Pressure to contain spiraling health care costs is creating greater demand for personalized and innovative medicine, a venture capitalist told a gathering of biotechnology representatives Thursday.
Steven Burrill, CEO of San Francisco-based venture capital firm Burrill & Co., said the problem with United States health care is that the patient — the actual consumer — does not know what most services cost, since payment is handled by governments, insurance companies and employers.
“If you were penalized for sickness, you would find a way to improve your state of wellness,’ Burrill said, who likened the health care system to a “menu without prices.”
“There is virtually no incentive in the system for you and I to stay well,” Burrill said.
That is starting to change, Burrill said, as the payers of health services look for ways to cut costs, forcing patients to more actively care for their health and choose services personally appropriate. Burrill said as a result, patients will demand better outcomes and not settle for old ways of doing business, which he said tend to rely on one-size-fits-all approaches dictated by traditional payers.
Burrill was the keynote speaker at a daylong conference Thursday organized by BioNJ, a trade group that advocates for the biotech industry in New Jersey. The event, the Diagnostics & Personalized Medicine Innovation Summit, was held at pharmaceutical company Sanofi’s Corporate Drive campus, in Bridgewater.
As demand for more personalized therapies grows, Burrill said opportunities are created for biotech companies to experiment. He said there are “fabulous technologies not making its way to the market because of the perverse systems of the health care system.”
But Burrill said access to capital, long a problem for developing companies, is starting to improve, noting the rising stock market and increased number of initial public offerings.
Additionally, the stocks of biotech companies have outperformed the general market, Burrill said.
Burrill’s talk was preceded by Elias Zerhouni, president of research and development at Sanofi. Zerhouni said medicinal research — historically a relatively closed process — needs to become more transparent and invite better collaboration.
“We are in a new era facing tremendous challenges, and we’re evolving from a closed system to an open system that breaks open these barriers,” Zerhouni said.