Abstract
Introduction
Pharmaceutical manufacturers must contend with the often-confl icting requirements of three principal customer groups: payers, providers, and patients. Health plans and pharmacy benefit management companies (PBMs) maintain enormous infl uence over consumers' health care choices through their control of formularies and reimbursement restrictions. However, formulary designs are rapidly changing, and reimbursement restrictions are being used more frequently. And although physicians remain the ultimate decision makers regarding which medications patients receive, some traditional methods that drug manufacturers have used to access physicians are becoming increasingly difficult to employ. Meanwhile, the spread of "consumerism" has begun to shift responsibility for health care to patients-who may not be willing to spend as much money on drugs in a brave new world that features consumer-driven health plans (CDHPs) and 24/7 access to health care information via the Internet. Reconciling the demands of all three groups is likely to prove more difficult for drug manufacturers in the future.
Get the Answers You Need to Shape Your Strategy
- Cost-containment measures are proliferating within the reimbursement plans of managed care organizations (MCOs) and PBMs. What are the most popular cost-containment measures? Why might some costcontainment measures backfire?
- Faced with growing numbers of drugs and increasing costs, the pharmacy and therapeutics (P&T) committees that decide the composition of formularies for MCOs and PBMs are becoming increasingly demanding of drug manufacturers. What information are P&T committees specifi cally requesting from manufacturers so that these committees can evaluate the overall value of manufacturers' products?
- More than three-quarters of P&T committees regard drug acquisition costs as the predominant factor in formulary and reimbursement decisions. However, the vast majority of P&T committees are prepared to give preferred formulary status to certain new drugs that are in fact more expensive than current formulary drugs. Under what circumstances are P&T committees likely to grant preferred status to more expensive drugs?
- Spending by pharmaceutical companies on physician detailing has recently declined, which may refl ect growing resistance to this type of promotional practice in the medical community. What barriers do manufacturers increasingly have to overcome to maintain their detailing activities?
- In recent years, the role of "consumerism" in U.S. health care has attracted considerable attention and introduced the creation of consumer-driven health plans (CDHPs). Why might the spread of CDHPs be bad news for drug manufacturers?
Scope
- Payers: new designs for MCO and PBM formularies; the use of rebates and discounts; the proliferation of cost-containment measures.
- Providers: changes in the use of physician detailing, professional advertising, and sampling.
- Patients: increased direct-to-consumer advertising; the rise of "consumerism"; the establishment of health-savings accounts and CDHPs; the infl uence of the Internet.
- Outlook and implications: the reimbursement environment; the increasing role of generics; new criteria for formularies; the use of health technology assessment and health economic evaluation; increasing consumer emphasis on disease prevention and wellness programs; the role of CDHPs; the infl uence of health-related Web sites.
Table of Contents
- Executive Summary
- Strategic Considerations
- Stakeholder Implications
- Introduction
- Payers
- Formulary Negotiations
- Rebates and Discounts
- Increasing Cost Containment
- Multitier Formularies
- Patient Copayments and Coinsurance
- Use of Generics
- Prior Authorization and Step Therapy
- Providers
- Physician Detailing
- Professional Advertising
- Sampling
- Patients
- Direct-to-Consumer Advertising
- The Internet
- The Rise of Consumerism
- Outlook and Implications for the Pharmaceutical Industry
Sidebars
- A New Generation of Health Web Sites
- Encouraging Consumers to Take More Responsibility for Their Health Care
Tables
- 1. Frequency of Select Situations in Formulary Decision-Making
- 2. Importance of Select Factors in Managed Care Organizations' Formulary Decision-Making
- 3. U.S. Employers' Views Regarding Strategies to Increase Prescription Drug Benefit Value, 2005
- 4. Pros and Cons of Direct-to-Consumer Advertising
- 5. Key Features of Health Savings Accounts and Health Reimbursement Accounts
Figures
- 1. Managed Care Organizations' Desired Changes in Pharmacoeconomics
- 2. Mean Patient Copayments for Generics, Preferred Branded Medicines, Nonpreferred Branded Medicines, and Fourth-Tier Drugs, 2000-2006
- 3. Percentage of Covered Workers Required to Pay Copayments and/or Coinsurance, by Formulary Tier, 2006
- 4. Mean Patient Coinsurance Rates for Generics, Preferred Branded Medicines, Nonpreferred Branded Medicines, and Fourth-Tier Drugs, 2000-2006
- 5. Total U.S. Spending on Select Forms of Pharmaceutical Promotional Activity, 2002-2006
- 6. Percentage of Employers Offering Their Employees the Option of Enrollment in a Consumer-Directed Health Plan, 2004-2008 (projected)
