scott?
[00:35:09] Scott Howell: Ah, yes, so the company that we're forming is called SynapseSciences.
[00:35:13] And we do have a page on LinkedIn. I personally can be reached at the emailscott@synapsesciences.com. This is one of the joys of what I get to do these days is to network, interact with folks.And I'm always happy to hear from folks.
[00:35:30] So ring me up if there's something I can help with.
[00:35:34] Kip Theno: No, we will. We'll make sure and post all that in the podcast for the episode. And Scott, last question. I always do an Easter egg and I know you're busy and have to go. When we first met, you were wearing a Notre Dame fighting Irish. And as you know, I went to Culver Academies, uh, stones throw away, spent a lot of time up at Notre Dame in the Lou Holtz era.
[00:35:54] Here's my question.Are they ever going to win again?
[00:35:58] Scott Howell: Well, so, you know, every year at the beginning of the year, Kip, I declare, this is our year.
[00:36:05] And now, as you know, it's a high bar, and if you don't win the national championship at a place like Notre Dame, then, you know, it's almost like you didn't win, right?
[00:36:14] But the reality is they've got a great program there. They win lots and lots of games, every year.And most years they're in the hunt until, you know, at least late in the season. And that includes this year. And so Kip, I'm declaring this is our year.
[00:36:30] Syam Palakurthy: By the way, Scott, the way, the way Kip coaches his kids hockey team is you don't win the national championship... didn't do anything.
[00:36:37] Kip Theno: If you're not first, you're last guys, that's it.
[00:36:42] Well Scott, Syamthis was a pleasure to have you on and that's a wrap. Thank you so much forjoining The Road to Care podcast.
[00:36:48] Scott Howell: Thank you.
[00:36:50]
[00:36:50] Kip Theno: Thank you for joining the Road toCare podcast hosted by SamaCare, the leader in prior authorization technology and services, where through a script to therapy operating system, we enable connectivity with clinics, payers, and manufacturers focused on optimizing patient care. Tune in next time as together we can make things right.
[00:37:09] Enjoy the music written, produced and recorded by Jamestown.
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