Mark Pauly - Faculty Research in Knowledge@Wharton

Cures for an Industry Crisis: Big Pharma Scrambles to Find New Ways to Develop Drugs Faster

Thu, 10 Feb 2011 09:00:54 EST

Companies are turning to new methods of developing drugs as blockbusters lose patent protection. These models include partnerships with universities and the sharing of once closely guarded warehouses of compounds. A key focus of the research is "translational medicine" -- whose goal is to replace traditional one-size-fits-all drugs with personalized treatments for patients with specific genetic profiles.

Health Care Reform: Not Ready to Be Discharged Yet

Wed, 31 Mar 2010 14:51:19 EST

America's health care reform may be out of the emergency room, but its prognosis remains sketchy. Passage of the historic 2,400-page legislation by no means ended the health care debate, say Wharton experts: It just splintered one massive question mark into a lot of new big ones. As one Wharton professor noted: "The current legislation is going to be in play for a good long time." But he also pointed out that the bill offers new business opportunities in such areas as medical information technology, education and methods of delivery. (Video with transcripts)

So You Want to Live to 100? More of Us Will, and Here Is What Life Might Look Like

Wed, 09 Dec 2009 17:18:52 EST

If your children happened to be born since the year 2000 in developed countries, they will most likely live to be 100, and they will be healthier than elderly people in previous generations, according to a recent article in the medical journal The Lancet. The implications are enormous for everything from retirement planning and health care costs to new models for the workplace and innovative approaches to education. As one Wharton professor says: "This is a demographic revolution the likes of which we have never seen before on earth." What challenges will individuals, organizations and governments confront due to increases in life expectancy that show no signs of slowing down?

Why Improving Global Health Care Is Everyone's Responsibility

Mon, 09 Nov 2009 10:10:20 EST

Throughout the developing world, infectious disease and chronic illnesses confront more than one billion people living in poverty. To make significant strides in global health, governments and for-profit and non-profit businesses must find a way to foster innovative, breakthrough solutions not only to treat illnesses, but also to improve the delivery of health care itself. Nobel Prize winners and global health care experts will be exploring these issues during a Festival of Thinkers panel titled, Future Well-Being: Towards a Healthier World.

Rx for the Pharmaceutical Industry: Focus on Innovation, Not Marketing

Wed, 14 Oct 2009 15:33:51 EST

The good news for the pharmaceutical industry is that, short-term, it may emerge as a winner in the health care reform battle as new customers enter the system and price protections remain in force. The bad news is that while big pharma has used increasingly large megamergers to support its reliance on blockbuster products, it still faces the long-term need to develop fundamentally new business models to cope with its most significant problem -- a failure to come up with new treatments, according to Wharton faculty.

Another Hurdle to Health Care Reform: Too Few General Practice Doctors

Wed, 22 Jul 2009 15:41:58 EST

While the possibility that millions of uninsured Americans might soon have access to health coverage may conjure images of patients stacked up in hospital hallways or waiting for months for an MRI, the most likely stress point in an expanded health care system will involve the family doctor, according to Wharton health care experts and others.

One War We Shouldn't Avoid: A New Approach to Reducing the Cost of Future Catastrophes

Wed, 08 Jul 2009 16:18:09 EST

In 2005, three major hurricanes -- Katrina, Rita and Wilma -- struck the U.S. Gulf Coast area, causing not just death and destruction, but also leading to insurance payments and federal disaster relief of more than $180 billion. Today, say the authors of a new book titled, At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes, the U.S. is even more vulnerable to catastrophic losses. Written by Howard Kunreuther and Erwann Michel-Kerjan, with colleagues Neil Doherty, Martin Grace, Robert Klein and Mark Pauly, At War with the Weather analyzes current thinking about catastrophes and proposes new solutions for reducing loss and providing financial protection against future disasters. Kunreuther, co-director of Wharton's Risk Management and Decision Processes Center, and Michel-Kerjan, the Center's managing director, recently talked to Knowledge@Wharton about their book.

One Way to Lower Health Costs: Pay People to Be Healthy

Wed, 24 Jun 2009 16:27:19 EST

When employers want their employees to live healthier lifestyles -- to lose weight, stop smoking and exercise regularly -- nothing works like cash, according to research led by Wharton faculty. While some may wince at the notion of paying people to do the right thing, the research found that the incentives cost less than the diseases they prevent.

Information Technology: Not a Cure for the High Cost of Health Care

Wed, 10 Jun 2009 17:08:51 EST

Advocates and policymakers often argue or assume that applying a new form of information technology (IT) will save money and improve the quality of health care. But there are some who are not so certain, especially about IT's cost-cutting promise. One Wharton professor argues that IT could actually raise costs because of culture clashes, training, the implementation of the systems and the labor required to maintain the new technology.

Social Security and Medicare: Trying to Tackle Two 800-pound Gorillas

Wed, 13 May 2009 16:53:27 EST

While many people worry about the billions of dollars spent bailing out banks, auto makers and other sectors, shortfalls in Medicare and Social Security are what could ultimately sink efforts to revive the U.S. economy. As 78 million baby boomers begin to retire, funding for the government's two primary old-age security plans grows increasingly precarious, suggest several Wharton faculty. A report released earlier this week by trustees of Social Security and Medicare echoes those concerns.

Katrina, 9/11, Global Recession: Moving Beyond Old Thinking about New Risks

Wed, 18 Feb 2009 17:51:20 EST

Disasters just aren't what they used to be, according to experts at a recent Wharton risk management conference titled, "The Irrational Economist." Indeed, they are a lot worse. With costs adjusted for inflation, all of the 20 most-costly disasters from 1970 through 2007 occurred after 1987, and half came after 2001. One speaker predicted "an accelerating rhythm of large-scale catastrophes" such as financial crises, problems with food and energy, disease pandemics, terrorism and natural disasters.

Dear President-elect Obama: Here's How to Get the Economy out of the Ditch

Wed, 12 Nov 2008 15:57:28 EST

President-elect Barack Obama must lead a nation mired in a worsening recession and burdened by the costs, both financial and human, of two wars and rising debt. Wharton faculty offer some counterintuitive advice: Now may be the time for the government to spend a lot of money.

Avoiding the Tough Issues: The Candidates on Health Care and Entitlements

Wed, 15 Oct 2008 16:48:07 EST

"We were so concerned about the $700 billion in the bailout bill, but nobody is talking seriously about the $12 trillion we need to make Social Security whole and the $65 trillion we need to make Medicare whole," says Wharton professor Olivia Mitchell, referring to issues being debated in the U.S. presidential campaign. Meanwhile, the candidates promise to expand health care coverage without offering details about how they can finance their proposals.

Presidential Candidates Push Health Care Reform, but Who Will Pay?

Wed, 17 Oct 2007 16:23:27 EST

As medical costs escalate and the number of Americans without health insurance continues to rise, the 2008 presidential candidates have responded by putting health care near the top of their agendas. Indeed, many candidates have already laid out detailed programs to address the nation's health care problems. As a result, meaningful change in the system seems likely to occur once a new president takes office. As Mark V. Pauly, Wharton professor of health care systems, notes: "I'm optimistic this time that we'll get something.... There is actually a chance of doing more good than harm, and I wouldn't have said that in some other years."

A Prescription for Healthier Medical Care Decisions: Begin by Defining 'Risk'

Wed, 05 Sep 2007 15:46:23 EST

"Risk" is a term that comes up frequently when people discuss medicine and health: What's my risk of heart attack? Breast cancer? What's my risk of dying from a complication of surgery? Or having a dangerous reaction to a drug? But according to Mark V. Pauly, Wharton professor of health care systems, consumers don't necessarily use that term in the same way that medical and insurance experts do -- which is a potential pitfall that can lead to less than optimal health care decisions and faulty policymaking.

Can Anyone Make Sense -- or Money -- Out of Personal DNA Testing?

Wed, 13 Jun 2007 14:33:58 EST

It seemed only right that James Watson, who co-discovered the structure of DNA with Francis Crick and Rosalind Franklin, was the first to receive a DVD holding the sequence of his own DNA produced by 454 Life Sciences, a division of the Swiss drug giant Roche, and academic researchers. While DNA mapping technology under development at Roche and other companies has the potential to bring the long-awaited era of personalized medicine closer, there are enormous ethical, legal and investment hurdles to building successful business models based on decoding an individual's DNA, according to Wharton faculty and executives in the industry.

In South Africa, Poor Health Can Kill Small Businesses

Wed, 30 May 2007 15:38:15 EST

According to estimates, micro and small businesses contribute almost 50% of South Africa's total employment and 30% of its gross domestic product. Until recently, however, the impact of poor health, and in particular HIV/AIDS, on these enterprises -- ranging in size from single owner-workers to companies with 100 employees -- has been largely overlooked by researchers. A new study by Li-Wei Chao from the University of Pennsylvania's Population Studies Center, Mark V. Pauly, Wharton professor of health care systems, and others examines how owner health determines the fate of small businesses in South Africa, and impacts the larger economy as well.

Efforts Are Growing to Trim the Fat from Employees -- and Employers' Health Care Costs

Wed, 01 Nov 2006 15:04:42 EST

With all the statistics showing how many adults in the United States are obese (30%), how many deaths are caused each year by obesity (365,000) and how bad the problem is (getting worse, not better), it's no surprise that obesity is definitely on employers' radar screens this year. But, Wharton experts and others point out, obesity is not just bad for the individual; it also weighs heavily on companies' rising health care costs.

The Business of Hospice Care

Wed, 31 May 2006 14:49:23 EST

Hospice care occupies a specialized and growing niche in the healthcare economy as a comfort to the dying and their families, and a potential cost-saver for Medicare. With baby boomers now hitting their seventh decade, hospice is expected to become an even more important part of the healthcare landscape, according to Wharton faculty and industry analysts. How profitable are hospice-providers, what is their long-term business outlook, and what are the unique challenges that hospice companies face, given strict government regulation amid increasing demand for their services?

Avian Flu: What to Expect and How Companies Can Prepare for It

Wed, 08 Mar 2006 16:27:20 EST

The avian flu that is steadily making its way around the globe represents a huge challenge for governments, corporations and citizens worldwide. No one knows what will happen to the avian influenza virus in the coming months and years. Will it mutate into a strain that will allow people to readily infect others? Or will it fizzle out? Despite the uncertainty, many people are taking into account scenarios ranging from mild to severe in order to plan for what could turn out to be a calamity. Faculty members at Wharton, health care professionals and risk consultants say it is important that companies assess how their organizations could be harmed by a pandemic and take preventive measures to mitigate the damage and keep their enterprises operating.

Multiplier Effect: The Financial Consequences of Worker Absences

Wed, 14 Dec 2005 16:41:41 EST

When workers take sick days, the financial impact on the company is not always related only to the specific job the sick employee performs. The impact can often ripple throughout the company, especially if the employee is part of a team whose output is time sensitive. Until recently, however, it was hard for companies to measure the impact of employee absenteeism with any hard data. As part of a research project, Wharton professor of health care systems Mark Pauly and two others identified 35 jobs in 12 industries that involve different types of production functions, and then interviewed more than 800 managers to determine the financial consequences of worker absences. They summarize their findings in a paper entitled, "How to Present the Business Case for Healthcare Quality to Employers."

After Decades of Malaise, the Vaccine Industry Is Getting an Injection

Wed, 02 Nov 2005 16:31:57 EST

After decades of decline, the vaccine industry is gaining new interest from drug makers and the federal government in response to last year's flu-shot shortage, concerns about an avian flu pandemic, and the development of potential vaccines targeted at new markets, including cancer. Still, vaccines remain a small piece of the overall drug market -- less than 3% of the global pharmaceutical industry -- and vaccine manufacturers continue to face liability problems and low payments from public-health customers, according to Wharton faculty and other experts. In the face of these obstacles, what will it take to inject some life into the ailing industry?

The Financial Risks of Terrorism: Balancing Public and Private Roles

Wed, 07 Sep 2005 15:24:58 EST

Who should pay for the economic consequences of a terrorist attack in the United States? This week, the Wharton Risk Management and Decision Processes Center publishes TRIA and Beyond, an analysis of the Terrorism Risk Insurance Act of 2002 (TRIA), which will expire December 31, 2005, if not renewed. The Risk Center's report offers policymakers, key industry representatives and other interested parties an analysis of what roles the public and private sectors should play with respect to terrorism risk coverage in the United States.

Vioxx and Other Painkillers: More Confusion, Less Relief?

Wed, 30 Mar 2005 10:17:19 EST

The latest development in the controversy over the class of drugs known as Cox-2 inhibitors -- including Vioxx, sold by Merck, and Celebrex and Bextra, sold by Pfizer -- came last week when an advisory panel of the federal Food and Drug Administration ruled that these drugs' potential benefits outweigh their risks for some patients and should be allowed back on the market, with certain restrictions. Far from being resolved, the issue continues to raise questions about the nation's drug-testing and regulatory system and is another blow to the once-unassailable pharmaceutical industry, according to Wharton faculty.

Why Bush and Kerry are Wrong on Health Care

Tue, 19 Oct 2004 05:21:18 EST

Though health care has taken a backseat to Iraq and the economy in this year's presidential campaign, the two candidates have put forth detailed - and vastly different - proposals to solve the three broad issues facing American health care consumers: mushrooming cost, inadequate availability and uneven quality. Yet Wharton health care experts doubt either candidate's plan could be enacted as proposed - or would lick all those problems if it were. Here is what they suggest instead.

Employers Step up Enlistment of Employees in Battle against Health Care Costs

Wed, 28 Jul 2004 12:53:59 EST

Though still rising at double-digit rates, health care premium increases are easing a bit, allowing employers some breathing room to explore long-term strategies to rein in medical spending. Much of the slowdown is due to a typical insurance underwriting cycle, but employers have also shifted costs to employees and are emphasizing wellness programs and consumer-driven plans as part of their cost-cutting drive, according to Wharton faculty and health benefits experts.

Bush vs. Kerry: The Economy, Taxes, Health Care and Social Security

Wed, 28 Jul 2004 12:53:59 EST

There are two

Americas

, one well off and one left behind, and tax cuts for the rich must be repealed, says the campaign of John Kerry and John Edwards.

America

’s economy is on the rebound, jobs are being created, and across-the-board tax cuts have been a key reason for that growth, according to the George Bush and Dick Cheney ticket. Yes, it’s that time again – a presidential election year full of attacks and counter attacks, of claims and counter claims, of half truths and less-than-half truths, and sometimes no truth at all. In this issue of Knowledge@Wharton we canvass Wharton faculty members to get their views on the candidates’ stands on the economy and taxes, health care and Social Security.

What's Ahead for 2004

Tue, 20 Jan 2004 11:08:42 EST

After a slow and confusing economic recovery, 2004 will be a year of solid improvement building on positive news, including the capture of Saddam Hussein, at the close of 2003. New technology and changing public policy, as the

United States

faces another presidential election, will also shape the business world in the coming year, predict Wharton faculty, who were interviewed by Knowledge@Wharton on five key sectors: the economy, the banking industry, airlines, telecommunications and health care.

Without the Next Blockbuster Drug, Merck Faces a Murky Future

Wed, 03 Dec 2003 09:44:22 EST

Once viewed as the world’s premier pharmaceutical company, Merck & Co. now finds itself confronting a number of problems for which there are no easy remedies. The company faces a dearth of new drugs to replace top sellers due to lost patent protection in the next few years, and has canceled work on a highly anticipated depression drug that failed in late-stage trials. Wharton faculty and outside analysts look at Merck’s strategy in the midst of a drug industry slowdown. One possible option: Merge with Johnson & Johnson.

Restructuring Medicare Is a Riskier Operation than First Thought

Wed, 20 Oct 2004 17:07:33 EST

After years of promises, the U.S. Congress is finally weighing House and Senate bills that would restructure Medicare to provide prescription drug coverage to 40 million elderly, but could also shift management of the program to private insurers as America's baby boomers reach retirement. Hailed as a bipartisan success when passed in late June, the two bills are losing some of their luster as they face closer scrutiny by a conference committee charged with reconciling the legislation this fall.

Major Health Care Reform Under President Bush Remains Elusive

Wed, 04 Dec 2002 00:00:00 EST

Three of the chief health-care challenges facing the United States are: finding a way to provide coverage for the millions of uninsured, reforming Medicare, and setting up a prescription-drug plan for the elderly. Faculty members at Wharton say the Bush administration is likely to make headway on only the third of these problems in the next two years. Yet a prescription drug program, by itself, won't begin to address the full extent of the health-care crisis in America.

Selling Life-Saving Drugs to Poorer Countries: At What Cost?

Wed, 06 Nov 2002 00:00:00 EST

The African AIDS pandemic has drawn international aid organizations, governments and pharmaceutical companies into a global debate on whether rich countries should pay more for drugs than less developed nations. This system of differential pricing makes sense on social-justice and economic grounds, but it is difficult to administer in the real world, according to experts who recently participated in a Wharton conference entitled "Pharmaceutical Innovation in the Global Economy."

Bristol-Myers Squibb Illustrates Woes of Ailing Pharmaceutical Industry

Wed, 17 Jul 2002 00:00:00 EST

The once-mighty pharmaceutical industry, for years the nation's most profitable, has begun to show some cracks, as lucrative drug pipelines dry up and employers and government balk at paying its patent-protected prices. But no major U.S. drug maker seems to be facing more problems than Bristol-Myers Squibb. Once a solid performer with a strong franchise in the highly profitable cancer market, the company has recently suffered a series of setbacks in its attempts to boost declining revenues.

In Battle to Lower Employers' Health Care Costs, Will Employees Become 'General Contractors'?

Wed, 13 Feb 2002 00:00:00 EST

Following the backlash against managed care and faced with a sharp rise in health care costs this year, employers are searching for a new cure to spiraling health care premiums. Many are considering a model based on self-directed care, in which employers set aside a certain amount of money for their workers' health coverage, then let each employee have a say in how best to spend it. Wharton faculty discuss the pros and cons of such an approach.

Prescription Drug Coverage for Seniors Faces Uncertain Future

Wed, 10 Oct 2001 00:00:00 EST

Less than a year ago, in the heat of the presidential campaign, it seemed almost certain that Medicare would undergo a major transformation that would provide prescription drug coverage to the program's 40 million seniors. But that was before an economic slowdown and the Sept. 11 terrorist attacks. Now there are new, more urgent priorities and it's unclear just when the debate over drug coverage will again get underway.

When Taking Two Aspirin Won't Do: A Primer on the Patients' Bill of Rights

Wed, 18 Jul 2001 00:00:00 EST

Anyone who has received a brochure describing medical coverage options knows just how baffling and legalistic the language can be. So, too, is the ongoing debate over the so-called "patients' bill of rights" currently winding its way through the U.S. Congress. To help explain some of the key issues, Knowledge@Wharton asked Wharton faculty members for their views on what the final bill should include.

Wharton Economist Proposes Health Plan for Uninsured

Wed, 20 Jun 2001 00:00:00 EST

It has been one of the most intractable problems facing public-policy makers for years: How to provide effective, affordable health coverage to millions of uninsured Americans. At a news briefing in Washington, D.C. on June 20, Mark Pauly, chair of Wharton's health care systems department, and other health insurance experts presented different proposals to deal with this issue. Below, Pauly explains the advantages of his particular approach.

What's Behind U.S. Drug Companies' Response to the AIDS Crisis Abroad?

Wed, 11 Apr 2001 00:00:00 EST

As the magnitude of the AIDS crisis abroad becomes tragically clearer, U.S. pharmaceutical companies have come forward with offers of key drugs to poor countries at greatly discounted prices. What lies behind these offers? And what do they mean for America's system of developing and marketing new drugs?

Wharton Faculty Wish-list for George W. Bush

Wed, 17 Jan 2001 15:21:20 EST

There is little doubt that President-elect George W. Bush will have to hit the ground running once he is sworn into office on Jan. 20. A convergence of factors – ranging from leftover election rancor to a divided Congress to a newly sluggish economy - means Bush will have an unusually short honeymoon. Knowledge@Wharton asked Wharton faculty members to identify the most important issues – related to their own fields of expertise – that the new administration should address.

Gore and Bush on the Issues: Long on Assumptions, Short on Details

Wed, 19 Jul 2000 14:03:01 EST

When Gov. George W. Bush and Vice President Al Gore wrap up their nominating conventions in the next few weeks they will get back to campaigning in earnest, and voters are sure to hear plenty of talk about the state of the U.S. economy, the future of Social Security, health care, electronic commerce and foreign trade, among other issues. But so far, the candidates for the American presidency have been somewhat vague on the details. Wharton professors analyze what's been said so far, and what hasn't.

Decoding the Human Genome: How Will it Impact Business?

Wed, 05 Jul 2000 14:31:30 EST

Two teams of scientists—one consisting of university researchers at the Human Genome Project and another of scientists from Celera Genomics Group, a private biotech company—announced last week that they have completed an initial sequencing of the human genome—the genetic blueprint for human beings. Announcing this breakthrough, U.S. President Bill Clinton and British Prime Minister Tony Blair said this development would lead to a new era of molecular medicine. As scientists continue to unravel the mysteries of the genetic code, what will be the business implications of their research? How will new findings affect the pharmaceutical and insurance industries? Knowledge@Wharton discussed these questions with Patricia M. Danzon and Mark V. Pauly, professors in Wharton's health care systems department.

What Policymakers Don't Know About Health Insurance

Wed, 24 May 2000 14:45:56 EST

Given the current controversy over the merits of employment-based health insurance versus individual insurance, what's a consumer – or policy maker - to think? In a recent book titled Pooling Health Insurance Risks, two Wharton researchers take an in-depth look at the relationship between premiums and expected medical expenses across the three major sources of private health insurance in the United States: Large employment-based group insurance, small group insurance, and individual nongroup insurance. They expose some common misconceptions about how these insurance markets work, showing, for example, that employment-based insurance ultimately may not be performing as well - nor individual insurance performing as poorly - as generally believed.

Outlook for Aetna's HMO, and Others: Higher Costs, Less Market Clout

Tue, 25 Apr 2000 14:25:26 EST

Aetna U.S. Healthcare of Blue Bell, Pa., must feel like it has a persistent case of the flu these days as it struggles with high costs in its Medicare line, embattled relations with doctors and hospitals around the country and operating losses in its Prudential Health Care business, which it recently acquired. But things may be looking up these days as the company settles some long-standing disputes and focuses once again on the business of health care.

Genetic Testing's Uneasy Relationship with Life Insurance

Wed, 01 Mar 2000 13:58:03 EST

On February 8, 2000, U.S. President Clinton signed an executive order prohibiting federal agencies from collecting genetic information from their employees or using such information to make hiring, promotion, or placement decisions. Clinton's action clearly reflects efforts among consumer groups to protect an individual's right to privacy in the area of genetic testing. Yet the insurance industry, among other groups, has a vested interest in the results of genetic testing when it comes to term life insurance. Using the most recent data in this field, a group of Wharton researchers build an actuarial model that evaluates the increased risk of breast and ovarian cancer in the presence of family history and/or gene mutation, and then calculates the possible effects on insurers who sell term life insurance.

Should Managed Health Care Be Regulated?

Sat, 27 Mar 1999 05:02:45 EST

Managed-care insurance is under fire these days, and some lawmakers feel that new regulations should be put on the books to assuage consumer dissatisfaction. But a Wharton health-care expert and a health-policy researcher argue that not all proposed regulations governing the type and quality of care may be needed. Regulations can be beneficial, however, if they focus on requiring insurance providers to give people information that will help them make informed choices.