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If you followed the news, you know that the US health system has many, many inefficiencies. Some have gone so far as to state that health care in the United States does not work well. Although this may be excessively dramatic for political purposes, many of the arguments presented are entirely valid. With recent changes to US legislation, the healthcare market is slowly moving towards result-based pricing, a trend observed in many of the world's major health systems. But moving the entire financial base of an ecosystem of decades of complex institutions is not an easy task, it requires a little innovation. Digipharm it is such an innovative company that tries to exploit blockchain technology to eliminate inefficiencies in the health economy. Recently we had the opportunity to speak with Digipharm's founder and CEO, Ahmed Abdalla.
Mohammad Saleh, Medgadget: Can you tell us about your background and how you became part of Digipharm?
Ahmed Abdulla, Digipharm: My background is in the health sector – particularly in the health economy. I worked on the payer side of things, reviewing various contributions from payers to the national health service in the UK. I then moved on to the pharmaceutical industry, head of the global health care team for an anti-cancer drug in Roche. This was based in Switzerland. In my career so far, I have been involved in or supervised over 50 international reimbursement requests from both the payer and the producer side.
What we have observed is a trend in the health sector towards results-based pricing, results-based contracts and patient access schemes. Although many traders and pharmaceutical companies offer it, the infrastructure to support the movement towards these types of payments has been essentially very limited. There is a huge administrative burden that really nullifies all the benefits of switching to this type of payment approach. So, I decided to start Digipharm essentially to solve the problems we see preventing the industry from switching to these different payment facilities. We tried to find out what was the best way to do it. It turns out that blockchain could provide an excellent vehicle to allow payment for your health care based on the results, not on the number of times you see a doctor or the number of medications you take. To do this successfully, we needed to create a medical information infrastructure that all parties would trust.
Medgadget: Give our readers an overview of what Digipharm is. What is your mission and how are you working to achieve it?
Abdulla: Our mission is to be the provider of third-party solutions that is found among all the major stakeholders in the health economy. We want to facilitate innovative pricing solutions and value-based pricing. We have built our platform in cooperation with SwissCOM, the Swiss telecommunications provider. We are now discussing with specific organizations that are interested in our solution, discussing pilot projects with eight of the top ten pharmaceutical companies in the world (by turnover). We are also working with more than ten international health authorities as well as some of the world's largest insurers.
We understand that this is a fairly sensitive area for pharmaceutical companies and device manufacturers. Price is the thing that they hold in the most confidential way. Clinical data are finally published, but things like price strategies and net costs remain confidential because they really affect their competitiveness.
Medgadget: It may be clearer if you lead our readers through the way health care works right now and what you want it to look like at the end of your job.
Abdulla: Health care spending is currently unsustainable, both for patients and for taxpayers. This is having an effect on the whole industry, where innovation is not substantially rewarded because organizations can not afford to reward them. A lot of money is wasted on treatments and therapies that are not as effective as they should be. Once they go out in clinical settings, the results are very rarely tracked for a given treatment or therapy. So what we are seeing is the mature concept of health care based on value and greater acceptance in the last two years. But at the moment there is no solution that removes administrative burdens and obstacles to its implementation.
What we want to do is open the door to contracts seamlessly, eliminating the need to manually enter the results data from the supplier side. We also want to remove transactional inefficiencies or the need to manually process agreements between the different parties in the health care ecosystem. In general, different groups of patients will have different price agreements based on their characteristics. Currently, this requires dedicated employees to review the results, associate them with certain agreements and then process billing and so on.
We are using smart contracts to create an automated billing system that we hope will remove the administrative and cost burdens associated with this process.
Medgadget: What is the smart contract and how is it used to get a value-based health care model?
Abdulla: Smart contracts are essentially digital representations of physical contracts. Once the conditions of the contract have been stipulated and coded in the platform, they are then interpreted to interpret the relevant data derived from the health information systems that feed these agreements. When certain criteria are met, these intelligent contracts invoke a sort of invoice, notice or payment agreed between the parties. This is all about a blockchain platform. And the beauty of the use of smart contracts no matter how complex the price agreement, the administrative burden does not change. If you do it manually, for example for an anticancer medicine, you may have a price agreement that states that you will pay the full price only if the patient survives for more than six months. Or you can now have an agreement that has additional conditions based on an adverse event of interest or re-hospitalization rates, and so on. Regardless of the number of conditions stipulated within this contract, the administrative burden does not change. If such complex contracts were executed manually, it becomes substantially ineffective.
Medgadget: What would a hospital look like without your solution, compared to what your solution has?
Abdulla: A hospital that would use our platform would be able to enter into these price agreements and customize them for the cohorts of patients they deal with. If, for example, they have a predominantly elderly population and are really concerned about some key performance indicators, they can get agreements with local producers or distributors or suppliers based partially on these indicators and the problems they face in their patient cohorts. The greatest savings on labor and the use of resources to implement these agreements also benefit from this.
Medgadget: How does this solution affect patients' lives?
Abdulla: So, from the patient's side, there are enormous benefits. They will have access to high-cost drugs without having to worry about the cost of things that do not work. Many people have experienced or witnessed having to worry about how to pay for very expensive drugs that are often not completely effective. Very recently, a family member has had to pay many thousands of dollars to get a life-saving treatment because his insurance company has refused to pay for these expensive drugs. This would not be a problem if these drugs were paid based on performance, as the risk is shared by producers and payers. Patients will also benefit from increased competition among manufacturers to create the best drugs and benefit from this business model. They will also benefit from accelerated access to new therapies, because we will save this long negotiation process that takes place during the health technology assessment process. This is when you have exhausting debates on prices, because of uncertainty about data, long-term extrapolation of survival curves and things like that. By rewarding the best therapies, you can also take it faster to patients.
Medgadget: I understand that this is a concern in a broken healthcare system like in the United States. But with other health care systems like Canada or the United Kingdom, many of the life-saving drugs are not paid exaggerated. Why do you think those systems would benefit from your solution?
Abdulla: These are interesting, but what we observe is that patients do not have access to many more recent therapies. New therapies are often rejected because those decisions are based on the cost-effectiveness of treatment. The institutions consider the use of resources, the price of the drug and the clinical efficacy. Clinical trials are becoming increasingly targeted and based on smaller and smaller patient groups. This leads to increased uncertainty about the convenience of therapy in real-world settings. Thus, government agencies can not justify the use of public money to reimburse these expensive therapies and insurers are struggling to manage the risk. However, these limits would not be imposed if these organizations knew that if these therapies did not work, they would not pay for them. Our platform circumvents these current problems by tracking drug success and evaluating the drug based on results. This is happening mainly around the world, but not as much as everyone would want because of the huge administrative burdens and issues related to trust and transparency of performance data.
Medgadget: For me, it seems that pharmaceutical companies do not want to subscribe to this. If you spent more than 10 years developing a drug, you want to sell it at a higher price. Why agree to the risk of lowering the price of their product?
Abdulla: What we know, having worked in this sector, is that the companies themselves are preparing for this payment mechanism. In reality they are really pushing themselves. What damages a pharmaceutical company is the lack of access to the market and the remaining time on patents. They are counterbalancing the potential price decline with the potential to have faster access to markets and a generally expanded market presence.
Medgadget: Are you building your blockchain platform or using something that already exists?
Abdulla: We are using Hyperledger Fabric, a business-level blockchain solution that provides much of the scalability we need. It is also an authorized private blockchain, so users can join a private network only if they receive permission from everyone on the network, as an additional level of security around data that is important for price-sensitive agreements.
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Medgadget: Show me why you decided to create your cryptocurrency.
Abdulla: Basically, we have created a utility token as fuel to power our platform.
For the reimbursement platform, contractors, manufacturers and suppliers will be required to use these tokens to start or execute smart contracts. They will also be required to enroll individual patients on smart contracts, facilitating the process of annexing patients to the pricing and reimbursement contract. We understand that none of the current stakeholders in the health economy will feel comfortable using these tokens, so users will essentially pay a license fee that is stipulated in US dollars and will be converted. in an amount of token. We also hope to use tokens as an incentive method for stakeholders and patients.
Medgadget: Implementing tokens is not essential for the functioning of smart contracts, though. Right?
Abdulla: It is not. But in the future, we would also like to develop our own blockchain network. We understand that there will be volatility inherent in the number of tokens that will be acquired based on the amount in US dollars. Obviously, the pieces help us to raise funds too – we do not hide this fact. We wanted everyone to invest and benefit from a project with a high social impact. The way we see these tokens are credits that allow you to use the software. The number of credits you have may be related to the number of patients on these platforms, the number of running smart contracts or the number of treatments available on our platform.
Medgadget: How dependent is your platform on the health of other cryptocurrencies?
Abdulla: I would not say it is, really. We initially created an Etherium layer federated on the Hyperledger platform. However, in the background we are also working on other blockchain platforms, in order to have fallback options if something happens to a given network.
Medgadget: As we have already seen in Medgadget, things are increasing in the scene of the health killer. Where do you see this field, and Digipharm, in ten years?
Abdulla: I think we will see Digipharm as a pioneer in value-based bargaining space. Ten years are quite long, but we hope to be one of the market leaders as the adoption of our platform becomes more widespread. We are discussing with some of the largest providers of health services and insurance companies globally. It's a very fragmented system everywhere, but it's also a really interesting challenge. There are many organizations trying to work on the integration of health institutions and community care units, and we think these efforts will only help what we want to do.
To learn more about Digipharm, check out their website or watch this webcast from the CEO …
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