 Spectrum --
October 2007
 Introduction:
Pharmaceutical manufacturers must contend with the
often-conflicting requirements of three principal customer groups: payers,
providers, and patients. Health plans and pharmacy benefit management companies
(PBMs) maintain enormous influence 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 cost-containment 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 specifically
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
reflect 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 influence 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 influence of health-related Web sites.
Related Spectrum Reports:
Creating Win-Win Solutions from the Ongoing Drug Cost and
Price Debate
Pharmaceutical Innovation: Is It Really Rewarded?
How to Avoid Health Care Rationing: Don’t Restrict Supply,
Manage Demand
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