Picking up a prescription at the pharmacy is simple enough. But if you’ve ever wondered how that medicine makes its way from the laboratory to the drugstore—and how that impacts what you pay for it—you’re not alone.
In order to help illustrate what goes into that journey, Janssen Pharmaceuticals, part of the Johnson & Johnson family of companies, has just released its 2017 Janssen U.S. Transparency Report.It’s an inside look at the company’s core values and goals, and how it puts them into practice in the United States.
The reason for the report is simple: We all know how complex the U.S. healthcare system is these days, and given this, people are coming to Janssen with questions about its business—including those about out-of-pocket costs for prescription medicines and programs that can help with access and affordability. And company leaders believe it’s crucial to answer questions like these openly and honestly.
To help consumers better understand why the report is worth reading, we’re highlighting five key insights from its pages.
1.
Janssen’s commitment to transparency is stronger than ever.
In 2016, the company released its first-ever U.S. Transparency Report with the intention of increasing transparency around the pricing of medication and other topics related to value and access for patients, consumers, healthcare professionals and policymakers.
In its new 2017 report, Janssen is making even more information available, including new insights and disclosures related to its research and development (R&D) process and how the company invests its resources.
2.
The company has significantly increased its investments in discovering and developing medicines that can have the greatest impact for patients.
Janssen’s first responsibility is to invest in innovation that helps address unmet medical needs and creates differentiated products that can enable people to live longer, healthier and happier lives.
“We are focused on developing transformational medicines in these key areas: cardiovascular and metabolic diseases, pulmonary hypertension, autoimmune and other inflammatory diseases, infectious diseases and vaccines to prevent them, diseases of the brain and cancer,” explains Mathai Mammen, Global Head of Research & Development, Janssen Pharmaceuticals.
In 2017, Janssen spent $7.9 billion—an increase of $0.9 billion over the previous year—to research and develop more than 100 potential medicines in these core disease areas.
To put this into context, the company spent 88% more on R&D than it did on marketing and sales. (These figures do not incorporate information from Actelion Ltd. As a result, they differ from the Johnson & Johnson Form 10-K filing, which discloses a Janssen R&D investment of $8.4 billion—an increase of $1.4 billion from 2016.)
And this significant investment is delivering results for patients.
In the past five years, Janssen has been an industry leader in approvals of novel treatments, with a total of seven new medicines receiving approval by the U.S. Food and Drug Administration (FDA) between 2013 and 2017.
“And that’s what’s critical for us at Janssen—discovering and developing treatments that make a real impact for patients,” says Mammen. “That could mean a medicine that saves or extends a life, prevents a disease from happening, avoids costly hospitalizations or surgeries, or is an easier regimen to maintain than alternative treatments.”
3.
Last year, Janssen’s overall net prices came down in the U.S.
In 2017, Janssen’s average list price increase for medications was in the single-digit percentages.
Discounts and rebates that the company provided to non-patient payers (like insurance companies) and healthcare providers, however, outweighed that modest increase in price.
As a result, the net price of its medications in the U.S. came down.
“Our business was vibrant and strong because of increased use of our medicines, demonstrating the value of our innovations to patients and healthcare providers,” notes Jennifer Taubert, Company Group Chairman, Pharmaceuticals, The Americas, Johnson & Johnson.
Many patients face high out-of-pocket costs, and understanding their health insurance coverage for medicines can sometimes be confusing. We try to simplify the process by showing patients available programs that are most likely to help, given the patient’s coverage and financial situation.
4.
The company works to help patients get access to affordable medicines.
Janssen understands that insurance coverage can be complicated and finding financial assistance can be challenging for patients.
That’s why it has programs like Janssen CarePath, which provides resources to help patients get started on—and stay on—Janssen medicines their healthcare providers prescribe. In 2017, Janssen CarePath helped approximately 610,000 commercially insured patients reduce their out-of-pocket expenses.
“Many patients face high out-of-pocket costs, and understanding their health insurance coverage for medicines can sometimes be confusing,” says Gina Giordano, Director, Patient Access Solutions. “We try to simplify the process by showing patients available programs that are most likely to help, given the patient’s coverage and financial situation.”
Janssen also supports independent foundations through charitable donations that help patients in need get necessary medicines.
5.
Janssen is working to help address how we cover and pay for medical care in the U.S.
It’s no secret that the U.S. healthcare system wastes money on problems like failures in care coordination, administrative complexity, fraud and abuse. By some estimates, system waste accounts for more than 20% of the total cost of healthcare. Meanwhile, many people still cannot afford the care they need.
“Our current system rewards the quantity of care delivered, regardless of the results of that care, so we spend a lot of money on healthcare that may not make a real difference for patients,” says Anastasia G. Daifotis, M.D., Chief Scientific Officer, Janssen North America Pharmaceuticals. “This means we have less money to spend on what does work.”
The new report outlines how the company is taking steps to address some of these inefficiencies and move to a more results-based approach. For instance, they’re working to establish innovative contracting models, also known as value-based contracts, which allow both a health insurer and a pharmaceutical company to share financial risk, with the goal of providing better outcomes for patients at a lower cost of care.
Janssen is also conducting population health research that seeks to address quality and cost challenges in today’s healthcare system.
“We issue this report,” says Taubert, “because we believe open dialogue is essential to developing a more results-based healthcare system that delivers what we all want: greater access to care at a more manageable cost and, most importantly, better health for all.”
