Do Prescription Drugs Add to, Shift, or Reduce Healthcare Costs?

One would think that by implying your prescription drugs keep people healthy and out of the hospital you could also imply and conclude that drug treatment will lower overall healthcare costs for those patients.  The pharmaceutical industry has implied this for decades.  And, this may actually be true in many cases but the evolving new healthcare market is becoming much less receptive to what would seem to be obvious and will be demanding more and better data to support any claims of improving clinical outcomes at lower cost.   Interestingly, some healthcare providers have already determined this is not just a pharmaceutical industry issue.

For example, pharmacists for years have claimed that they can help patients avoid medication errors and improve patient care through patient counseling and follow up.  They are often the only healthcare provider with that opportunity once a prescription is written, especially for chronic conditions.  Seems logical that pharmacists obviously play an important role here.  But then you read the recent study that suggests that mail order pharmacies may do a better job of lowering costs while improving clinical outcomes than local pharmacies.  Whether or not this study can be replicated or validated remains to be seen but it represents how it is going to be better to have data to support your position than to rely on implication.  Think about pharmacists who now are trying to make their case for improved clinical outcomes with counseling at the local pharmacy.  What data do they present to refute this mail order study?

Similarly, Express Scripts® recently reported on several research studies that demonstrate the ability of Pharmacy Benefits Managers to lower costs and improve clinical outcomes.  Again, even as part of the “managed market,” Express Scripts® felt compelled to support their benefits claims with data.

Why is this important?  Because pharmaceutical companies who still feel they can use traditional marketing and sales advertising and promotion to imply being able to lower costs while improving clinical outcomes  without actually having the data are going to have a much more difficult time convincing decision makers and selling their products.  More importantly, pharmaceutical companies that develop the real world data to support their claims for improving clinical outcomes and lowering overall healthcare costs (and not just shifting costs to another part of the healthcare system), will find a more receptive audience and create a significant competitive advantage.

We are entering a time where the healthcare market will expect you to prove (“show me the data”) that you (as a healthcare provider) or your products or services are delivering demonstrated (data driven) real world clinical outcomes that reduce overall healthcare costs.



2 thoughts on “Do Prescription Drugs Add to, Shift, or Reduce Healthcare Costs?”

  1. Mike – Agree with your assessment that pharmaceutical manufacturers are going to have to demonstrate brand value through real world data. Another important developing trend is the delivery of “pill plus” programs that show how a fully integrated adherence program in combination with a drug can improve patient outcomes and lead to reduced medical costs. This approach can be truly game-changing in an environment that is becoming increasingly scrutinized by payers and politicians and rapidly genericized. Whoever demonstrates the best value through these pill plus programs will have an edge with payers and ultimately stands to win in the post healthcare reform era.

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