Nov. 12, 2010, Chadds Ford, PA. Endo Pharmaceuticals CEO David Holveck was the guest speaker at today’s Executive Women’s Breakfast hosted by the Healthcare Businesswomen’s Association Greater Philadelphia chapter (HBA GP). His talk focused on how Endo’s core strategy is evolving in response to the changing U.S. health care environment, but many of the points he made in “Our Industry Through a Different Lens” are applicable to the pharma industry at large.
Holveck sees three key drivers of change that pharma must respond to: 1.) economics; 2) access; and 3) outcomes. “We in the pharma industry have been privileged for decades in that we didn’t have to innovate beyond products,” he explains. “Now we have to move beyond products to cost-effective solutions that broaden access and improve outcomes.” The future innovation that’s needed is a new business model that adds value across the entire care pathway.
For Endo’s transformation Holveck staked out a therapeutic area—quite literally—the pelvis. Then he acquired Indevus (urology and endocrinology drugs), HealthTronics (urology diagnostics and services) and Qualitest (generic pain meds) to build his pain franchise into an integrated solution for urology and endocrinology. He foresees broadening distribution beyond physicians and hospitals to specialized urology clinics, where there is a clear start and finish to therapy and consumer-driven incentive to deliver the best and most cost-effective results. “We’re talking about consumers putting money on the table wanting an outcome.” There he envisions Endo offering a full range of products, from diagnostics and devices to branded and generic medications, which touch every step in the care pathway to produce reliable outcomes.
This products-plus-solutions model is the first step toward what Holveck sees as a fully integrated system—a distributed health network of management, diagnostics and therapeutics—with Endo providing a value-added service, not just products. To get there, he readily admits, “We have to own the outcomes,” which historically have been the province of the payers. “Until the pharma industry gets a better handle on data and outcomes, we’re going to be discounted pretty quickly in the healthcare system,” he warns.
The evolution from products to products-plus-solutions to fully integrated system is an intriguing idea, and truly a sea change for the pharmaceutical industry. It means becoming an integral part of the health care system, rather than merely a supplier to it. It means switching from a manufacturing to a service model. It means adding value and owning outcomes to have its services welcomed. But the end result—a consumer-centric model that improves access to affordable quality care for everyone—could be just what the doctor ordered.