Obama’s New Healthcare Proposal: A Precise Vision Or A Political Football

2.4.15 | Forbes

By Steve Brozak

To read the entire article on Forbes, please click here.

When President Obama unveiled his Precision Medicine Initiative, he declared a two-fold challenge. The first was a challenge to advance healthcare technology. The second was directed at his critics to support or work with him on addressing one of the most significant budgets in recent memory. Unfortunately, the latter challenge of cooperation on the overall budget puts the former challenge of a scientific initiative into the realm of simply becoming an unfunded mandate.

With more than three quarters of the Obama presidency completed, both his opponents and supporters entirely agree that he has attempted to make change in healthcare a cornerstone of his legacy. If they are candid, they also will agree that any positive change in healthcare demands a level of innovation that we seldom see.

This is the crux of the disagreement between the two political parties. All sides agree that change needs to be made to our healthcare system to improve the quality of care people receive, to expand the boundaries of modern medicine into new realms, and to hold down, if not bring down, costs. The points of disagreement are what the changes should be and how they should be implemented. The outcome will determine not only what the last two years of the Obama tenure looks like, but also how U.S. healthcare will function and evolve for generations to come.

As modern research and development initiatives go, $215 million for the President’s Precision Medicine Initiative is a small amount and it is divided in descending order of funding among The National Institutes of Health (NIH), The National Cancer Institute, which is a part of the NIH, the FDA  and The Office of the National Coordinator for Health and Information Technology, which are units within the Department of Health and Human Services. Without definitive additional financial support to these organizations, the funding is almost certain to become another series of unfunded mandates versus an innovative blueprint that U.S. healthcare desperately needs.

What becomes apparent when examining this initiative and is even more problematic than its size and fragmentation, is the decline of dollars available for research for over a decade. The budget for the National Institutes of Health has been cut eight of the nine years between 2004 and 2013 by a total of 28 percent in constant 2003 dollars. At the same time, the cost of research has risen, resulting in a severe reduction in the breadth of our national healthcare research.

The Precision Medicine initiative has at its heart an innovative spirit but innovation is much different than people think. While innovation and vision are commonly found buzzwords in most consultants’ reports evaluating a corporation, the truth is that vision and innovation are both rare and initially unwelcome. When Henry Ford was asked what led him to build the automotive giant that still bears his name, he said the public was hungering for faster horses. What they needed, and what he gave them, was reliable, personal, motorized transportation through assembly line manufacturing. Today Ford Motor Company (NYSE: F) continues to be a world leader in automobiles.

At Apple, Inc. (NASDAQ: AAPL) Steve Jobs faced a Board of Directors that demanded short-term earnings-per-share growth. Rather than focusing on quarterly results, he took a long-term view and gave the world devices for personal access to information that fostered unparalleled growth in communications and entertainment, thereby disrupting those industries.

Identifying nascent disruptive technology is always problematic, and there are no easy comparators to disrupters in healthcare. However, innovative companies do exist. Examples that mirror the innovative intent of the Precision Medicine initiative are found in companies such as Ilumina, Inc. (NASDAQ: ILMN), Celldex Therapeutics CLDX -4.8%, Inc. (NASDAQ: CLDX) and Foundation Medicine, Inc. (NASDAQ: FMI).

Ilumina, is working to increase the availability and power of genetic analysis for physicians, while also developing companion diagnostics for new therapies. A companion diagnostic indicates whether a patient’s illness expresses a weakness or characteristic that a therapy can exploit.

Celldex Therapeutics is developing a cancer vaccine for brain cancer patients whose tumor exhibits a certain growth factor. A companion diagnostic would be used to ascertain whether or not a patient would receive benefit from Celldex’s cancer vaccine.

Foundation Medicine is empowering physicians to make better clinical choices by providing comprehensive analysis and information that is specific to individual patients. Oncologists can use the genetic information Foundation Medicine provides to make treatment choices tailored to the analysis.

What these three companies are doing is the very essence of precision medicine – pinpointing patients with genetics that would benefit from targeted therapies and developing targeted therapies that are effective against specific disease variants. The Precision Medicine announcement maybe trying to accelerate efforts like these, but it may fall short of the intended results.

Yesterday’s budget proposal, combined with Friday’s declaration of the Precision Medicine Initiative tries to give us what some experts are asking for, but in the spirit of Henry Ford and Steve Jobs, does it give us what we need? President Obama’s initiative seems more like an infrastructure project than it does a major commitment to ushering in a new scientific age. There’s no question that many of the most important medical breakthroughs were fostered through initial investments made by the U.S. Government, but to be a true investment, at all costs, it cannot be perceived as an unfunded mandate.