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The economic impact of the new health technologies

Updated: Jan 4th, 2022

The guest for this 9th interview on our YouTube channel was Wilson Follador, pharmacist-biochemist, PhD, executive director and senior consultant at Sano-Efiko, professor at Fundação Getúlio Vargas/Escola de Administração de Empresas de São Paulo (FGV/EAESP) and speaker at more than 300 national and international events.

In the conversation with Nilva Bortoleto, Follador spoke about the economic impact of new health technologies, a topic constantly debated among the players in the sector, because along with the possibilities of treatment for various diseases and increase in the patient’s quality of life, there is also the question: how and who will pay for this bill?

“It is a fact that healthcare technologies are getting more and more expensive, and the reason for this is the increasing difficulty of finding a new, disruptive and interesting molecule.”

According to Follador, for both abroad and in Brazil, the scenario is the same; however, in other countries, especially European ones, there are mechanisms that help these costs to be absorbed, which does not occur in Brazil, due to the low health budget (about 9% of the Gross Domestic Product is invested in health). And the reality is: the amount available to treat people is not enough to offer the best technology.

“We’ve been talking a lot these days about individualized treatment – which is fantastic! But we need to be clear that this concept implies having fewer patients using a certain technology, which means less consumption and less return on investment for those who developed it. The result of this is that the company will have to charge higher prices to have a financial return.”

Impact of new technologies for patient, physician and hospitals

According to Follador, patients have a high dependence on the health system, whether public or private, and a fact that needs to be considered is that the country spends on innovative therapies, but most of them are not 100% effective.

Regarding the impacts on doctors, he pointed out that, through their own training, health professionals are always looking to offer the best to their patients. “No doctor wants to deny a technology that can be beneficial for economic reasons. But, on the other hand, he knows that not every patient will have access to this new drug, either through the public health system (SUS), or through private health.”

Follador talked about the impact on hospitals and mentioned the reality experienced in Brazil and in the world. “In several countries, hospital units also feel the economic impacts of new technologies, but the relationship between them and payers is less complex than in Brazil. In European countries, these institutions receive good remuneration for providing good service. In Brazil, the remuneration for exams, fees, among others, is very low, making the promise of reducing hospitalization costs less attractive, for instance – which is linked to many of these new technologies.”

Impacts on payers and society

The specialist spoke about the impacts on the payer, whether in the public or private system. “The payer is nothing more than a manager. In theory, he should be the person who evaluates the technology and wonders if what he’s paying for is the best possible benefit for a given population. But there is a lot of technology to be evaluated. The demand is very high, and it is still up to the professional in charge to balance the accounts. If we’re going to talk about the private sector, it still has a responsibility to make a profit.”

Follador commented on the economic impacts on society as a whole, nothing that he sees in the need for a new social contract, in which it is clear how far it is possible to go when health costs as discussed. “We have to show society how much we can spend so that we can all live longer. In the future, we will all have to think about whether we can really pay more to have the benefits of a new technology, or whether we will be satisfied with what we have.”

When asked whether investments in prevention could help reduce health costs, he recalled that prevention reduces the risk of developing a pathology, but that it will continue to exist. “One of the facets of the health economy problem is that we do not know how to deal with the disease, with finitude. If we have technology that gives us a 1% chance of staying alive for another year, we’re going to cling to it, no matter how much it costs. This is where society, as a whole, has to find a solution. In my opinion, it’s no use investing in a drug that costs millions, but that gives me, in return, little terms of survival.”

Watch the full interview below.

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