Tag Archives: pharmaceutical

Drug Company Spends $100 Billion But Not to Find New Drugs

This could be the headline if the Pfizer acquisition of AstraZeneca comes to fruition.

Pharmaceutical companies continue to remind us that the reason they have to charge outrageously high prices for their drugs is because drug discovery and development is high risk and very expensive. This argument has always been suspect but now there is clear evidence that it isn’t the high risk and high cost of drug development that drives high drug prices.

Here are two examples that totally discredit the premise behind high drug prices being espoused by Big Pharma.  Gilead spent $11 billion and Pfizer is contemplating an acquisition which will cost the company over $100 billion to buy a company.  These acquisition costs represent more than 5 years’ worth of R & D spending by either company.  Unfortunately, no new drugs will be coming from the money spent on these acquisitions. That’s right, no new drugs, not one, come from the money spent on these acquisitions.  Sure the companies will continue to develop some of the compounds that are already in their respective pipelines, but the $11 and $100 billion isn’t going to discovering or developing any new treatments.

Unfortunately, rather than increasing drug discovery and development, these type acquisitions divert money away from drug research. In addition to the cash and stock value used in the acquisition, the acquiring company looks for “redundancy” and “operational synergies” which result in massive cuts in research budgets and staff.   Bottom line?  Billions of dollars spent for less research, fewer drug discoveries.

It is clear that drug companies don’t have to charge outrageously high prices to cover their R & D expenses. In the examples given here, patients are paying for the acquisitions.  Drug companies obviously have more than enough cash to fund even more research than they currently do.  Rather than innovative drug research, their high drug prices are supporting luxurious operating expenses, overpriced acquisitions, and extraordinary executive compensation (Gilead, Pfizer, and several other Big Pharma CEOs are among the top compensated CEOs in Corporate America).

Rationalizing the high prices they charge for medicine with the high cost of R & D is just another reason Big Pharma has lost all credibility with patients, regulators, and the healthcare market.

Thinking about being a Pharmaceutical Sales Representative

People researching pharmaceutical sales as a career option often come across some of my blog posts and ask my opinion about becoming a rep.  It seems everybody has their own impressions about what pharmaceutical sales is all about and why this might be a good job or career choice.

Seasoned veterans looking for a new position have their own criteria for making a change, often just trying to determine if a company can deliver what they are looking for that they aren’t getting from their current position.  For some, including those who might have been laid off,  it’s more about whether or not they want to continue being a pharmaceutical sales rep, finding “the right company”, making more money, or maybe even making a big change and pursuing another sales field (e.g., medical devices) altogether.

Some of the requests I get come from those who have never done pharmaceutical sales but have heard about the attractive starting salaries, enticing bonus opportunities, car, full benefits, an expense account, and flexible schedule.  For others, however, pharmaceutical sales  is just another job option rather than a career aspiration.   This situation is probably more prevalent today, especially in this economy where it is difficult to get any job.

Finding a job and pursuing an career opportunity can be an emotional roller coaster, which can cloud thinking and compromise decision making.  This is especially true when an unemployed person is desperate to pay bills.  Therefore, rather than draft a job description and debate the pros and cons for becoming a pharmaceutical sales representative, here are some questions to help think through some of the issues.

    • Are you comfortable with what you have been able to find out about the company?
    • Does the company have a product or products that you can believe in?
    • Is the territory in a place you want to live?
    • How extensive (how long) is training?
    • How important is understanding the science and medicine behind the products?
    • How does the company determine you are ready to sell their products?
    • What resources does the company provide to help you sell their products?
    • Are physician presentations “scripted” marketing messages or conversational?
    • What training do you get for working in a “managed market?”
    • What is the sales performance history for the territory?
    • What is the reputation of the previous representative in the territory?
    • How much managed care is in the territory? Is managed care helping or hurting sales?
    • Are your products on formularies with favorable reimbursement status? Any major issues?
    • Can you see the influential and high volume prescribers in your territory (access rate)?
    • Have you met your manager and is it somebody you feel you could trust and work with?
    • How successful has your manager been from a sales perspective?
    • Does your manager have a District of sales superstars or average performers?
    • How many people has your manager had promoted?
    • What are the job expectations?
    • How will your performance be measured?  (e.g., sales, customer feedback, activities)
    • How are territory sales measured and how accurate are the reports?


Seasoned pharmaceutical sales reps could contribute more and perhaps even more germane questions than I have provided here.   I hope, however,  these questions at the very least,  stimulate thinking and will help formulate a more fact based process for people considering a job or career in pharmaceutical sales.  If this is a career decision for you, a more thorough assessment is warranted, especially for the impact of the ever-changing healthcare market on your products, your company, and your job function.  I would suggest writing out answers to your questions as this can help take the emotion out of the process, will generate additional follow-on questions, and will help keep your decision more factually grounded.  If you are  exploring pharmaceutical sales as just one of many job options,  you might take a different, perhaps less analytical, approach to your decision.   In the end, if you finally decide you would like to become a pharmaceutical sales representative, before taking the job I would recommend you talk with a current sales representative, preferably from the hiring company.  mike@pharmareform.com

Five Underappreciated Contributions from Pharma

In my previous post I pointed out the Five Irreparable Mistakes made by Pharma.  At the same time, many patients owe their health, if not their lives, to advances in drug therapy.  The good is often overshadowed by the unethical and greedy, if not illegal activities and behaviors that make the headlines.  Here are some of the “good” that have been mitigated by the bad:

  1. Treatments for most common diseases

Decades of drug discovery and development have filled pharmacies and our medicine cabinets with a broad range of treatments for many of the common diseases that can compromise our health today.  Most of these are now available as low cost generic drugs.  Sure there are diseases yet to be conquered and recent R & D productivity has been disappointing but we still have to appreciate the numbers of affordable drug treatments we have available to day.

  1. Technology acquisition and development

There is no doubt that without pharmaceutical industry funding and development expertise, we would not have seen the benefits from technologies that would have otherwise remained hostage to under-funding in university laboratories or small biotech companies.   Depleted pipelines in the past decade forced Big Pharma to abandon the NIH (not invented here) research mentality and aggressively pursue acquisition strategies.  To the benefit of patients around the world, Pharma pulled out their checkbooks, took the financial risks, and in many cases, over paid for promising but unproven technologies.

  1. Medicine for the poor

It is easy to criticize the pharmaceutical industry for their seemingly greedy pricing policies and taking advantage of their monopolistic hold on drug treatments.  It is also important, however, to recognize that the industry has done a lot to offset costs for the poor and elderly but even more importantly, making sure that the poor in developing countries have access to drugs they need.  OK, they could have done more and could do more but you can not ignore the free medicines, discounted treatments, and global in-kind disaster support.  And let’s not forget the often criticized sampling programs that often meant the difference between a patient taking medicine that they could not afford or going without treatment.

  1. Continuing Medical Education

Despite the concerns and criticism about whether or not pharmaceutical industry CME is or was promotional and biased, the contribution the industry has made to educating healthcare providers is undeniable. The pharmaceutical industry helped educate millions of healthcare providers not only about drug therapy but about the associated diseases.  While you might debate the quality of the programs, it is clear that academia and the medical profession will have a hard time replacing the numbers of programs and frequency of reaching the numbers of physicians exposed to educational programs by the pharmaceutical industry.  Even if you discount industry sponsored programs for their promotional, biased approach, at the very least, these programs encouraged and provided regular opportunities for healthcare providers to reflect on and do their own research about a broad range of drug therapies and diseases.

  1. Providing a venue for Scientific Excellence

The pharmaceutical industry has provided a fantastic place to train, develop, and apply scientific and technical expertise.  From research and development to manufacturing, science is at the foundation of operational performance excellence.   In the end, pharmaceutical industry training and application of science leads to products and programs that positively benefit mankind in ways that are unmatched by other industries, except perhaps, by healthcare itself.

So for all the notable greed-driven bad behaviors and mistakes that characterize the pharmaceutical industry today, we should not forget the good that has been done.  Unfortunately, the pharmaceutical industry had the chance to be the most respected and valued industry in the world while being embraced, not begrudged, as the most profitable.  Still a laudable goal but one that will take decades to recover from past indiscretions and to demonstrate consistency of good behaviors over time while delivering clinically meaningful breakthrough drugs that can satisfy the remaining unmet medical needs.   mike@pharmareform.com

Less Regulation for the Pharmaceutical Industry

I have always been perplexed by the contention that we need less government regulation and more lenient regulatory enforcement in this country, including in the pharmaceutical industry.   Proponents of less government regulation often make their case by proposing to “get government out of private sector business and let the market decide.”  They point to the unnecessary costs, business hardships, and ineffectiveness of government regulation.

We hear about “too much government” until something happens.  Something bad enough to negatively affect a large number of people.  A financial system meltdown, security breach that compromises their safety, or when people take advantage of them through deceptive marketing practices or fraud.  You really hear about the need for more government when people die unnecessarily due to a faulty or poorly manufactured product or a blatant disregard for health and human safety.  Then you hear “where is the government?” “isn’t there a law against that?” and “I’m going to sue.”

For years I have wondered how compounding pharmacies that scale to the size of drug manufacturers could operated without FDA oversight of their manufacturing processes.  Just leave it to State Boards of Pharmacy to monitor.  How “nutritional supplements” could make the health claims pharmaceutical companies could not make without rigorous clinical trials and FDA approval.  Do they really do what is claimed and do no harm?  How device companies could merely claim their product was “substantially equivalent” to an already marketed product to get on the market.  Does it really matter that pharmacies can sell drugs over the internet?  Why should I need a prescription?  Does it matter that the pharmacy operates out of another country or that the drugs I get are counterfeit?  Should it really be ok to create billion dollar blockbuster prescription drugs by marketing them for unapproved claims for patients who might be putting their lives at risk for no benefit?  Less government regulation and limited enforcement make these all possible, today.

The pharmaceutical industry and healthcare market have proven that business enterprises and individuals will push the limits of the law and even ignore the law to make a buck.  That doesn’t mean we should just get rid of government regulation.  In fact, less government regulation and diminished enforcement merely create even more opportunities without negative consequences for fraud, for dangerously marginalizing manufacturing quality, and for the unscrupulous to take advantage of consumers, regardless of how informed or well educated the consumer might be.   Less government regulation and limited enforcement in a “buyers beware” market is not an acceptable commercial environment, especially for the pharmaceutical industry where patient health, safety, or lives are at stake.

So what’s my conclusion?  We need government agencies to do a better job of enforcing the laws that are already in place. We need them to work with law makers to eliminate laws that are no longer doing what they were intended to do when they were adopted.  We need law makers to do a better job of drafting legislation (have you ever read a page of Final Rules in the Federal Register?) to protect consumers.  But what we need most is for businesses and individuals to quit “gaming the system” with wealth building strategies based on taking advantage of lax regulatory enforcement and the unaware or mislead consumer.  mike@pharmareform.com

Mindset Change Needed for Re-Engineering Pharmaceutical/Biotech R & D

In the previous post and in the book Pharmaplasia I suggest a need for a new approach to pharmaceutical R & D.  There are two essential elements to this proposal.

The first has to do with scientific and corporate integrity.  If the research scientists and corporate executives are not honest about what you have and what you have seen in drug development (if their priority is to protect the “potential“ of your compounds), you can’t make good decisions about your pipeline products.  Research scientists or corporate executives trying to preserve compound “potential” by strategically navigating around potentially damaging data, half-truth disclosures, or blatantly ignoring negative results and their implications can easily sabotage any corporate effort to produce a more robust pipeline with a higher probability of success.  The second essential element will be meaningless if this first element is ignored.

The second essential element:

Know more about your compounds before they go into Phase III clinical trials.

A more comprehensive basic science understanding of your compounds before they enter the clinic, especially expensive Phase III trials; can increase the probability of success.

For safety, this requires an aggressive exploratory preclinical program that “looks for toxicity” (going well beyond the regulatory requirements) and understanding what you find and what you see … not just being able to explain it away.

From an efficacy and safety perspective, if your compound affects one biologic system, what other systems does it affect? Have you really looked or have you been focused on “getting an indication?”   Do you have the basic science data to support the premise/hypothesis for efficacy (or comparative superiority)?  Have you scientifically challenged the premise with alternative outcome possibilities with data to support the different probabilities?   Or, is it still just a hypothesis you plan to prove in Phase III?  Are you sure you have the right endpoints for your Phase III trials?  Have they been sufficiently validated (high probability statistics) in Phase II studies?  By this I mean, have you done more than just a couple of regulatory required trials?  Have you looked at design alternatives that could affect outcomes for different endpoints options?

This strategy may take longer.

But, rather than how fast can you get how many compounds into patients and to the market, research teams and corporate executives need to shift their mindset to increasing the probability of success.  You can do this with a more comprehensive approach to preclinical research.  Thoroughly understanding how your products are going to perform in Phase III trials (or comparative trials) before the trials commence.  Eliminate the “surprises” with better, more comprehensive science around the products.  Be exhaustive in exploration, honest about the findings, inclusive of interpretations, and have better data to support the “go forward” premise or hypothesis.  This all may seem like a simplification but if you’re interested in a more elaborate discussion, I invite you to read about the need for pharmaceutical R & D change and recommendations for change in Pharmaplasia.

Sure there will still be failures, but they should be fewer.  But perhaps the biggest benefit from this approach is the potential for new discoveries of safer, more effective products.  Better diagnostics, more definitive efficacy benefits (maybe we are looking at the wrong endpoints), and advances in the understanding of human biology await this new Pharmaceutical R & D model.  Not to mention, less contentious regulatory reviews, renewed hope for patients with difficult to treat diseases, and more certainty for the investment community.  mike@pharmareform.com

Five Predictions for the Pharmaceutical Industry

I don’t pretend to have a crystal ball but trends and evolving patterns can lead one to predict pretty accurately what is going to happen in the future.  As the predictions in Pharmaplasia have pretty much come to pass and continue to play out,  I decided to take another shot at formulating what appears to be in store for the pharmaceutical industry over the next five to ten years.  So here goes…

  • Big Pharma investors will become less tolerant of multi-billion dollar mega-acquisitions of companies and technologies that benefit executives, bankers, and lawyers but do little to improve the acquiring company.  Investors will no longer accept excuses when these overpriced deals don’t deliver on the expectations and promised returns.
  • Biotech investment will continue to decline as investors become increasingly rigorous in their due diligence, identifying true innovation with meaningful clinical potential rather than investing hopefully in purported innovation hyped by articulate CEOs looking to win the “buy-out lottery.”  With the first prediction in play, there will be fewer “buy-out lotteries” to be won.
  • The continued product focus of pharmaceutical R& D is leading to a prolonged period of fewer truly innovative clinically important new treatments.  The acquisition opportunities for development-ready, truly innovative technologies in small biotech companies will slow dramatically.   And,  merely shooting at “disease targets” with chemistry, without a comprehensive understanding of the pathophysiology of disease, leads to a “hit and miss” mentality, lacking in appreciation for the complexities of human biology.
  • The market will continue to experience significant drug shortages until the healthcare market is willing to pay prices that support high quality cGMP-compliant manufacturing and the pharmaceutical industry (including generic drug companies) realizes that high quality cGMP-compliant manufacturing is a critical success factor, important enough to make the necessary investments to consistently sustain it.  This is difficult for Pharma executives because manufacturing has always been the place to look for operational cost cutting and investment in manufacturing expertise and systems is not as “sexy” or newsworthy as placing a big bet on a “hyped up” new drug technology to excite Wall Street analysts.
  • Unfortunately, the pharmaceutical industry will not have the necessary experience base or leadership to navigate this perilous journey.  Downsizings, retirements, and industry changing career choices have diminished the necessary operational (think research and manufacturing) experience and expertise from the industry.   And, those who have survived and aspire to take on leadership roles have mentored during a period characterized by “me too” drug and acquisition driven R & D, questionable (if not illegal) marketing and sales tactics, and a corporate priority for investor interests over patient well-being.   Not exactly the development track you’d prescribe given the organizational challenges  and the complexities of the evolving healthcare market these new leaders will face.

Realistically facing the prospects for the future can help identify opportunities for changing what isn’t working and developing plans to take corrective action, if necessary.  If you don’t believe my predictions are valid, or you believe I have been to negative, then there is nothing to change.  Big Pharma can continue doing what it is doing.   Seems to me  that’s been the consensus position for some time now.


Completely Eliminating Pharmaceutical Company Financial Conflict of Interest

A guest post in Forbes by Dr.Tom Yates, a UK-based physician, challenges the disclosure statements in two review articles on anticoagulant therapies published in the September 2011 edition of the Quarterly Journal of Medicine.  Dr. Yates also seems to dismiss peer-review as a safeguard and essentially suggests that despite disclosure statements and the peer-review process, any funding by sponsors (pharmaceutical companies in this case) of authors or for editorial assistance for review articles will bias the information presented and will result in an unbalanced assessment of the therapies being evaluated.  He doesn’t critique the papers or their conclusions, admitting that that he is “not an anticoagulant expert.”

In the Forbes blog published letter response to the journal, Dr. Yates’ expectations regarding conflict of interest and the potential for bias are reflected in the following statements:

“In answer to Prof Hobbs’ question [2], I believe it is important that clinicians are able to access review articles on this topic. However, they should be written by authors who have no financial relationship with the companies who make the products under discussion.”

I don’t believe Dr. Yates is alone in his thinking.  I do wonder, however,  if  Dr. Yates and his like-minded colleagues have considered the practicalties of completely eliminating the potential for financial conflict of interest.

  1. There are few therapeutic area relevant clinical experts (not just those who are self proclaimed) who could meet his expectations for independence.    As suggested in his statement above, the only people who could publish review articles are those who have never received any financial support from a pharmaceutical company that has a product in the therapeutic category being reviewed.  That would have to include pharmaceutical company sponsored clinical study investigators, consultants, and advisers.
  2. Only clinical studies that have been independently funded (self funded, government funded, or funded by an advocacy group that accepts no pharmaceutical industry support) could be included in the publication of therapeutic reviews. To accept results from pharmaceutical industry funded studies done by investigators supported by the pharmaceutical company in a review would further propagate the conflicts of interest and biases inherent in the original publications.
  3. Only unconflicted, qualified authors (no potentially biasing financial support from any benefiting organization, be it pharmaceutical companies or therapeutic area advocacy group) could initiate the drafting and publishing of reviews and they would have to seek their own editorial support (including graphics and formatting) at their own personal expense.
  4. Peer reviewers for journals would have to be held to the same independence and conflict of interest standards as they have the potential to introduce their personal biases in their feedback and commentary during the peer review process.   Perhaps then these conflicts would also have to be disclosed in the review article as well.

Here are some things to think about in the context of espousing Dr. Yates’ position:

  1. There are probably too few independently funded clinical studies that are large enough to adequately provide data to do a meaningful review for any therapeutic category or class of drugs.
  2.  “… authors who have no financial relationship with the companies who make the products under discussion” probably don’t have sufficient, statistically relevant, independently funded, personally developed  “controlled clinical data” to support their “independent conclusions.”  Peer-review would have to eliminate any inferences or conclusions that reflect personal biases or opinions from their anecdotal clinical experience that are not supported by statistically relevant clinical data.
  3.  As a result of points 1 and 2, very few review articles could be published.  In fact, I’m not sure there has ever been a clinically helpful therapeutic class review article that is completely void of financial conflict of interest and bias as suggested by Dr. Yates.

Unfortunately, history has demonstrated that we can no longer rely on the integrity of investigators, authors, peer reviewers, and editors to assure us that the implications and conclusions in a review article are valid and were not financially influenced.  Therefore, we have to depend on the disclosure statements and rigorous peer-review to mitigate the potential for financial conflict of interest and bias in scientific and medical publications.

Completely eliminating financial conflict of interest might be impossible and even if achieved has its own negative consequences. You would get reviews done by unconflicted experts who have little or no personal,  controlled clinical experience with the products discussed.  This being the case you really have to wonder “are the experts really experts?”   Their conclusions could only be based on their personal interpretation of financially biased industry supported clinical studies, perhaps some small self funded statistically meaningless studies, or worse, their own anecdotal clinical experience.  Where else would they get the data to support their conclusions?

As a result,  I still believe that honest,  full disclosure and rigorous peer review are better solutions than trying to completely eliminate financial conflict of interest. mike@pharmareform.com

PharmaReform on Amazon Kindle


PharmaReform.com has explored a broad range of challenges and issues affecting the pharmaceutical industry.  The intent of the blog posts has been to encourage and stimulate thinking about how to address industry shortcomings while finding more patient- and healthcare customer-friendly approaches to marketing and selling prescription drugs in an increasingly complex business environment.

Reviewing the functional  diversity of running a drug company from manufacturing to research, the author provides an industry insider perspective to the commentary, suggestions, and recommendations for transforming drug companies into innovative profitable businesses in the evolving new healthcare market while reestablishing public trust and credibility.

Over 100 blog post articles, organized by topic (see Table of Contents),  are included in this e-book format (Amazon’s Kindle) providing a more convenient portable document for readers who prefer keeping, retrieving, and reviewing them as a reference.


Comparative Effectiveness and the SATURN study Comparing Crestor with Lipitor

Comparative effectiveness studies like the recently reported SATURN study comparing Crestor® (rosuvastatin) with Lipitor® (atorvastatin) sponsored by AstraZeneca may on the surface appear to be a big win for patients (and prescription drug providers) especially those awaiting generic versions of Lipitor (anticipated by the end of this year).  The reported preliminary topline results show a numerical advantage favoring Crestor but no statistically significant difference in the primary endpoint of the study (change from baseline in percent atheroma volume (PAV) in a ≥40 mm segment of the targeted coronary artery as assessed by intravascular ultrasound).

The apparent implication from these results is that there is no difference between Crestor and Lipitor and therefore, when available, generic atorvastatin will work just as well as the brand Crestor.  Extrapolating this “no difference” conclusion for a single endpoint to the totality of efficacy for atorvastatin could result in significant cost savings for patients and providers of prescription drug benefits.  You would think this is great news for patients but I believe the ramifications of this study go well beyond cholesterol lowering agents and the impact on future sales of Crestor.

Because of the investor interest, high media visibility, the enormous healthcare cost savings potential, and the mass market served by cholesterol lowering agents I believe there will be significant fallout from this study that is not necessarily beneficial to patients.

First, there are undoubtedly going to be patients who could benefit from Crestor rather than atorvastatin but who will not be given that option.  Smaller patient populations may never be studied well enough to determine if there really are patients who might benefit from one product or another in the face of large comparative trials showing no statistically significant difference.

Second, company executives have always been, but will now be even more, reluctant to sponsor comparative effectiveness studies for established products even when they feel they have an opportunity to demonstrate a difference (as I believe was the case for AstraZeneca).  The requirement for “statistically significant” clinically meaningful differences may be too high a hurdle (and represent too much risk) when complex trial designs are expected to prospectively identify a specific primary endpoint for a patient population with considerable variability.  We may, in an ideal world, feel we know enough about biology, disease pathophysiology, pharmacology, and the nuances of patient populations to be able to precisely design these definitive trials, but we probably don’t for most diseases.

Third, pharmaceutical companies may prematurely stop developing drugs they feel might not be able to demonstrate statistically significant differences to available therapeutic agents.  This would have been a catastrophe for antivirals HIV/AIDS treatments which we now know work best as cocktails of several products rather than one being “statistically  significantly “ better than another.  To further complicate this, regulatory approval studies are designed to establish efficacy and safety, not superiority.  I believe the need for demonstrating a statistically significant difference to meet market expectations and regulatory requirements for making a superiority claim (or to potentially gain approval) will make drug development near impossible where products already exist and efficacy is well established.

And if you are thinking about developing an as effective but “safer” product, good luck.  Regulatory requirements for claiming “safer” are even more challenging and from what I have seen, near impossible.

Lastly, this market expectation for demonstrating “superiority to available treatments” and regulatory requirements for making those claims, I believe will result in fewer therapeutic options for treating specific diseases (think antibiotic drug development over the past decade).  We are getting to a point where if a product is already available to treat a disease,  clinicians and payers want to know if your new product is better.  You would think this is not an unreasonable expectation, but it is an expectation that increases the cost, complexity, and uncertainty of drug development.

At the same time, pharmaceutical companies that demonstrate statistically significant differences for their branded products in comparative effectiveness trials will be able to command “super premium pricing” with an almost monopolistic “treatment of choice” position for the duration of their patent.  When a product demonstrates a clear benefit (statistically significant) over other treatments the bar is  raised for subsequent new products to demonstrate statistically significant superiority.  For products with trial supported superiority, regulators will have no choice but to allow superiority claims,  physicians will have little choice but to prescribe the product, and payers will have little choice but to provide reimbursement.  Unfortunately,  this also dampens drug development interest in therapeutic categories that already have well established “treatments of choice.”

And while we may have more effective and potentially safer products in the future,  if you think prescription drug prices are high now, just wait for these products that establish “treatment of choice” with clinically meaningful statistical differences.    mike@pharmareform.com

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.   mike@pharmareform.com