City of Paris

The Heart of Power: Health and Politics in the Oval Office by David Blumenthal and James A. Morone is probably the most important book I read this year—important because of the perspective it offers on healthcare reform through a systematic analysis of how each president since Franklin D. Roosevelt attempted and largely failed at healthcare reform.

Strength in What Remains: A journal of remembrance and forgiveness by Tracy Kidder is a moving story about Deo, a young doctor who survived his native Burundi and Rwanda, only to find himself on the streets of New York.

I don’t know why I had never read The Alchemist: A Fable About Following Your Dream by Paulo Coehlo until a good friend gave me a copy this year. It’s never too late!

Inside Steve’s Brain (Expanded Edition) by Leander Kahney is an entertaining and educational account of the ways of Steve Jobs and his innovations. Treat yourself!

And finally, an oldie but goodie that I read again this year, Paris to the Moon by Adam Gopnik is an engaging and delicious account of Paris (and France) from a New Yorker’s point of view.

“If you build it, will they pay?” So asked George Poste, DVM, PhD, at the 5th Annual Burrill Personalized Medicine Meeting, and the panel of venture capitalists offered good insights. While all agreed about the potential of personalized medicine, they differed in their definition of the field and how they assess the risks and opportunities. Risa Stack of KPCB suggests starting with the key clinical question: What is the physician’s information need for a given therapeutic category? Is that information available through diagnostics? How important is that information to the physician and the patient, and therefore what is its economic value? Brent Ahrens of Canaan Partners agreed that how a diagnostic affects therapy is the key to value creation, but that the acuity of the problem being addressed (e.g., severity, public health impact) is an added consideration. Stack suggested that the cost of therapy is a key part of the equation, in that the more expensive the therapy the more leverage from diagnostic information. Sue Siegel noted that her firm, Mohr Davidow Ventures, takes a broader view of personalized health (vs. personalized medicine) in the investment portfolio. As the panel discussed the importance of IP position, she stressed the importance of execution and considerations of reimbursement and how a diagnostic impacts workflow in the clinical context. Michael Shuster of Fenwick & West also felt that the importance of IP depends on the company.

The discussion about regulatory risk highlighted interesting contrasting views. Stack believes that, across the board, regulatory approval will be tougher, since the FDA appears to be taking a more conservative stand. She also noted that the current rules that apply to single or few genes and specific analytes do not translate easily to multivariate analyses. She echoed Margaret Hamburg’s comments about the need for educating regulators, and mentioned the efforts by the 21st Century Coalition on Medicine to work with policy makers to balance regulation with innovation. Siegel and Shuster, on the other hand, both felt that regulatory risks are there, but not higher than in other areas; Siegel suggested that there are ways to mitigate those risks.

In closing comments, Ahrens suggested that entrepreneurs reach out to the venture community and explore multiple avenues for funding as a key strategy for success. Siegel urged companies to demonstrate their understanding of risks. Stack suggested that sound knowledge of the targeted venture capital firm’s portfolio and strategies is the price of entry. Steve Burrill commented that most entrepreneurs are poorly prepared to discuss valuation in a meaningful way, particularly within the framework of perceived value. He suggested that funding is available—much more so than a year ago—but valuation is at a low today. In fact, in his opening remarks, he suggested that entrepreneurs put the concept of “dilution” out of their minds and focus on securing the needed capital.

George Poste, DVM, PhD, Arizona State University, and Leroy Hood, MD, PhD, Institute for Systems Biology, both gave scintillating talks at the 5th Annual Burrill Personalized Medicine Meeting last week. Poste offered a big-picture view of healthcare and the sociopolitical, regulatory and business environment within which innovation must thrive and advance. He spoke of the need for “harmonizing incentives for diverse constituencies” and the inefficiencies and waste associated with the current system of siloed care and procedure-based reimbursement, and pointed to the estimated annual cost of $177 billion attributed to patient noncompliance. Hood, on the other hand, made an eloquent overview of P4 (predictive, personalized, preventive and participatory) medicine as the inevitable wave of the future. He described the elegant science and the diagnostic and prognostic power of organ-specific blood fingerprinting, and boldly predicted the availability, within the next five to ten years, of $1,000 genome sequencing, routine screening of 2,500 blood proteins as part of wellness assessment and the analysis of 1,000 transcriptomes on a single run for disease stratification.

But if there was a common thread through these two talks, it was the enormity of the informatics challenge at hand. Poste used biomarkers as an example of the current “evidence dilemma.” There are more than 300,000 biomarkers in the literature today, many of which are poorly characterized and based on small-cohort studies. There are no standardized assays and little statistical robustness. Poste envisions a strategic triangle and a Dx-Tx-iHx (diagnostics-therapeutics-informatics) technology convergence, and the rise of open-source networks and consortia as scientists learn to share results and collaborate to address what he calls the omics data tidal wave. On a patient care level, Poste lamented the inefficient use of information today and envisions a new era of connectivity, where informatics is an integral part of clinical decision support.

Hood spoke of the digitalization of biology and biology as an information science. He framed the problem of too much data as one of signal to noise, where noise is winning today. He illustrated how probability models can be used to make dramatic improvements using the recently completed genome sequencing of a family of four. Using Mendelian genetics, the research team was able to reduce errors tenfold and narrow down the disease gene candidates more quickly. Hood is obviously a proponent of sequencing genes of families, where Mendelian genetics can be applied as part of the strategy to streamline analysis and reduce errors. Like Poste, Hood noted that a sound strategy for mining patient data and overcoming the technological and legal-social barriers for doing so is a high priority. And he echoed Poste’s call for standardization, especially in areas such as proteomics.

The illustrious panel of scientists, physicians, regulators and businesspeople at the 5th Annual Burrill Personalized Medicine Meeting last week once again reaffirmed the inevitable trajectory toward personalized medicine and, interestingly, that some of the forces propelling it are also the roadblocks that must be overcome. This paradox came across most clearly for me in the discussions about physician adoption, reimbursement and regulatory perspectives, the latter by FDA Commissioner Margaret Hamburg, MD.

Over and over again, panelists spoke of the flaws of the current reward system for healthcare professionals and the environment within which they operate. The system rewards doctors for the number of patients they see and the procedures they perform, leaving them little time to learn about personalized medicine or even to think about it. Education is key, starting with the incorporation of genomics in medical school curricula. Communicating to physicians in the language they understand (clinical validation) is also critical. And, Geoffrey S. Ginsburg, MD, PhD, from Duke University and Joseph D. McInerney of the National Coalition of Health Professional Education in Genetics pointed out that we should be thinking beyond physicians and include other healthcare professionals (e.g., nurses, genetic counselors) as we consider the role of the provider in the adoption of personalized medicine. Capturing comprehensive family history, which often contains a wealth of data for risk assessment and treatment decisions, has become a luxury in the time-constrained patient care environment and one that is lacking in systematic, standardized data capture capabilities.

On reimbursement, everyone agrees that the current system and CPT code system discourage innovation. And the fact that in vitro diagnostics (IVD) accounts for only 0.01 percent of healthcare expenditures suggests that there is a long way to go and that the path to personalized medicine will be paved by good strategy supported by abundant resources as illustrated by Genomic Health’s trail-blazing reimbursement strategy. Eric L. Book, MD, of Tethys Bioscience commented that “we are distracted by how much healthcare is costing right now” to the extent that sometimes pressure to improve the bottom line detracts from thinking about “doing the right thing for society.” A sobering thought.

The earnest and disarming Dr. Hamburg vowed to engage with industry and academia to advance the scientific rigor of regulatory decisions—a broad advancement of regulatory science. She spoke of a more holistic, multidisciplinary approach (i.e., more integration of diagnostics and therapeutics in review functions and processes), and more flexibility, more transparency and more clarity. Most of the audience concluded, however, that the regulatory path would get tougher, not smoother, going forward. Last but not least, although Hamburg did not provide a release date for the new IVD/MIA regulations, she did disclose in private conversations that they could be expected before the end of the year.

I had a somewhat disturbing conversation with a marketing manager last week. She was charged with revitalizing a waning product line—mature market, commoditization price pressures and unsuccessful competition for sales time. Unfortunately, the briefing took the form of a list of tactics that she had envisioned, and the list consisted of the usual suspects such as update brochure, enhance website and develop webinars. That same week, a colleague told me about a brand manager friend of hers commiserating with her about his agency, which of late has been coming up with creative concepts that miss the mark. What was puzzling to my colleague was that the agency is well respected for its work. As they spoke, my colleague realized that this was a classic case of a substandard brief that was a product of too many sources of input, a long, drawn-out but not thought-out process that resulted in a compromise. So when I saw Scott Davis’ CMOs, Regain Control of Your Destiny it seemed especially relevant. Davis cites a recent study by Prophet (the consulting firm led by David Aaker) and the Association of National Advertisers that, among other things, found that the majority admitted to spending most of their time on tactics such as budgeting and “being guided by a short-term marcom plan.” Quoting CMOs from leading corporations across a number of industries, Davis’ advice boiled down to (a) partnering with other members of the management team to help champion marketing’s role, (b) bringing insights to conversations with senior management (which of course requires taking time on a regular basis to think strategically), and (c) thinking and speaking growth not marketing, which parenthetically also means less reliance on marketing speak. On this last point, I couldn’t agree more!

As to my “all tactics” client, I got the buy-in of the director of communications (Davis’ advice [a] above) to spend some time taking a look at the market and speak to the stakeholders within the company and with key customers before delving into the relaunch. That will enable me to offer my client, the marketing manager, some insights she could perhaps share with her management—advice (b) above. And, last but not least, to me, thinking about growth means thinking broadly about the business and challenging not just the promotion facet of the marketing 4Ps, which was my initial assignment, but looking at defining specific segments where the product line has the highest chance for success and reassessing the channels to see if they are appropriate for today’s needs.

Joint Venture and Collaboration
On October 25, Xinhua Press reported that Sanofi-Aventis (Paris, France) had signed a letter of intent with Min Sheng Pharmaceuticals (Hangzhou, China) to launch a new consumer pharmaceuticals company focused on vitamins and mineral supplements. Vitamins and minerals together represent the single largest category of over-the-counter pharmaceuticals in China. In 2009, China’s OTC market reached 70 billion RMB and is expected to continue double-digit growth due to increased income and health awareness, in part through the government’s effort to educate consumers and encourage preventive health. Min Sheng’s “21-carat gold” brand is the leading vitamin brand in China. Earlier, on October 14, Medtronic announced plans to collaborate with China in developing a new generation drug-eluting stent. Medtronic has been in China since 1996 and has made numerous donations to help improve cardiovascular health, including training of some 1,800 physicians.

Debate on Future of Chinese Medicine Continues
At a recent discussion forum in Beijing, opinion leaders expressed concern that practitioners of traditional Chinese medicine (TCM) are not receiving fair compensation compared to practitioners of Western medicine. They cited the fact that the average Western medicine practitioner now receives 200,000 RMB as annual compensation, while the Chinese medicine counterpart gets 140,000 RMB. The difference in compensation is rooted, at least in part, in the reimbursement structure. Currently, only 97 of the 3,966 reimbursement codes are for TCM. Second, similar procedures are not compensated equally. For example, a cast placed by a TCM practitioner receives 40 RMB, compared to 160 RMB received by a Western medicine counterpart. The third reason is the lack of an overall compensation system for TCM hospitals. The experts agree that TCM needs to figure out how to survive before it can flourish.

Five Billion (RMB) Allocated to H1N1 Prevention
Since April of this year, the central Chinese government has allocated 5 billion RMB to the prevention of an H1N1 epidemic. This does not include expenditures by local governments. On October 13, the Ministry of Health (MOH) published new guidelines (third edition, 2009) for the management of H1N1. It identifies high-risk individuals for aggressive treatment, starting with hospitalization. MOH designates pregnancy, obesity, age under 5 or over 65 and those with chronic diseases and immunodeficiency as high risk.

The Chinese View: Why Americans Have a Hard Time with Healthcare Reform
The Chinese Academy of Science members offer their opinion on America’s difficulty with healthcare reform. It boils the issue down to Americans’ “fear of taxation and big government” and cites the repeated attempts, starting with Truman and on to Democrat successors Kennedy, Johnson and Clinton, to reform America’s healthcare system. It traces Americans’ fear of taxation and government back to colonial days, suggesting that even the poor without adequate healthcare coverage today mistrust the government and any nationalization of healthcare.