With the year rapidly coming to a close, we’ve decided to take you on a trip down memory lane to recap the biggest stories and trends of 2017. We don’t know about you, but we’ll admit that this year had us in disbelief more than a few times. Politics, sports, tech, entertainment—and let’s not forget healthcare—all saw their fair share of blunders.
But apologies weren’t the only thing trending this year. So sit back, pour a mug of coffee and settle in for The Year That Was…
► AMERICA'S OPIOID ADDICTION
While the opioid epidemic was not technically “new” this year, it was a banner year for the public health crisis, and the conversation surrounding it. In a round of firsts: the FDA took steps to remove an opioid pain medication, Opana ER, from the market due to abuse concerns, and Trump became the first president to declare the epidemic a national emergency. A number of healthcare payers pledged efforts to curb the crisis: Cigna will stop covering OxyContin, Aetna will no longer charge a co-pay for rescue medication Narcan and Express Scripts unveiled a program to limit dosage and strength of prescriptions for first-time users. In Washington, Senator McCaskill (D-MO) looked under the hood of Insys, while outgoing Gov. Chris Christie (R-NJ) and chair of the President’s Opioid Commission released a long-awaited report on the crisis—and then passed the reigns as chief opioid spokesperson to White House advisor Kellyanne Conway, the new “Opioid Czar.” Oh, and House and Senate Committees held hearing after hearing after hearing.
► OUR TAKE
What’s different about the epidemic this year? The palpable anger and frustration emanating from key stakeholders who seem to know how to tackle the crisis, but lack resources to actually make it happen. In Congressional hearings, the question was not, “What do we do?” Rather, it was: “Who is going to pay for these solutions and enforce them?” Perhaps the biggest critique from public health experts on the Commission’s report was its failure to include any federal funding despite the fact that the recommendations would likely cost tens of billions of dollars to implement.
With few currently accountable for catching the “hot potato” of opioid treatment and counseling reforms – the lack of action leaves an urgent void and frustrated families and communities seeking solutions. In this environment, even responsible makers of pain medicines are painted as the enemy—a scenario that seems to be worsening as other stakeholders pledge to reduce access to opioid products. So, what can we expect next year? The answer: potentially more well-intended interventions that are incomplete solutions to an acute challenge. In 2018, plan on:
• The FDA using real-time surveillance data to catch new and emerging pockets of abuse in communities before they can potentially expand
• States and communities continuing to investigate pharma marketing practices of pain meds
• Health systems vowing to curb pain-management products that have potentially harmful or limited impact
• Payers continuing to manage access to higher-cost pain medicines that apply abuse deterrence technologies
• An ongoing industry race to find non-opioid pain treatments to help the millions of Americans who live in chronic pain.
Our dose of advice: for companies making pain-management therapies, clear, consistent communication on the safety, efficacy and proper use and distribution of your products is a must-have for 2018, coupled with a “bench” of those who can attest and contextualize their benefits.
► YOUR 2017 MUST-READS
• Amid Opioid Crisis, Insurers Restrict Pricey, Less Addictive Painkillers, The New York Times, Katie Thomas and Charles Ornstein
• Ex-DEA agent: Opioid crisis fueled by drug industry and Congress, 60 Minutes, Bill Whitaker
• A potent painkiller, and the drug maker’s marketing, are faulted in a woman’s death, STAT, David Armstrong
► SCANDALS, SILENCE-BREAKING AND SOCIAL JUSTICE
From Hollywood, Silicon Valley, academia, the restaurant business, and of course, healthcare—no industry was void of social justice issues in 2017. It goes without saying that sexual harassment was a particularly hot button topic, starting with Uber investigating claims in February. The issue transformed into a full-blown social crisis once allegations against Harvey Weinstein were made public by The New York Times in early October. Such claims have since blanketed the nation, hitting close to home as controversy swirls around biotech hedge fund managing partner Sam Isaly.
Controversy surrounding immigration legislation mounted, as CEOs from more than 400 companies such as Amazon, Microsoft and Facebook put pen to paper to protest the Trump administration’s stance on The Deferred Action for Childhood Arrivals policy (DACA). And a number of companies proactively addressed racial tensions—with mixed results. Pepsi wound up issuing apologies in the face of overwhelming scrutiny for positioning Kendall Jenner and soda as the keys to de-escalating an imaginary social protest, while Merck’s Ken Frazier led a contingent of CEOs in resigning from POTUS’ American Manufacturing business advisory council following real protests in Charlottesville. Whether proactive or reactive, leaders of industry were called upon to assert their personal—and in turn their company’s—moral character in the face of some hotly debated social issues.
► OUR TAKE
Questions about moral integrity and public policy are routinely colliding on our national discourse, making it a sensitive time to be a leader of a publicly traded organization. Regardless of whether CEOs desire to wade into these debates—the actions of others are increasingly forcing them into the conversation—such as the case of Intel and Under Armor’s CEOs who faced pressure to resign from the President’s Council following Mr. Frazier’s departure. In this era, silence can be interpretted as dispassion, even among your own workforce.
Therefore, a big communications challenge facing corporate executives is responding to allegations of misconduct with clear, transparent communications while preserving the confidentiality required for ongoing investigations. One thing is certain: in today’s world, a company’s human resources and internal communications team must go into overdrive to reassure employees of where the company stands. Maintaining robust policies and issues management plans on matters of social justice and discrimination are vital to address violations of any kind as soon as they arise. Keeping these policies in place can prevent further crises, while also ensuring company-wide alignment.
► YOUR 2017 MUST-READS
• Person of the Year 2017: The Silence Breakers, TIME, Stephanie Zacharek, Eliana Dockterman, Hailey Sweetland Edwards
• How on Earth Does an Ad Like Pepsi's Get Approved?, The Atlantic, Joe Pinsker
• Three CEOs Resign From Trump’s Council Over Charlottesville, Reuters, Michael Erman
► VALUE, VALUE, VALUE
We know we sometimes sound like a broken record, but we can never ignore the ever-present issue facing the biopharma world: drug pricing. This year brought little relief from the intense scrutiny of the prices of pharmaceutical therapies.
In August, Novartis’ CAR-T Kymriah went on the market at a whopping $475,000 for a one-time treatment course. The list price was both more and less expensive than what a range of analysts had expected. At the price reveal, Novartis communicated the “transformative” and “historic” nature of this cancer drug, which teaches a patient’s cells to fight cancer. Novartis also stated that the price would be contingent on clinical outcomes: government payers would only reimburse Novartis if patients had responded to Kymriah within a month of starting the treatment.
New “benchmarks” were released into the environment: in March, Modern Healthcare found the price of oncology drugs to be “unsustainable” with median launch prices of a new anticancer drugs coming in at $10,000/month. A NORD report in October placed the median annual cost for an orphan drug in 2016 at about $32,000 per year. Finger pointing intensified: President Trump often called out pharma companies for “getting away with murder” on drug pricing. Aetna’s CEO Mark Bertolini said drug costs and double digit price increases—driven largely by specialty drugs—must be addressed “sooner rather than later” if we desire more affordable premiums. At the same time, industry representatives counter-punched: Bayer CEO Werner Baumann demanded that POTUS develop “a better understanding of the overall healthcare market, the industry and what is really driving costs up.” PhRMA launched an aggressive campaign calling attention to the role hospitals play in high drug costs and a NYT/ProPublica collaboration piece suggested insurers play a heavy hand in the drug pricing and access conundrum.
► OUR TAKE
Though the environment remained unfriendly to biopharma companies, we noticed that companies were better prepared for these conversations. CEOs proactively brought up pricing, companies disclosed their prices at approval and “novel” pricing models or pledges were almost commonplace. All of this contributed to the key difference of this year: a focus on value over price.
This shift from “price” to “value” is an important one. Companies have an opportunity to communicate to their stakeholders the significance of their treatment, and the real-life impact it can have for patients. But there’s still a stumbling block ahead: a recent study showed that “value” is one of 2017’s least definable words. Its overuse and the lack of specificity created an environment where communicating “value” doesn’t mean much.
So what should companies do in the New Year? Consider price scrutiny a “when” and not an “if.” Resist the urge to shift blame and instead focus on proactively telling the story of your company and therapy. And, when you do, remember that the story should be comprehensive, taking into account price, accessibility, treatment results, effect on lifestyle, and everything else that changes in a patient’s life with new therapy options. You price drugs based on myriad critical factors; you should communicate those considerations when forfending your value against pushback.
► YOUR 2017 MUST-READS
• ‘Value’ is medicine’s favorite buzzword. But whose definition are we using?, STAT, Casey Ross
• Everyone Wants to Reduce Drug Prices. So Why Can’t We Do It?, New York Times, Jay Hancock
• Report: Here's What The Feds Can Do To Cut Drug Prices, NPR, Alison Kodjak
• Drug Puts A $750,000 ‘Price Tag On Life’, Kaiser Health News, Julie Appleby
• Prescription Drugs May Cost More With Insurance Than Without It, New York Times, Charles Ornstein and Katie Thomas
That's it for TWTW team for the year of 2017. Enjoy the rest of your holiday season, and we'll see you in the new year.
Until next time,
- the Reputation & Risk Management Practice