KCUR News
5:28 pm
Tue July 6, 2010

HHS Secretary Addresses 'Valley of Death' With Area Drug Developers And Researchers

Kansas City, MO – U.S. Health and Human Services Secretary, Kathleen Sebelius, used to be governor of Kansas. She was back in her home turf today, meeting with area research and industry leaders about how to avoid the so called 'valley of death' in drug development. KCUR's Elana Gordon caught up with Sebelius during her visit to talk about her key role in implementing health reform, how the government is addressing insurance premium rate hikes, and how it's setting up temporary insurance options for people with pre-existing health conditions until a new insurance system takes effect in 2014.

GORDON: A lot of folks at the Kansas Department of Insurance have referred to the process of implementing health reform as 'drinking water out of a fire hose.' What has it been like for you with developing these regulations and implementing them?

SEBELIUS: Well, it's a huge bill and there was a lot initiatives that were put in place with 2010 deadlines. In fact, by the time the law was signed by President Obama, a couple of the deadlines had passed because it was anticipated that they'd be done at the first of the year. So it's been a huge challenge. We have a great team of people at the table, and we're working with Treasury and with the Department of Labor, who are the three primary agencies for all of the initial regs. And miraculously, they've all come out on time and on schedule. I'm doing a lot of outreach on a regular basis with advocates and insurers and providers and bringing people in. But so far so good.

GORDON: The Kaiser Foundation estimates that premiums are going up by about 20%, and I'm wondering how from the Department of Health and Human Services standpoint that's being addressed and what some of the challenges are.

SEBELIUS: Well, the bill really anticipates that the regulatory oversight will stay at the state level. So, Commissioner Praeger and her colleagues around the country will be the front line for rate review. We have actually asked that commissioners take a really close look at what their regulatory authority is. In some states, companies don't even have to get approval for rate increases. We actually put some additional resources out in states saying, 'why don't you, you know, look at enhancing this because you really are the consumer protection agents, you're the front line of this.' We have at the department level an opportunity to actually call out what are called excessive premiums, and so we're beginning to collect data. And also starting July 1st, we have a website that's up and running, which is pretty amazing. It's healthcare.gov. For the first time ever all of the information about private plans and public plans that an individual may be eligible for are pulled together in one easy to use, easy to access site.

GORDON: As states gear up for these high risk insurance pools, Missouri and Kansas are getting ready to open them, but are still waiting for the final processes to be in place. And at least in Kansas and Missouri, some of the concerns are the capacity. For example, in Kansas, they're going to be limiting the pool each month to 25 slots. And I'm just wondering how some of these limitations, with the intention being to open up access to people with preexisting conditions, how this is being addressed or discussed.

SEBELIUS: Well, the new preexisting condition plans were never designed as the ultimate market for those individuals who have been locked out or priced out of the market place. Kansas has run a high risk pool which has people in it right now. This is an additional strategy, but really kind of a bridge strategy till 2014 when the new market place, the new exchanges, will exist and no one will be able to eliminate anyone with preexisting conditions. So this year, insurance plans have to include kids with preexisting conditions and for adults - the sickest adults - there will be a new limited option. But again, it's just one more step to just try and put some coverage under people who just have not had any kind of affordable option.

GORDON: At today's conference, that focuses on the role of academia in cancer research, one of the things you had mentioned was the need to speed up this process of bringing drugs and therapies into fruition. What do you mean by that? And, how do you balance [that with] the the way science works, and the patience and time that's needed?

SEBELIUS: Well, part of the acceleration of the process is really a look at what is the so called 'valley of death.' So, in a lab at the University of Kansas, a really promising therapy is identified, and then there is often a multi-year process of clinical trials, of making sure that the therapy works correctly. And very little information is exchanged during that period of time. So, companies put up a lot of money, go through the clinical trials, only to find out years later that they're on the wrong path, or something has gone awry. What we're learning is that putting the scientists together at the front end with some of the regulatory scientists - talking about what the benchmarks might be, looking at a much more timely process to see if they're on the right path, communicating - we think can really accelerate developing lifesaving cures.

GORDON: How has [being] governor of Kansas prepared you, or not prepared you, for being Secretary of Health and Human Services?

SEBELIUS: Well we've got 11 agencies under the Department of Health and Human Services. So as a governor, I had a cabinet, each of whom was charged with a different focus on Kansas - jobs, education, and others. So that's a similar operation. I'd worked with the legislative process, so working with Congress is helpful. I tell people I hadn't had a boss in a while. So, I've got a boss again. And every once in a while people remind people I can't go charging off, we need to actually talk to the White House. And I'm reminded of that. So, there're some definite changes. But I think being governor was very helpful. And in this area, you know, having been a governor here in Kansas, having been there when we created a bioscience authority which was really designed to not only have a stream of state money, but to work with the academic institutions and the private sector to bring scientific developments, lab developments into fruition - it's very familiar in what we're talking about today. And I think Kansas actually was one of the leaders in looking at how we at the state level could help spur that kind of partnership and collaboration. And that's exactly what we're trying to do at the federal level.

GORDON: Secretary Sebelius, thanks for speaking with me.

SEBELIUS: Great to visit with you.

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