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LSINW 2014: Plenary Session Recaps
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Expert Panels and Speakers at LSINW 2014- Session Recaps

 

Opening Keynote: John Crowley, Chairman and Chief Executive Officer, Amicus Therapeutics


Written by 
Michael P. Owen

After providing an exciting welcome speech to start 2014 Life Science Innovation Northwest (LSINW), WBBA President and CEO Chris Rivera introduced Mr. Crowley with a brief biography; Crowley is a man who has held the roles of executive, entrepreneur, investor, soldier, and most importantly, husband and father. Mr. Crowley was scheduled to give his speech last year but had to cancel and postpone it because of a family medical emergency, one Mr. Crowley would explain in his address.

 

Following this introduction, the official trailer to the 2010 movie Extraordinary Measures was played for the audience.

 

Mr. Crowley said he came into biotechnology, "more by an accident of fate of genetics than any particular plan." He mentioned that audiences who listen to him talk, always ask two specific questions. First, how did the movie get to be made about his family's journey. Second, how are the kids today?

 

The journey of Mr. Crowley and his family started in 1998 with his daughter Megan, 15 months old, and his son Patrick, 7 days old, being diagnosed with Pompe disease, a terminal genetic disorder. Mr. Crowley and his wife Aileen were told their children would only live to two years of age. From 1998 to 2003, the couple worked to establish a small biotechnology company to develop a medicine that could be used to treat their children and others with Pompe disease. The medicine was eventually developed within Genzyme. In January 2003, almost five years after their diagnoses, Megan and Patrick started receiving enzyme replacement therapy (ERT).

 

Mr. Crowley described 2003 as being a really good year. Megan and Patrick were showing signs of improvement as they received the new treatment. Geeta Anand, a reporter for The Wall Street Journal, followed the progress of the Crowley family, writing an article that appeared on the front page of that newspaper in August 2003. One of the many individuals who read that article was legendary actor Harrison Ford who supported making the story into a motion picture: Extraordinary Measures. Mr. Crowley said, "It has become a great vehicle for us."

 

Mr. Crowley next addressed the disconnect that often occurs between biotechnology and the general public. "In Washington, D.C., we talk about what it takes to develop a drug. We all live in this world where we understand pre-clinical studies, toxicology, bioreactors and PK studies. The rest of the world does not speak your language. It has been a great vehicle also to show Megan and Patrick as the proxies for millions of people who live with rare, genetic diseases and thrive despite their disorders."

 

Megan and Patrick were not supposed to live to be 5 or 6 years old. Today, both children are in high school. Megan is a 17-year-old junior and Patrick is a 16-and-a-half year old sophomore. They are still in wheelchairs and ventilator-dependent, but according to Mr. Crowley, they are amazing and precocious kids. Mr. Crowley told the audience that Pompe disease leaves the mind intact and Megan is a bright kid. The ERT has bought time. Megan and Patrick have a future because of people in the medical world.

 

Mr. Crowley explained that making medicine always starts with somebody in need; either they or parents going to someone who has knowledge usually starting with the four words, "We have a problem." A scientist or physician on the other side answers with the four words, "I have an idea." Patients, families, patient foundations, academic research, small companies, large companies, the NIH, the FDA and the services and supply industry come together to solve that problem.

 

After sharing a dinner conversation he had with a potential investor, Mr. Crowley addressed one of the core differences and challenges with biotechnology, "We are unique in that before we ever get to competition, price, marketing, all the basic blocking and tackling to build a business, we have to perfect a technology that works. And this is really a hard business to find a technology that works." He then added, "If you think about it, almost everything we do does not work."

 

Mr. Crowley continued his talk by focusing on several concepts important in all businesses but especially in biotechnology.

 

First, one must have vision of what is going to be built. The founding of Genentech in 1976 not only established a company, it also established an entire industry. Second, risk-taking is required in biotechnology. Mr. Crowley explained risk-taking was critical in the story of how Ceredase was developed by Genzyme for Gaucher's disease. Third, the most important principle is persistence. Mr. Crowley shared the story, when the stock performance of Amicus Therapeutics was marginal a friend told him, "If you believe in the science, and you are honest, keep pushing it as far and hard as you can." Mr. Crowley then narrated a story how Jonas Salk, MD considered ending his development of polio vaccine and then changed his mind when looking at children playing in a park. Mr. Crowley added his office has a black-and-white photograph of Dr. Salk with the scientist's autograph. Mr. Crowley said that photo is a strong reminder of persistence.

 

At this point, a second video was shown to the audience: Meeting the Real Megan and Patrick

 

Mr. Crowley explained the reason his keynote address was not given last year was his daughter was recovering from scoliosis correction surgery. As expected from any proud father, Mr. Crowley described his daughter's bravery. During the pre-op meeting, Megan listened to all of the potential complications from the surgery, including a 5 to 10 percent chance of not surviving the procedure. Megan looked at him without flinching and said "I understand." Mr. Crowley described Megan as, "one of countless people who make those agonizing choices to undergo procedures we design, clinical studies we lay out, fraught with incredible risk, sometimes pain and chances of receiving a placebo. They really are the central actors on the stage of our medical innovation."

 

Mr. Crowley asked, "What does biotechnology provide?" He gave the answer, "We provide hope." Mr. Crowley recalled attending a speech by the late Christopher Reeve. The actor stated biotechnology provides hope to people living today, people who have not been born yet, people needing hope now and people who do not know they need hope, such as a high-school football player who breaks his neck one or two years from now, changing his life forever.

 

To succeed in biotechnology, you also need to be honest. Mr. Crowley recalled during the early days of Novazyme Pharmaceuticals, when providing honest results of clinical data that did not work, the company's stock price dropped significantly. A friend gave him priceless advice, “Companies in this industry fail for only one reason: running out of money. Executives and entrepreneurs in this industry fail for only one reason: losing their credibility. You cannot ever lose that credibility. It is okay to say something does not work. Most of the time it is not going to work."

 

The last lesson Mr. Crowley wanted to leave the audience was humility. After traveling and attending meetings across the country for two weeks as preparation for the IPO of Amicus Therapeutics, Mr. Crowley returned to his New Jersey home. Megan asked about his business trip and mentioned she saw her father on television. She commented he looked very short on television but his yellow necktie looked great. She was proud of her father, but she was also interested in knowing if he would be home the next morning and to take her to school. Mr. Crowley said, "I think in that moment I realized the humility in success. Believe me, as a biotech entrepreneur you are humbled many times."

 

Mr. Crowley next made three poignant statements. "What we do is incredibly important. Hard work is the price of success. Eventually it comes back to time." He ended with a reading of the epilogue to The Curethe book written by Geeta Anand, the journalist who wrote the article in The Wall Street Journal about Megan and Patrick. The Cure inspired the movie Extraordinary Measures. Mr. Crowley said the epilogue "sums up many of themes I have shared this morning; particularly the theme of time." After reading that passage, Mr. Crowley thanked Chris Rivera for the invitation and wished the audience good luck in everything they are doing in biotechnology. His final comment was, "It is a tough business, but when it works, it is the best job you can have."

 

There were very few members of the audience who had dry eyes after the conclusion of the heart-and-soul-touching keynote address.


Luncheon Interview Between Jim Olson and Sue Siegel


Written by Graciela Matrajt | University of Washington

 

The luncheon Fireside chat took place between Sue Siegel, Chief Executive Officer, GE Ventures and Healthymagination, and Jim Olson, MD, PhD, Fred Hutchinson Cancer Research CenterUniversity of Washington, Founder of Presage Biosciences and Co-Founder of Blaze Bioscience, Inc.

 

Jim Olson started the conversation stating that he likes the innovative spirit of the Hutch community, where he works, and added that 15 years ago, he used some new technology to measure genes in tumors. Sue Siegel invented that technology while she was part of the company Affymetrix. Olson recalled one Sunday night coming to Affymetrix to discuss the technology. He was surprised to find so many people discussing science and innovation at that time of the day. Olson asked Siegel how she created such a good environment in her company.

 

Siegel said that in 1998 the Human Genome Project was close to its first iteration. Her company had a technology to take all the genome information and put it in a chip, which enabled comparisons between a normal genome and the genome of a sick individual. This technology was the Next Generation Sequencing and Siegel and all the people of Affymetrix were very interested in using it for a good cause like personalized medicine. Siegel explained that people joined her company because they wanted to have an impact and be part of an exciting mission. For them, putting the whole human genome in a chip was as challenging and important as the Apollo Missions. Olson said that he knew Siegel was a great leader and was very successful in putting a group of excellent people together to perform such a mission. Then Siegel explained that it is a remarkable feeling when you provide solutions to help others solve problems. For her and her company, it was very satisfying to know that people were using the Affymetrix technology and were publishing outstanding discoveries every other week.

 

Olson then recalled that he went to the company to generate data and that they were having serious technical problems. Despite those problems, the company preserved. Olson asked Siegel what she learned from those difficult times. Siegel replied that the company had 8% manufacturing yields. Affymetrix was a public company where scientists were packaging genomes into the chips and were putting data in public databases. Despite the technical issues, customers still wanted the product. She then cited an example: for the mouse genome, the sequence is backwards. The data was coming from all kinds of different labs. Affymetrix had no control over the accuracy of the data; they were just putting the information into the chips. It was unclear who was responsible for these mistakes, but she still thought that Affymetrix should refund the costs to the customers, because Affymetrix was customer-centered. They refunded approximately one billion dollars.

 

Olson then asked, what were the things that were more successful with her partners and what were the things that failed? Siegel responded that there were several things to consider. First, the partners need to agree on the criteria and the foundations of the company they want to create. You need to decide what is the problem you want to solve and with which technology. Then you have to choose your initial team. Your team needs to have vision. Having a good team is essential for success. The company needs to understand the problem and develop good technologies to solve it. You also need to ask yourself who is going to pay for the technology. Usually, investors want to know who is going to pay and how and under which conditions. Investors have a limited amount of risk they are willing to take.

 

Then Olson said that he met some of her company people before founding his company, Presage Biosciences. He recalled having talked with ~30 people who founded their own companies and, from those conversations, he learned that there are three reasons why companies fail after a few years. The first reason is that scientists think they know how to do good business. Second, they start the company too soon and, finally, they don’t predict what will happen in the market. Olson asked Siegel whether she could add anything else. Siegel added that the timing is indeed very important. If your business model does not fit the present time, then you may fail.

 

Olson then continued saying that part of the success of Presage Biosciences is that he followed advice given by many funders who did not fund his company. Based on that advice, Olson and his colleagues reshaped their business and partnered with pharmaceutical companies. Siegel mentioned Olson’s crowdfunding success (referring to Olson’s Project Violet) and said that those methods can be excellent for getting a business started. “Then you can approach investors again showing them there is less risk than previously thought,” commented Siegel.

 

Then Siegel asked Olson to describe how he started Project Violet. Olson said that he has worked with small proteins for ten years, and some of the discoveries he made were used to develop Tumor Paint (a product he sells through Blaze Biosciences). Olson said there are very few molecules that can cross the blood-brain barrier and he wanted to use those molecules for therapeutics. He explained that most diseases in the brain are related to protein-protein interactions. Currently, Olson is working with a new category of drugs that can be developed fast and inexpensively. He recognizes that these drugs could be used to treat rare diseases and, precisely for that reason, he didn’t want to give them to pharmaceutical companies, but directly to people. He opened his discoveries to citizen science, so people could adopt a drug and follow its progress. The project started in June 2013 and since then, they have raised five million dollars to build a huge library of drugs.

 

Siegel then talked about General Electrics (GE), the company where she currently runs a couple of programs. She explained that she joined the company because GE was one of the first entrepreneurs to find success under the partnership model. One of the programs Siegel runs is Healthymagination. It was created to help solve the three biggest problems society faces today: healthcare, energy, and education. Healthymagination was created in 2010 and dedicates three billion dollars per year to help pay for employee healthcare. GE has another program called Brain Health. “Alzheimer’s disease is hitting earlier and earlier”, Siegel said. “That affects productivity”. The Brain Health programs aims to understand and provide tools to help cure, prevent, and treat the disease. Siegel reminded the audience that the government has already started the effort to better understand and map the brain.

 

Olson added that, earlier that day, Lance Stewart and other entrepreneurs told him that they all wanted to focus their research and their institutes’ missions on the brain. These groups want to develop efforts to advance knowledge on the brain, medical devices, imaging, and therapeutics related to the brain. He asked Siegel how these groups could connect with GE. Siegel answered that a Brain Trust Meeting started nine months ago to attract groups, institutions and organizations to work all together on brain health. The mission of the Trust is to work on a worldwide community. Siegel also mentioned that interested people should consult the website gventures.com to see GE’s investing trends.

 

Finally, Olson asked Siegel whether she had a favorite book to recommend. Siegel answered that she liked Tracy Kidder’s “Mountains Beyond Mountains,” which talks about healthcare delivery, particularly the treatment of tuberculosis, in the mountains.

 

Siegel gave a final statement saying that the trends in healthcare are currently the brain, the cost of healthcare, and telehealh (using digital technologies). She also said that there is a trend to go beyond the hospital and do clinics in partnership with Walgreens, CVC pharmacy, Bartells, etc, where a patient can receive basic healthcare. Siegel added that digital technologies are prevalent as more and more things are networked, which will drive the healthcare costs down.

 

One person in the public asked what the major barriers to development and reimbursement are. Siegel replied that GE is trying to help with reimbursement. She said that while the FDA provides guidance for the world of digitalization, GE thinks there is a need to provide guidance to get reimbursement in the regulatory front. In summary, GE is an entrepreneur that is looking to invest in research involving the brain, and in methods to decrease healthcare costs and facilitate reimbursement.

 


Young & Cash Hungry: Tips and Trends for Life Science Start-ups


Written by 
Anthony Au | University of Washington

The panel discussion entitled, “Young & Cash Hungry: Tips and Trends for Life Science Start-ups” was moderated by Jason Forschler, Executive Director of Healthcare Investment Banking at J.P. Morgan.

Panel Members:

 John Bencich, CFO of Integrated Diagnostics
 Stefan Larson, PhD, Entrepreneur-in-Residence at Versant Ventures
 Manos Perros, PhD, Head of Infectious Diseases at AstraZeneca
 Trevor Moody, Managing Director of MH Carnegie & Company and President of TM Strategic Advisors
 David Miller, Portfolio Manager at Alpine BioVentures

Creativity in looking outside of traditional VC investments was a key theme brought up throughout the hour-long panel discussion. Bencich first stressed the importance of being creative in today’s current environment, explaining how Integrated Diagnostics looked at venture loans in addition to equity capital while securing its series B funding. Dr. Larson and Dr. Moody agreed strongly with this need for creativity, with Dr. Larson sharing with the audience his success in raising funding purely from angel investors, and Dr. Moody discussing the importance of non-dilutive and non-traditional funding sources.

The focus of the discussions shifted to the topic of the investments available from big pharma and biotech, with Dr. Perros encouraging companies to pursue novel ideas that big pharma would be unable to pursue themselves. Many of the panelists encouraged talking to public investors and potential acquirers early and often, with Dr. Perros explaining that it is more likely to find beneficial investment opportunities when communicating with investors early, while acquisition becomes more likely later. However, the panelists cautioned against licensing away too much of a company’s intellectual property, in order to ensure that the company retains value towards a future acquisition or IPO.

The greater success of therapeutic-focused biotechs over medtechs in recent years was discussed, which Miller attributed in part to improved clarity in the legislative pathway to drug approval, as well as great advances in science in recent years. On a positive note, Dr. Moody suggested that medtechs are now communicating better with the FDA, while Dr. Larson praised the high level of innovation that is currently emerging from academia.

In discussing what investors look for in a management team, the panelists touted the appeal of the “rock star”-type CEOs, but felt that great teams can also be assembled together, with the recent increased intermixing between scientists and entrepreneurs benefiting that process.

During the closing remarks, the panelists encouraged young entrepreneurs to become as convincing as possible in generating impressive data and/or prototypes, and in demonstrating strong economic rationale and value to investors. Above all, the panel encouraged young entrepreneurs to persevere and simply keep plugging away.


The Doctor is On-line: How healthcare and technology are coming together to change the face of how we think about being well and being sick


Written by Michael P. Owen

 

"The Doctor is On-line" panel discussion was moderated by Rebecca Norlander, Co-Founder and Chief Executive Officer of Health 123.

 

Panel Members

  • Andrew Litt, MD, Principal, Cornice Health Ventures, LLC; formerly of Dell Healthcare and Life Sciences Services
  • Geoffrey Baker, Interim Chief Marketing Officer / Corporate Development, Edifecs
  • Harjinder Sandhu, PhD, Co-Founder, Twistle, Inc.
  • David Schoolcraft, JD, Attorney, Business Practice Group, Ogden Murphy Wallace, PLLC
  • (Randy Stewart, Product Manager at EveryMove, Inc., was scheduled to be a panel member but was unable to attend the event)

Norlander started the discussion by introducing herself, stating her company, Health123, provides collaborative technology solutions to drive patient engagement to improve chronic condition care and overall prevention. Norlander asked each panelist to introduce themselves and answer the question, "What does technology and healthcare together mean to yourself or to your company?"

 

Lift stated that his former job as Chief Medical Officer for Dell, a company that has a huge healthcare service, gave him a unique perspective. One of the limitations of individuals who work in healthcare is they rarely work outside of the field. Every industry other than healthcare has been dramatically transformed by increased access to information, the use of data and the use of communication technology. Disruptive change in healthcare will occur over the next five to ten years.

 

Baker said he started in healthcare in Southern California with large, integrated delivery networks. In the 1990s, there were quality issues with healthcare and re-occurring conditions. What Baker sees as very different today, compared to 10 to 15 years ago, is the ability to take processes of insurance companies, payers, and government and then extend those processes through cloud technologies using traditional infrastructures. Baker sees Fitbit and the wearable device market as its own universe: personalized wellness. We are starting to see integration of that wellness with insurance data, healthcare and benefits; especially on the self-insured side.

 

Sandhu said he is a computer scientist and first entered healthcare 15 years ago in a start-up company sold to Nuance Communications. His current company, Twistle, is a new start-up for patient engagement with a view toward machine learning within the context of patients communicating with physicians, resulting in better patient care and more efficient use of physician's time. Sandhu thinks a big revolution in healthcare is coming with something beyond data analytics: meaningful application of artificial intelligence software. Speech recognition did not revolutionize healthcare. Speech recognition can only help with transcription. Speech recognition is poor at understanding the intent of what a physician says in a report. The next revolution, artificial intelligence systems providing meaningful assistance in clinical care, is very close to starting. Eventually artificial intelligence systems will supplant physicians in many instances in healthcare.

 

When Schoolcraft started his introduction by saying, "I am a health information technology lawyer and I am here to help," the audience laughed. Schoolcraft said he focuses on strategy, helping large, Old World institutions get a return on investment. Hundreds of millions, or even billions, have been invested in healthcare information technology systems, some of which were developed in the 1960s. Schoolcraft also said he is helping the companies who will disrupt a hospital-focused healthcare system that has been developed over the past 100 years.

 

Norlander continued the discussion by asking, "What is data going to do to revolutionize healthcare?" Data can create business efficiencies. Norlander suggested using the term consumer instead of patient because people do not like to be called patients unless something is wrong with them. Norlander also asked, "What can data do for me, such as using wearables and the way we present data?"

 

Sandhu responded to Norlander's questions by saying there are two real applications for data. One used now in healthcare settings is what Sandhu considers analytics; massive amounts of data and electronic healthcare records about patients regarding their diagnoses. According to Sandhu, a more interesting application of data is to combine profiles of patients, treatments and outcomes. This will permit training of computer systems to learn and identify which treatment plans are most effective for particular segments of patients. Sandhu suggested computer system learning could permit this scenario: A patient with a particular profile will have a predicted outcome if he or she goes through a particular treatment.

 

Schoolcraft added the public forum is focused on health insurance. The Affordable Care Act (ACA) is changing payment models over time. At least ten years will be required for this process. These models often use the phrase, "volume to value," to describe the idea of keeping a patient out of the hospital instead of paying for the next test. Schoolcraft explained one of the reasons the managed care model of the 1990s failed is because good data supporting that model did not exist.

 

Litt stated the data regarding what happens outside of hospitals and the clinical environment needs to be brought back into the clinical world. Most of our health, not healthcare, happens when we are not in the doctor's office or hospital. We need data on that part of our lives. Simple things that can be monitored remotely, such as getting patients to take medication and watch their weight, can help prevent patients being re-admitted to hospitals. Litt mentioned 50 percent of Fitbits and Jawbones are no longer used within three months of being purchased. Wearables are not changing healthcare because they are not helping the people who really need them, such as people who are 50 pounds overweight and never get out of their chair every day. Focus should be placed on consumers who really need those devices and not just those who are in shape already.

 

Norlander then asked Baker to address Litt with the questions, "What do you think of wearables? How will wearables change things and how are we to convince people to use them for more than three months?"

 

Baker responded with the question, "How do I change behavior?" Baker also asked, "Where is the intersection of gamification and benefits and taking care of my responsibility for my health?" Baker predicts differentials around insurance costs, incentives to maintain statistics such as BMI, A1C and cholesterol levels. Baker said gamification can be very powerful, especially when it starts to hurt with paying out of pocket. This situation gets very controversial when employers start doing something about that.

 

Norlander next addressed Schoolcraft and asked, "As the resident lawyer on this panel, there are interesting things coming with devices to hold people accountable. How are we going to create incentives around the consumer? Where does that get started in today's notion of privacy, with regards to monitoring and incentives?"

 

Schoolcraft responded by stating some of the incentives come from individuals who are higher risks. Changes are coming to employer-provided plans. There is no doubt on the "creepy factor" having a health plan that has access to more aspects of our personal lives, but it is going to happen. Schoolcraft mentioned we make those trade-offs all the time with consumer data. Insurance companies believe their job is not to sit and pay the next bill, but instead to figure out how to keep patients out of the hospital. Patients need to look at insurance companies as partners in health to understand what things will keep them healthier and what services they are going to get a return on. If insurers do it right, we are going to see a move towards people being very willing to work with their healthcare insurer to provide that data so they can get the best of research in helping them transform behavior.

 

Norlander asked Sandhu to comment on what Schoolcraft mentioned regarding feeling about healthcare data-is gathering technology creepy and invasive? Norlander mentioned people who grew up with Facebook put all of their data, including when they brush their teeth, on-line for everyone to observe. Norlander then asked, "What is that going to do to technology in the healthcare industry? How is that going to move us forward or not?"

 

Sandhu started his reply by stating that we are in a disconnected state right now. Wearable devices are generating data. Many patients want that data to be used for something. In reality the amount of data that is being generated will be so vast there is going to be no human that can look at it and do anything meaningful with it. Eventually we need to have data generated from wearables consolidated with data generated in the clinical environment. Sandhu added patients will get comfortable with their data being used for clinical purposes much more rapidly than getting used to the idea their data is being used on Facebook for better marketing. We also need to figure out the ideas of ownership and retention of that data and where that data will reside.

 

Litt joined this conversation by stating the issue is data privacy and asking, "Who owns the data?" To people who are under 30 years of age, they are fine with their financial data, shopping data and even very personal data being on-line, however they do not want their healthcare data on-line. Litt discussed the reverse situation, describing a cancer project he performed. Parents of children with a rare tumor were asked their opinions if the healthcare data of their kids was put on-line to help their children get better treatment. Most of the parents said they did not care and told the doctors, "Just save my kid." Litt mentioned he saw a survey that listed 50 to 60 percent of people would not go to a hospital if they thought that facility could not maintain privacy of their data. If there was a breach of data from that hospital, 87 percent of the people in that survey thought the Chief Executive Officer, not the Chief Information Officer, should lose his or her job.

 

Norlander continued the discussion on data, stating that everyone on the panel had mentioned incentives. If there are financial incentives, people might be willing to share their data. Norlander used the example of taking 10,000 steps a day to get a break on insurance or get extra money in a health savings account. Norlander asked, "What are some ways we can use incentives? How do we think of incentives from a usability perspective to start getting us as a population more interested in using that data in a reasonable fashion?" Norlander stated she was not going to define the term "reasonable" at that time, suggesting the panel members could give their own definitions.

 

Baker described the time he was an investor in a software company that developed a methodology allowing managers to track employee accomplishments each week. Community and social commitment were shown to be powerful incentives. Starbucks gift cards or quarterly bonuses were motivators while year-end bonuses were not. Stick-type healthcare models use a commitment model to log a community of other patients that can involve doctors, friends, relatives and parents to affect weight loss. Publication on leaderboards results in a community effect. There is an incentive to win and compete because social effects are powerful. Norlander stated leaderboards and social sharing work well for those who are already close to being healthy. She asked, "How can you use social contracts and incentives, positive and negative incentives, to motivate the folks who most need it?"

 

Sandhu responded by saying  we have to find meaningful uses of the data we are collecting before we actually think of about incentivizing collection of that data. Sandhu said most of the physicians his company works with say the broadest healthcare will come from behavioral changes. That is where incentives need to come in. Gamification of healthcare and incentives from insurers will be important. Progress should be made on keeping patients away from needing to use healthcare services.

 

Norlander mentioned her start-up focuses on initiatives. One observation found in its usability studies is that many people compare their small achievements to individuals who run Ironman triathlons and bike to work each day. Incentives need to be developed to cover the population that exists now. We have to appeal to the things that matter to the people we are treating. A challenge platform focused on just getting more steps or running your first 5-kilometer race will not necessarily fit everyone.

 

Norlander asked, "Instead, if I need to make a behavior change to whom do I feel most accountable to make that change? If it is my family, can I do something social?" A physician telling a patient who is 50 pounds overweight should ask how the two of them can change that together. Humans are a difficult problem to solve for.

 

Litt responded by saying we have to tailor the needs of consumers in healthcare, an industry that tends to think within its own isolated world. There are many recent studies looking at non-healthcare effects on healthcare including poverty and challenging income situations. Many people in this country are continuing to decide each month whether to pay their rent or get their medications. Litt added many organizations are starting to invest in social networking and other social support services that are not healthcare-related, but are more socially-economically related. There have been incredible benefits documented on the healthcare side with these programs.

 

Schoolcraft stated we talk about Fitbits and gamification and try to get triathletes to go a little harder. Schoolcraft suggested individuals with multiple chronic conditions and mental problems are a big problem in healthcare. The healthcare industry needs to figure out how to get treatment to them and keep them out of the emergency room. Schoolcraft added there has been a massive expansion of Medicaid in Washington State. This is better than having these people completely uninsured. We need to provide better for these folks at much lower costs. This is where Schoolcraft wants to see some of the tools being discussed put to the test.

 

Baker added there are very interesting disruptive service models for primary care, using a population-based approach where social workers and other individuals go out into the field, moving furniture around and having air conditioners installed. We need to look at social demographics or economic circumstances to prevent someone from getting hurt again. The fee-for-service model needs to move toward a global-based model. Baker also mentioned taking care of those very large populations with the primary care shortage we have under the current healthcare system is not going to work.

 

Sandhu replied by saying most of the interesting things in healthcare occur outside of the context of a physician's office. Sandhu mentioned he is constantly surprised by how much faxing occurs between physician offices. Most people would think a simple thing like sharing data in electronic format would be a "no-brainer." Incentives are needed for hospitals and healthcare systems to change the way they think about patient engagement and care. Patients are involved because their own health is at stake, therefore they will use devices and take advantage of new ways of getting care.

 

Schoolcraft insisted that none of this will happen until there are standards for clinical data in healthcare. There are still situations where one health system is on a proprietary system that does not "play nicely with others."

  

Norlander turned to the audience for questions. The first audience member said data standards are not the issue because you can transform data. We will get the right technology information if we get the right framework for people to make money. Prevention is a multi-year payback model. Known studies have shown if a consumer does more in the short-run he or she needs to see the outcome in the long-run. There is no point in paying for behavioral change in year 1 if somebody else will get benefits in years 2 through 8. The audience member then asked the question, "What would you do differently to allow us to have an incentive framework that would unlock all of this innovation every other industry is doing when they have gone to market?" Norlander rephrased the question by asking the panel, "Incentive framework. How to change that model instead of data standards?”

 

Litt suggested the only thing to align incentives completely is to have a single-payer system. As long as we have an employer-based system, we are going to be stuck with this shorter-term perspective. Lift said he thinks shifting from volume to value is some way of encouraging patients/consumers to be more getting responsible for the cost of care and changing their behavior. Litt added most provider organizations live in two worlds, receiving revenue in the old, fee-for-service world where volume is good, and the new, value-based world with those incentives. Doctors do not e-mail their patients because they do not get paid for it. Baker agreed with Litt's idea about a future single-payer system. The issue of long-term investments leads to portable benefits. The faster we can move to portable benefits, independent of employers, the better for society. This idea will permit establishment of a long-term record enabling the orchestration and machine learning the panel mentioned. Baker suggested that until we get portable benefits, there is really no incentive for all of us. Baker feels the ACA starts that process. Although a single-payer system is far off, we will see portability.

 

Norlander next asked Sandhu to explain his opinion that “incentives are not completely aligned yet for providers to move to a higher touch model using technology.” Sandhu responded by saying we are not seeing that situation yet; it is more a prediction. We are lacking long-term impacts of data-driven decisions. We are not leveraging data. Sandhu explained he has been working heavily in on-line indication, with one instance where 70 percent of physician communication is done on-line versus in-person. What has not been proven yet, because the data does not yet exist, is that having most patients on-line is creating a healthier population. Seeing real, meaningful outcomes to a healthy population will only come if we start better leveraging data.

 

The second audience member addressed the panel, mentioning the democratization of data over the last generation. There is so much information in every aspect of our lives; should there be a standard to the way physicians communicate with each other? The audience member finished his comments with a personal example, explaining he has been trying to transfer his mother's medical records from one very well-established facility to another very-well established facility for two weeks.

 

Schoolcraft suggested we have the capability of doing this. We are still in a system that evolved in a fee-for-service system built around hospitals. Applying a global approach to healthcare and incentivizing long-term will have faxes and many other obstacles disappear. Litt added there needs to be more focus on interoperability, the ability of key systems to talk to each other, and prove that can occur. Sandhu mentioned hospitals view data of patients as belonging them, giving them a competitive advantage and they are reluctant to share that data. In his experience, because meaningful use has been pushing standards, electronic healthcare systems are able to share data but not as far as we can do. Baker stated we need to get to the "last mile," the physician's desktop or the physician's scheduling system. Patient-physician workflow can be affected through incremental change via existing infrastructure like clearinghouses. Make incremental changes to change that behavior. Incentives will make that change occur faster. The faster we can affect that change in workflow, the faster we can see the fax machine go away.

 

The third audience member made several points. Illness presents a crisis. People come out of crisis then get into learning how to manage. When they do not cure themselves they go through grief then try to live well. Crisis, grief and fear impact how we make decisions. Fear creates stress. Stress is to 21st century medicine as disease was to the 20th century. Stress induces gene expression, affects the immune system and affects behaviors such as whether you want to get out of couch or not. The speaker added he faxes not because he is incentivized; rather, the systems for healthcare information exchange do not work well yet.

 

The fourth audience member asked, "What can we do with data to influence the food industry? We are talking about keeping people healthy, the Fitbit and how many steps. What about what people are eating, what they are being offered, how we are addicting our children to high fat, high sugar content food at a very early age; similar obstacles to healthy lifestyles? The audience member also mentioned patients with multiple chronic diseases and mental health issues who often end up in an emergency room and even jailed. They are treated, become stable, released, nobody catches them and the cycle starts all over again. The speaker addressed an earlier point by stating, "We need to think beyond our healthcare-centric view." Norlander asked the panel, "Anyone want to comment on food as a gateway addictive drug?"

 

Sandhu responded by stating in the context of data we do not know what people are eating. We might see apps or wearables that monitor what people are eating. This will give data to tell you eating at McDonald's seven days a week is not good for you. Currently, that statement is antidotal. Norlander suggested the food industry has that data based on the relatively extreme levels of sugar, salt and fat from many food providers. If we think hospitals are not going to share data certainly those companies will not either.

 

The fifth audience member asked, "Regarding all this data generation and responsibility for oneself, will we just grab something and tell patients what to do?" Norlander rephrased the question, "Data as letting go of responsibility versus creating responsibility?"

 

Schoolcraft used his mother as an example. When she went to the physician, you did what the doctor said and did not ask questions. Now physicians will gather data and show patients images and reports. There can also be patients who are very engaged in their own care, showing up at physician offices with large amounts of research. Schoolcraft said he is seeing this opposite situation with the explosion of digital care, patients wanting more information. They also want to interact with other patients to learn what care and treatment plans are working.

 

Norlander concluded the discussion with several important points. The key is making data usable by people. If my physician gives me pages and pages of data about what is going on in my body, that does not mean anything to me. Physicians need to create visuals to help patients understand the things they need to do. We need to create a sense of correlation and causation in consumers so we can actually feel we are doing something about the data in front of us. Today technology is focused on getting the data and not actually making it into something people can really use, which is the next step. Norlander finished by saying, "Those of you with start-ups, that area is a great place to engage and figure out."


Understanding Global Health Market Opportunities

Written by Graciela Matrajt | University of Washington

 

The panel discussion “Understanding global health market opportunities: reaching for the greater good can help you go global” was moderated by Lisa Cohen, Director of the Washington Global Health Alliance.

 

Panel Members:

The goal of the panel was to inspire the audience to consider investing in underrepresented countries and help the most vulnerable and under-served populations in the world. Moderator Lisa Cohen, of Washington Global Health Alliance, first asked panelists why people should consider investing in underrepresented countries.

 

Jennifer Dent, of BIO Ventures for Global Health (BVGH), explained that investors and companies couldn’t ignore these countries because they have become key markets. They are fast growing countries expected to grow 3-6% in the next few years. Investing in growing countries is always a great business opportunity. Dent cited the example of Nigeria, who has half of the population of the US and has become a very wealthy country. Dent said that the seven fastest growing economies in the world are in Africa.

 

Cohen next asked Jerome Zeldis, of Celgene, to explain why his company is already investing in these countries. Zeldis said that Celgene is not a pharmaceutical company; they develop libraries of compounds. In 2009 they decided to include in their libraries information on neglected diseases found in developing countries. They built a library with over 50,000 compounds and sent the information to a variety of institutions to test the compounds against malaria, Chagas, tuberculosis and other diseases carried by bugs. They found that some of the compounds that were already being used for other diseases were also useful against some of these bug-transmitted diseases. They observed that these compounds are not disease-unique. Already existing drugs could be used against new diseases and Celgene would make revenue with them. Zeldis said that a percentage of the revenue comes back to their global health division to continue testing new compounds against other diseases. Ed Yu, of PWC, added that, to succeed in global health issues, you need to have capital and meaningful results. Money is not enough. In fact, between 2005-2012 the return shrank 12%. Yu explained that it is hard to fund global health; one of the main reasons is that fundamental science does not interest many people nowadays.

 

Then Cohen asked what a scientist looks for in a corporate partner. Guy Palmer, a scientist at WSU, explained that scientists expect a partner will hold respect for the primary mission of the institution in which they perform their research. “We look for curious partners that have a sense of social service and innovation to improve things” said Palmer. Maurizio Vecchione, of Intellectual Ventures, added that global health is a very interesting market that involves philanthropists. Currently, most of the capital is coming from private donors, a source of venture capital that is not looking for a return. IV for example, looks for a good, efficacious strategy to implement solutions to global health problems. IV is deploying efforts specifically for the 75 poorest countries in the world.

 

Cohen next asked what the challenges of these partnerships are. Dent responded that new financial models should include philanthropists but also the countries’ ministers of finance, and together they should engage to fund some of the programs in their countries. She said that to engage a company you need to make a profitable system where the employees would want their products to help patients. For that, she said, you need to approach companies with a small plan to participate in global health, and they will want to get involved.

 

Cohen asked Yu if he had an example of a company engaging in global health. Yu explained that some companies need to validate their products through clinical trials and those are hard to perform in the US. “We have a client doing the clinical trial in India; they can have a rapid result and validate their technology” he said.

 

Cohen then asked Palmer how to choose where to work. Palmer explained that they look for a population that will be at the same time partners and users. In short, the community needs to be involved and engaged for the partnership to succeed.

 

Cohen asked Zeldis how his company first got involved in global health. Zeldis explained that in 2009, he felt that the whole company wanted to be involved in innovation. When he suggested starting a global health program, he received very positive messages from everyone; they all found the idea wonderful. Zeldis added that Celgene has advanced because everyone, including the CEO, supports the global health program. Employees feel good and are enthusiastic about the work.

 
Cohen then asked Vecchione what he expects the partners to bring to the table. Vecchione responded that money is not the issue. For him the problem is not making something cheap, but rather something useful for the community they are trying to help; something that will be relevant to the local culture. He said that Bill Gates predicted that in 20 years there won’t be poor countries anymore. Vecchione thinks that at present, there is an economical opportunity. The partners need to show that their technology is appropriate for the country they want to help. For example, none of the top five killing diseases in the world are relevant to the US. “You have to pick your problems and see how your technology can be used to solve them in the context of the countries where those problems exist” he said. For example, a technology needs to be autonomous because in many of those countries there are not enough doctors or nurses to use them. Vecchione added that all the data they use to determine the needs of the developing world come from the Institute of Health Metrics and Evaluation. This is open-source scientific validated data. However, in most of these countries, scientific validated data is not available. Most data is provided verbally and scientists and healthcare providers have to rely on that. You also have to realize the logistical issues. Africa is a huge continent with the infrastructure of the European Middle Ages. Delivering perishable vaccines in remote areas is still a major challenge.

 

Then Cohen asked Palmer what investors need to consider regarding cultural issues. Palmer said that investors need to make sure they understand the priorities of the community where they want to invest. “Share the metrics with the community; they need to know what is going on. Work around the daily priorities of people,” recommended Palmer.

 

Dent then summarized the take-home messages. Scientists and investors need to find new ways to approach the diseases that are neglected in developing countries, and they also have to think in terms of solutions to deliver in remote areas. “Be innovative, create bright technologies” she recommended. She also added that investors need to be flexible and work within the countries’ culture. “Do not try to establish a healthcare system like the one in the US in Nigeria” she stated. “Use their platforms, their infrastructure”. Kenya, for example, doesn’t have enough physicians, and parents are more likely to trust their kids’ teachers than some foreigner bringing in vaccines. “You need to work within that system” she finalized. Vecchione agreed with Dent and added that the technology needs to be effective and address the challenges within the established culture. Palmer added that investors need to figure who wants to adopt their technology and why they would do so. Zeldis mentioned an example that Celgene encountered some years ago. He said that in Nepal they don’t practice medicine in the same way as the occidental world does, so when Celgene sent treatments to Nepal, they were ineffective.

 

Vecchione reminded the audience that some common global diseases are treated as emergencies in the US. For example, some time ago there was an outburst of insecticide-resistant Malaria mosquitos in Florida and other states. This brought to light that the techniques we have in the US and Europe to control those mosquitos do not work anymore in Africa, where they are becoming resistant. Palmer mentioned that there is a need to find new antibiotics and understand how they work more effectively and how to fight the transmission resistance. “These questions have tremendous room for innovation” he said.

 

Then Cohen opened up the discussion to the public. Someone asked how interesting it would be to find a way to diagnose autism at age 0. Is this relevant to the developing world?  Zeldis responded that mental diseases are actually very relevant because they are also an important issue in these countries. The major problem is that they are very expensive to research because they require lifetime treatment.

 

Another person from the public said that vascular diseases are the number one mortality cause worldwide. He wondered whether there is a misalignment in research. For example, there is more diabetes in India than in the US. Cohen responded that indeed, it is important to work on global-local technology, to help solve local issues. Vecchione added that the world is flattening and infectious diseases are expected to be eradicated, or at least be under control, in the next 20 years, and cardiovascular and mental diseases will become more relevant. Zeldis said that the UN passed a resolution (valid until 2026) to approach some non-infectious diseases that are becoming increasingly important. Palmer said that although “non-communal” diseases are related to family and society, they are still as communal as infectious diseases are, and that a drug to treat an infectious disease might be also effective to treat a non-communal disease. “You have to stay open-minded,” he suggested.

 

Finally, Dent added that the system needs to be self-sustaining. The technology or innovation needs to be as efficacious as it is profitable. Cohen ended the panel discussion by saying that she hopes that the public sees global health as an investment opportunity, and she encourages all to share their innovations. The secrets for success rely on working with the community and addressing people’s needs through the country’s systems and infrastructure and, especially, through the culture.

 


Seismic Shifts in Healthcare Mean New Expectations for Innovation: Is Your Organization Prepared?


Written by 
Ellen Kurek, ELS | High-Integrity Communications

The Seismic Shifts panel was moderated by Lee Huntsman, PhD, professor of bioengineering and President Emeritus of the University of Washington.

Panel Members:

 Dave Chase, Senior Vice President, WebMD; Former CEO and Co-founder, Avado 
 Peter Neupert, Operating Partner, Health Evolution Partners; former VP, Health Solutions Group, Microsoft
 Helen Routh, PhD, Senior Vice President, Strategy & Innovations, Philips Healthcare

To find a solution, you must first understand the problem. Moderator Lee Huntsman launched this panel discussion by asking “What are the changes and challenges in healthcare today?”

Helen Routh of Philips Healthcare attributed the problem to an aging population whose cost of care is hard to manage. She then cited China’s population as an example. “We can’t only solve this problem for the United States,” she stressed. “We must develop a solution that can be transferred to other countries as well.” David Chase of WebMD noted that, although hospitals have been creating a market for high-cost procedures, consumerism has increased in response to decreasing insurance coverage. 

Peter Neupert of Health Evolution Partners said the main issue is the value we get for our healthcare spending. For example, Neupert noted that one-third of all healthcare spending is wasted, and central government agencies like Medicare set the rules and prices. “Right now the conversation is about access, but unless we solve the value equation of outcomes equal cost over time, we’re toast,” Neupert said. “We have the wrong feedback loops in place. In other sectors of the economy, people vote with their feet, and the right thing happens through trial and error. That approach doesn’t work so well in healthcare.” 

According to Dr. Huntsman, “We’re in a season of trial and error.” In support of this assertion, he cited such trends as the creation of more capitated systems, the “guerilla war” against fee for service, and the “huge movement” towards wellness in corporations. He also cited market segmentation experiments like the ongoing one at the Cleveland Clinic, which is fast becoming “the cardiac factory of America,” and noted that companies like Boeing have been signing up for their services. And he added that other providers are slicing the market horizontally with primary care segmentation. He then asked the panel to give their opinion about these and similar experiments and whether any inferences can be drawn from them.

“Consolidation is the most interesting development,” Helen Routh replied. “Providers must scale up to have enough patients to do a trial intervention in which trial and error will work. We need to do behavior change and connect the data. The trick is getting enough patients to be able to identify the 5% that cost the most so you can justify the cost of the program and change the provision of care. Scale is crucial.”

According to David Chase, to get behavior change, you need health coaches. And you must replace legacy healthcare IT systems with off-the-shelf systems to substantially reduce hospital stay and lower costs. “And now that unions have had costs pushed onto them, they’re ready to address cost,” he added. 

Although companies are often worried about their competitor across town or some behemoth like Microsoft, he continued, they more typically experience death by a thousand cuts. For instance, he noted that the Cleveland Clinic is slicing out market share bit by bit. 

Peter Neupert responded that the key question is “Are we in a framework where it’s systematically going to get better?” He then gave as an example the response to his 2008 speech to healthcare providers on the use of home glucometers to improve care. “They said ‘We do this already, but we make less money. So we can’t afford to do this.’” Such results have led Neupert to conclude that “Pilot studies don’t scale up to a sustainable business or lead to positive feedback loops.” 

Neupert added, “As long as people think healthcare is free, we’re screwed. My objective is to get people to understand that healthcare is not free. To do that, we must couple systems and incentives with desired outcomes.”

Lee Huntsman then predicted that, under current conditions, the most likely outcome is healthcare paralysis and demonization of technology. But he added that another possibility is some change, but at glacial speed because, in a confusing environment, the default strategy is “Stick with what you know.” 

In the face of unrelenting pressure on cost, the sweet spot, in Dr. Huntsman’s view, will be helping healthcare providers count costs and run their businesses better. He added that some risk-takers may say, “Let’s swing for the fences! Go after big problems with big solutions.” Such an approach could result in, for example, the widespread use of a wearable dialysis unit that could transform the healthcare industry, he said. 

He then posed another question for the panel: “I’m an innovator. Is it clear what I should do in this foggy environment?”

In his response, David Chase advised, “There’s only opportunity when there’s ambiguity, so you must make bets to win.” He added that because the shift to value is inexorable, the challenge is to find out where that’s happening so you can build big off a small foundation. By way of example, he cited Omada Health, a company with a focus on diabetes who went to employers, the ultimate purchasers, because Omada recognized their decision-making process was shorter than that of current health systems. And a subset of those employers were healthcare providers who said, “Let’s try this out on our healthcare employees.” That trial yielded solid evidence for Omada’s diabetes protocol. And by bypassing the regular route, they short-cut the process, Mr. Chase added. 

In answer to his own question, Dr. Huntsman advised “Don’t be dissuaded by lack of clarity. Get to know your niche market very well.” 

Peter Neupert replied that many of the opportunities for innovation are in services. “All the low-hanging fruit gets collected by being smarter about how you deliver services. Don’t use a doctor if you don’t need to. But that requires a change in mindset. That’s where I would go,” he said.

“You have to have a way of measuring outcome improvements,” Helen Routh advised. “And you must assess both clinical and business outcome improvements.” 

Dr. Huntsman then asked the panel how they would advise investors by posing the question, “If I gave you a billion dollars, what would you do with it?” 

“I’d put my billion on elements that enable collaboration,” Helen Routh replied. “Collaboration is the only way to solve the problem. But you can’t do that without core clinical and technical depth.”

“You can’t push a rope up hill,” quipped Peter Neupert. “I’d go to the United Kingdom and build a commissioning trust so I could control how I paid hospitals and make a bit of money.”

David Chase cited the example of an innovator that got a long-term contract from the German government to care for the country’s schizophrenic population. “It was a bold step,” he commented. “There’s an opportunity to dive deep in that, but there are lots of complications.” 

Dr. Huntsman then invited questions from the audience. In response, Don Foster, VP of the Novo Nordisk Inflammation Research Center, cited Clayton Christensen’s book The Innovator’s Dilemma, which according to Foster describes industries that have reached the point that healthcare has reached now. He noted that in those industries, most innovators develop sustaining innovations ― those that are more complex and expensive than the state of the art. But such sustaining innovators are almost always confronted by someone with a disruptive innovation ― something simpler and cheaper that makes no sense to big stakeholders. “So who are the disruptors in healthcare?” Foster asked.

According to Peter Neupert, primary care and medical research centers have some disruptors in mini-clinics, but that doesn’t change the system as a whole. David Chase noted that in some geographic areas, employers have pooled healthcare funds to create a new environment. “They said, ‘We don’t like buying that, we want to buy this. We’re inviting new models.’ Pulling this off could ripple through the system,” he added. 

Helen Routh provided the panel’s parting comment: “It’s even more important to keep innovating in this environment than in the past. We need to focus on services, data problems, disease eradication, and changing therapy significantly. And we need to do it by making connections and forming partnerships.”

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