CEO Tim Vasko's TEPR Conference Speech

May 20, 2005 — What do Salt Lake City , British Columbia , and Victoria , BC (my home) have in common? This is a question that has relevance, for you, which I will address as we explore the Global Pharmacy and it's EHR over the next few minutes.

What is Global Pharmacy? What is the Electronic Health Record, and what do people who already have a Global EHR share in common?

What is the best type of program? Is it program which involves people clamoring to use it, a program that's not dictated, a program that's not required, but rather is in demand? A program people love!

The questions surrounding e-Health, and how to face today's challenges, are as numerous as the ideas and approaches being taken.

Is it possible to create a system of health that not only pays for itself, but that people naturally gravitate toward? A system that goes down in cost and up in efficiency as it operates?

I believe that it is. I see it working, every day - the global pharmacy system is just such a system.

As rogue as Napster with as much promise as the Apple iPod: a technology that 15 million music listeners have embraced, pushing the movement - two thirds of those within the last six months.

Yet who of us doesn't recall the damning controversy, of music delivered over the internet, surrounding Napster who was sued by the Recording Industry Association of America (RIAA) in December of 1999?

Apple is now selling more than $500 million per year in music, using the same model, while expanding globally. To drive this movement, they are giving away a free song to every citizen of Switzerland this month, while also expanding to Denmark , Norway , and Sweden . Who would have thought that the rash and rouge Napster model would blossom into a booming new channel for the delivery of music.

Can we sing to this same song of rapid adoption and success in E-Health?

The market for online prescriptions started about 4 years ago by a young, entrepreneurial, pharmacist out of Winnipeg who was going broke in his corner drug store. While the market between Canada and the US has generated a billion dollars in sales, and more media attention as Napster just a few years ago, another phenomenon has taken place: technological growth.

Technology has evolved. The results, of which, are not only a world wide price leveling, but also an Electronic Health Record, for customers of these “rogue” pharmacies, that is more robust than the paper in their “conventional care” facilities.

Working outside the mainstream, innovators in this sector have developed advanced technology and systems. Orders are placed, tasks are delegated, and inventory is maintained. Doctors view and sign prescriptions – without a sheet of paper in sight.

The result, for patients, is more than just savings and convenience – it's an electronic health record that their pharmacists, doctors and caregivers can access anytime, anywhere. It's interesting to note that a client of a, supposedly, “outside the mainstream” internet pharmacy is more likely to have established an EHR than one who patronizes mainstream institutions USA .

All of this was achieved without an overarching plan - although it was done so with a great deal of vision.

These technological solutions were built through organic means, to overcome barriers, borders, and regulatory inefficiencies. Systemic impediments, as outdated as music on vinyl, such as: paper, prices and protocol, are all expensive and ineffective.

All of the players (customers, pharmacies, doctors), motivated by self interest and market forces, have enthusiastically adopted new technology, and become co-trailblazers in establishing a vibrant EHR system.

Washington State has recommended, to its citizens, the purchase of medications from Canadian Internet pharmacies. Over 10% of US states have already provided assent to some form of internet pharmacy. Why?

Let us look first at where we now are in health care in the USA .

Nearly every article on health care spending, in the United States, quotes:

The US spends 15.5% of its GDP on health care - about $1.7 trillion a year. No other country comes close to that number.

Put in perspective, 1.7 Trillion dollars is as much money as has been in circulation for 46 years, since 1959: the lifetime of most of us “Baby boomers”

1.7 trillion is number of barrels of oil ever produced!

And that's the outlay every single year in America for health care.

Yet for all of that money, 45 million Americans live without health insurance. 36.3 million Americans, more than the entire population of Canada, are over the age of 65: representing 12% of the entire US population.

And this aging population is, by virtue of their predicament, using technology to help them solve their problem. Technology that is more accessible than many medications which are un-affordable in the United States. In the process they are creating an EHR for us to model and embrace. Who of us, in this room, in this country, can blame them?

These people, using the Global Pharmacies, and creating their EHR's, are not “rogues”, they are my parents and perhaps yours. They are seeking alternatives, driving innovation, and change in a market that needs change.

Let me illustrate two “out of the mainstream” extreme examples from an e-health / e-pharmacy system, right here in the USA, that is not only sanctioned but funded by Medicare for the medications - yet gets no credit for the EHR it creates:

For four years, we have worked with Geriatric Services of America: an e-health provider of case management, and pharmaceuticals, for respiratory disease patients. COPD is a disease that will be the number one killer, in America, by 2005. There are 30 million COPD sufferers in the USA – I'm finding a redundant theme here in comparing this number to the 30 million citizen Canadian population.

This group is qualified to have its medication paid for by the US Medicare system, along their medical equipment - that is if they know about it. Until the net, Medicare part B had been, sadly, a well kept secret. A secret that put Lillian Smith into a 12 by 12 room at the Salvation Army. Lillian owned a beautiful $250,000 retirement home, and a car, in Sun City Arizona. But she had COPD and needed medications to live. Some years after she had run out of money for medications, oxygen, and equipment Lillian had lost her home, car and her financial independence as a result. Lillian made a telephone call. In less than 30 days, she was getting all of her medications for free, and her health improved. Unfortunately, however, her financial status didn't improve - and we had created an un-necessary burden on the system. Lillian's economic life had deteriorated from the systemic inefficency, even though her meds became accessible. Imagine, for a moment, that this was your mother, grandmother, wife, or yourself.

Lillian simply didn't know that she could make a call, create an electronic record, never walk into a drug store, and still be cared for. In the GSA model, that found Lillian, (or that Lillian finally found) technology enables a working EHR to be shared and accessed by: reparatory therapists, doctors, and the pharmacy – all from separate locations. Just like the global pharmacy model, people get their medications at drastically reduced costs (or free in this case)?

Elizabeth Goldsmith was bed ridden. She made consistent ambulance trips to the ER, which the system paid for. She wasn't compliant with her meds, because she couldn't afford the daily dosage. Being a conservative individual, she skipped taking them consistently, in hope that when she “really” needed them, Elizabeth would have some at home in her medicine cabinet.

Someone told Elizabeth about the GSA program, and she registered on the web. Through the GSA e-health system she became medically compliant, and was able to watch her health dramatically improve from bed-ridden to being able to go dancing with her husband. Elizabeth got more than her meds, she got back her life.

Every day we create E-records

Stories like this come flooding into our quality control associates e mail in- boxes, and phone head sets. People are able every version of good news you can imagine; and we're just the tech folks, hearing about these stories intermittently or from our clients customer service center.

Thousands of people, daily, are taking action and creating a better life and better medical record and system – but they are doing it alone and in the face of adversity: with no support from the system, and with manufactured “supply shortages”. A raging supply shortage exists globally, only for the sake of manufactures profits – one which is threatening to shut down the GSA system that gets no fee for helping patients. They must rely 100% on Medicare reimbursement for their medication. Is this the right?

The Global Pharmacy system gets threats, bad press, and supply squeeze, yet it persists and thousands of new e-Health records are created daily. It works in spite of these pressures, for two reasons:

First: the people who need to take action to live. Individuals such as Elizabeth and Lillian are creating, at no additional cost, a FREE Electronic Health Record. These are motivated volunteers in shaping this system. They have the energy and enthusiasm to create this system.

Second: it make sense. The outdated systems that are a burden have been surpassed by technology.

All we have to do is embrace it and let it prosper for everyone's benefit. The patients, the system, and yes the pharmaceutical market, create consistency and standards that these ‘rouge' customers follow. The benefits are endless.

The prescription medication market is only just emerging on a global scale. R&D and new advancements will be made through “voluntary” participation of a world population that will have increasing access to meds. Parts of the world, where meds have never been available, are opening up at a pace as rapid as the population age changes - as rapid the health care cost rises in the USA .

One aspect of electronic care records, which has received little attention, is the potential benefit to clinical research. Electronic records could facilitate new interfaces between care and research environments. The results are improvements in the scope and efficiency of research and the development for new treatments and medications.

When markets expand, in this way, profits don't shrink with demand (unless Adam Smith was totally off his rocker), they balloon. I hate to bring yet another industry to the table, to illustrate global price leveling accompanied by growing demand, but I am forced to.

We've talked about music. Let's now look at something, besides medicine, that we, as Americans, have learned we can NOT live without: oil.

Globally, oil prices are flat yet profits are rising as is consumption.

This is driven by more than the population of the USA . It's predicted that Oil will reach $80 - $100 per barrel. In 1959 the price was 1.90 per barrel. Unlike 1959, today's consumption is driven globally by countries like China and India . With growing access to cars, these new markets will drive demand – a phenomenon that will manifest itself in the health-care industry, as these emerging economies gain access to new medications. The future is a larger world market and that will drive the need for more medications.

Anything lost in margin today, for manufacturers, is a pittance when looking at the long term growth of consumption, and availability of information. Globally accessible information, for health care advancements, will ensure a vibrant market for medications, electronic services, and innovations for generations to come.

Most importantly, this EHR doesn't cost anything. People are creating the system and the records voluntarily. They do this because they save money doing so.

Think about this implication: a model that is driven to be more efficient, deliver better information, and deliver information faster - with full support of the patients, at no cost; a system that drives down the cost of creating electronic records while creating clearer and better data.

Let's do what Apple is doing with the technology for music distribution with its iPod; lets implement the same level of thinking to the Global E-Health Record; and in doing so solve the accessibility problems here in the United States .

I would not presume to state that Global Pharmacy and the resulting EHR is by any means Nirvana or the panacea for the US Health Care system. However, in the words of Daniel Webster, as stated in 1830 while addressing congress:

“When the mariner has been tossed for many days in thick weathers, and on an unknown sea, he naturally avails himself of the first pause in the storm, the earliest glance of the sun, to take his latitude, and ascertain how far the elements have driven him from his true course. Let us imitate this prudence, and, before we float farther on the waves of this debate, refer to the point from which we departed, that we may at least be able to conjecture where we now are.”

Believe that a working model, an active model, that lowers costs and increases effective information, is a start. And from where we are now, we should look to this pause in the storm, of health care cost, and conjecture how we might take advantage of this opportunity to chart a better course.

Just when it seems like this system is at hopeless odds, there is a hopeful break in the storm: a working EHR. An emerging system that is fueled by global access, that can meet the needs and interests of an overly burdened US Health Care system - a system that is being crushed under its own weight of cost, inefficiency, public doubt, and political debate.

Why should we embrace this approach, this market? Because, like music, oil, and the internet, this is not going to go away - and we don't want it to! The reason we are all here today is because we know that the work we do is the right work to do.

With our acceptance and support, standards can be set for accuracy, safety, security, and the EHR can get a huge push forward to proliferation, success, and the critical saving of money and lives.

I would hope that Henry McKinnell, President of the largest pharmaceutical company in the world, would understand (being a stalwart sailor) and help chart this course on these stormy seas.

Now, let me answer the riddle I started with:

Salt Lake City , Utah and British Columbia are both hosts to the largest cooperative global athletic event on the planet: the Olympics. Salt Lake City hosted the Olympics in 2002, and in 2010 Vancouver and Whistler, BC will host the games. If these games can survive and thrive for centuries in a global environment, why can't health care?

And Victoria , BC is the birthplace of the CEO of the planet's largest pharmaceutical company, Henry McKinnell. He is a ship captain's son, worked as a deckhand, at 15, and was first mate at the age of 17. I would hope that he, along with other industry captains, will sail their ships on a course charted towards the growth of this success.

Today, Victoria , BC is the birthplace of another leader in e-health: the largest working cooperative EHR technology system, which is not yet large at all, and the emerging pharmacy network, and search engine, for global prices - Pharmocracy.com.

In these controversial, difficult, and challenging times, I am encouraged by the observation of Albert Einstein, who stated:

“we cannot solve the difficult problems we face today at the same level of thinking we were at when we created them.”

It is my personal hope that we have the courage to think differently, and set sail, cooperatively, in solving these problems. We must encourage working innovations, such as the EHR, as others as they emerge.

The Global Pharmacy, that drives the EHR, will help build the Pharmocracy of access, information, and innovation for tomorrow - where medications and records are globally accessible for a safe, secure, and successful e-health care system.