Tag Archives: reform

How not to Build Trust and Confidence in ObamaCare

I subscribed to the CMS (Centers for Medicare & Medicaid Services) e-mail newsletters to stay up to date on what is going on and to make sure I get the information I need when it comes time to figure out what to do come October 1, 2013.

Well, a couple days ago I get an e-mail informing me of the “10 Healthcare Benefits Covered in the Health Insurance Marketplace” linked to a post at HealthCare.gov.  In a headline at the bottom of the page they encourage me to “Create an Account” so “When open enrollment starts on October 1, 2013, you’ll be able to apply, compare plans, and enroll in the Marketplace.”

OK, so after six or more tries (I didn’t think I’d have to count) I’m finally signed up.  It isn’t that tough and it is only three pages of simple questions with easy things to fill out, like your name, state, email address, username and password, and three security questions.   I can understand when I had to change my user name because it wasn’t long enough but to have to start completely over to make that one change was a little frustrating.

I am certain the average person doing this isn’t going to try as many times as I did, especially if you have to fill out the entire thing (not just correct the mistake) every time it rejects you. Worst is when everything is ok and you keep getting a “Try Again Later” message.  Remember, to “Try Again Later” you have to start all over.  At that point, I was doing this just to see how many times it would take to get an account created.  Most people would probably have given up after the second time they got rejected and had to redo their info.

So besides the frustration this creates and the potential to lose the people who just give up, it diminishes trust and confidence.  If you can’t even get a simple account set up for me, what is it going to be like to actually apply for insurance, and how in the world am I going to be sure you can get me healthcare when I need it?  What other hassles do you have in store for me?  mike@PharmaReform.com

Important Update:  Thank goodness, I got my account because a day after writing this they closed The Health Insurance Marketplace website for “upgrades” until October 1, 2013.  Even though I have an account in the old version, I’ll probably have to start over in the “Upgraded” version.  What do you think?

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.


Healthcare Reform and Generic Drugs will Drive Branded Prescription Drug Prices Higher

Recently, in one month, the price of my branded prescription drug for high cholesterol went from $130 per month to $145 per month at the same pharmacy.  Yesterday I changed to a generic drug alternative (not the same as the brand I was taking) which will cost me $4 per month after joining a $20 per year prescription savings club.  I now get more than two years of medication for the price I was paying for one month of the branded product.  Assuming I will be able to control my cholesterol with this new medication (no reason to believe it won’t as I have taken most of them over the past several years),  at $1 per week it is hard to complain about the high price of prescription drugs.

So why was I even paying $130 in the first place, when generic alternatives were available?  Well, when I had prescription drug coverage through my employer provided insurance,  my co-pay for the branded products was about $20.   I not only didn’t think about the actual price of the drug but I didn’t even care to know what it would have cost without insurance.   Generic drug alternatives didn’t enter the thought process.  Besides, how much lower priced could the generic drug be? More recently, until the price increase,  I just kept getting the prescription filled even though it seemed expensive at $130 per month.

Fortunately my physician agreed to try me on the generic alternative.  For once I also felt fortunate that I was not covered by a government program (e.g., Medicare, Medicaid, and TRICARE) which would have made me ineligible for this savings club and these generic drug prices.  There is a wide range of therapeutic categories with over 400 generic medications available from this pharmacy prescription savings club priced at $12 for a 90-day supply (or $9.99 for 30 days).  Again, hard to suggest these prices are unreasonable and they certainly are not expensive in the context of most prescription drug price discussions.  Even without the savings club membership the price would have been less than $30 per month.

Despite the fact that over 70% of prescriptions in the US are now filled with generics drugs, I can’t help but to think from my own experience that there are still a lot of people who could financially benefit from a switch to generics.   I also believe healthcare reform will bring significant cost pressures to get more patients converted to generic drugs.  The Congressional Budget Office reported that in 2007, if all of the 45 million Medicare Part D prescriptions filled with multiple-source brand-name drugs (brand name drugs with generic alternatives) had instead been filled with their generic counterparts, an additional $900 million would have been saved.  And that is without considering therapeutic substitutions (as my case would be considered) or the potential savings from the blockbusters now coming off patent over the next few years.

The biggest downside for patients resulting from this healthcare market evolution to encouraging the use of more generic drugs is that if you need one of the innovative branded products for which there is no good generic alternative, you are going to pay much higher prices than you might have in the past.  If my generic cholesterol lowering agent isn’t as effective (or has more side effects) as the branded product I was taking, I’ll be back to paying the $140 per month.

I believe two factors will drive branded product prices higher with healthcare reform.   First, truly innovative treatments that deliver real clinical value and unique therapeutic benefits will command a premium price because they will be deemed worth paying for and taking.   Second, more generic drugs and more patients taking generic drugs will shrink the market for branded products to people who absolutely need the branded products.   Drug companies will have to exact their profits from fewer products that can deliver these unique therapeutic benefits to much smaller patient populations.   Companion diagnostics will further reduce these already small populations of patients, by identifying responders and eliminating those who might experience side effects.

So the good news for patients is there will be more generic drugs available at low prices resulting in lower costs to government programs (tax payer benefit), private insurance (keeps co-pays lower), and patients.   Pharma companies on the other hand will be able to, and will have to, charge even higher prices when patients need their innovative branded products.

Disclosure:  I am not compensated  by the prescription savings club.  The link is included here only as a reference.


Another Challenge for Healthcare Reform and the Pharmaceutical Industry

The recent CDC report on how poorly we are doing in preventing the leading cause of death in the US, cardiovascular disease, despite the availability of inexpensive effective treatments, is pretty disappointing.  It is probably a good surrogate for how people think about illness.

If the symptoms are silent and merely precursors for what might happen, people tend to be indifferent and less interested in paying any associated expenses.  If they are sick with symptoms that are uncomfortable, make daily activities impossible, or they are told they are dying from the disease, they will do just about anything and pay just about anything to eliminate the symptoms or disease.

I believe this reflects both a healthcare systems failure and tremendous patient apathy that suggests they don’t feel responsible for expenses (thinking either insurance or the government should pay) related to the consequences of their own poor health.

The report concludes:

“Although treatment of high blood pressure and high cholesterol is very effective and relatively low-cost, most people with these conditions remain at elevated risk for heart attacks, strokes, and other problems.”

  • By the Numbers – High Blood Pressure
    • 1 in 3 Adults has high blood pressure
    • 1 in 3 Adults with high blood pressure does not get treatment
    • 1 in 2 Adults with high blood pressure does not have it under control
  • By the Numbers – High Cholesterol
    • 1 in 3 Adults has high cholesterol
    • 1 in 2 Adults with high cholesterol does not get treatment
    • 2 in 3 Adults with high cholesterol do not have it under control

The insurance coverage focus of healthcare reform will probably make little difference in these numbers.  In this same CDC report, it is noted that more than 80% of patients who lack control of theses cardiovascular disease symptoms already have insurance.  Additionally, the cost to treat these conditions is relatively low with many highly effective treatments now available as inexpensive generic drugs.

Unfortunately, over the past several decades while healthcare provider systems battled Pharma companies over drug prices and Pharma companies focused on driving the market for “new prescriptions,” a huge market of untreated and ineffectively treated patients was building.

Why should we care?

Well, Pharma should care because there are tens of millions of potential patients yet to be treated.  Perhaps not all these potential patients will be willing or able to pay high prices for branded products but some may and will.

More importantly, beside the thousands of people suffering debilitating consequences or even dying prematurely, this same CDC report notes that cardiovascular disease costs the nation $300 billion each year.

So how do we improve and expand the treatment of patients with high blood pressure and high cholesterol?

The CDC report includes several suggestions and recommendations for programs, systems, and incentives for prevention and improving the treatment of cardiovascular diseases.  Unfortunately, many are similar to tactics being deployed today, previously suggested, or that have been tried before.

I believe the solution to this dilemma is to make the patient take responsibility for their health.  Pharma companies can make effective treatments available, physicians can prescribe the life style changes and medications, insurance companies and the government can pay for the treatments.  But, if patients don’t seek out and comply with the life style changes and treatment regimens, there is little the rest of the healthcare provider system can do to help patients prevent cardiovascular disease.

So how do we get patients to take responsibility?  This may be a little radical but what about making patients personally,  financially responsible for the consequences of not seeking diagnosis and treatment or complying with their treatment regimens.  If you have high blood pressure or high cholesterol and you choose not to find out (get checked) or be treated or not to be compliant with your prescribed treatment (including life style changes), that’s fine,  but you become personally responsible to pay for any medical expenses related to your heart attack or stroke.

While people have a hard time appreciating the health consequences of a heart attack or stroke until it happens, they seem to understand the financial consequences without experiencing the event.  That is why people buy insurance and why health insurance is so important to them when seeking employment.  They can relate to the financial implications more than the health consequences.

Want more patients to have their high blood pressure or high cholesterol controlled?  Make them financially responsible for the consequences of not seeking treatment and not staying in control of their disease.


The Impact of Repealing Healthcare Reform on the Pharmaceutical Industry

There is plenty of discussion, debate, legal maneuvering by state governments, and media coverage dedicated to the potential repeal of healthcare reform legislation in the US.  While many feel comprehensive rejection of the bill is unlikely, others suggest there are several components of the reform legislation that should be redrafted or eliminated outright.

Without getting into all the nuances (e.g., implications of electronic health records or accountable care organizations) of the legislation, the major healthcare reform implications for the pharmaceutical industry include:

  • Commitment for fees, rebates, and discounts totaling over $100 billion over 10 years
  • Additional 30 million potential patients with insurance and drug coverage

Agreements and other negotiated benefits for the pharmaceutical industry:

  • 12 years of data exclusivity for biologics
  • No direct government negotiations on pricing
  • No reimportation of less expensive drugs from foreign countries

So, for pharmaceutical companies, does it really matter if the healthcare reform bill is repealed?

To answer this you have to look beyond the next couple of years and any politically driven tweaks to the legislation that might take effect as a result of trying to pacify special interest groups, including insurance companies, advocacy groups, and state governments.  Any near-term implications don’t and won’t change the fundamental realities of where the US and global healthcare markets are trending.  These realities include:

  • plenty of inexpensive generic drugs to treat many mass market diseases
  • an increasingly cost conscious managed market with direct or indirect (mandatory discounts and rebates) price control tactics
  • increasing market expectations for premium priced new products to deliver clinically meaningful benefits over other available therapeutic options (with sophisticated expert reviews of new treatment options)
  • increasing demands for definitive pharmacoeconomic data to support the relative value of premium priced new products

Any near-term changes, repeals, or tweaks to the US healthcare reform legislation will not impact these fundamental market expectations.  Interestingly, the more the US market moves to a single payer model with increasing government involvement, the more these expectations will drive the prescription drug market.

Regardless, I believe the implications of any repeal of healthcare reform will be inconsequential in the context of the long-term business model implications for the pharmaceutical industry.  Yet, it’s scary to think about the amount of lobbying money being spent right now by big drug companies and the industry to influence this legislation.

I’m sure there are also teams of people at pharmaceutical companies right now working diligently trying to forecast and model all the permutations of legislative repeal.  While a necessary exercise (don’t want to miss an opportunity or provide Wall Street with flawed financial guidance), a laborious review could be a huge distraction and probably a waste of time in the context of what needs to be done for the long-term.

The real focus for pharmaceutical companies should be on enhancing and bolstering their discovery research.  In the end, the pharmaceutical industry and drug company success will be determined by finding better more efficient ways to deliver products that satisfy a much more demanding market that has higher expectations for therapeutic benefits and value.  mike@pharmareform.com

Top 5 Pharmaceutical Sales Representative Posts at Pharma Reform

It has been 18 months, over 100 posts, and 260 comments.  Here are the top 5 most viewed pharmaceutical sales representative related posts:

  1. Who is Killing the Pharmaceutical Sales Position?

  2. What does your CEO think about Pharmaceutical Sales Representatives?

  3. Lasting District Sales Manager Advice for his Pharmaceutical Sales Representative

  4. Healthcare Market considerations for Eliminating Pharmaceutical Sales Representatives

  5. Professional Pharmaceutical Representative Compensation

Thank you.  mike@pharmreform.com

Quit Blaming Drug Companies for Healthcare Market Prescribing and Reimbursement Decisions

Pharmaceutical industry marketing and sales are often blamed for promoting  “off label” prescribing and have been highlighted in prescription drug fraud and product liability cases.

If the healthcare market, industry critics, regulatory agencies, and patients are looking for a way to control and reduce the influence of pharmaceutical company advertising and promotion on prescription drug choice, they should step up and take responsibility for the decisions they are making.  Don’t blame the drug companies for prescribing and reimbursement choices being made by the healthcare market.

Nobody is forcing physicians to prescribe these drugs.  Nobody is forcing insurance companies or the government to reimburse prescriptions written for “off-label” uses.  Nobody is forcing patients to take drugs for unapproved uses or to take drugs that might result in side effects or adverse reactions.  These are all conscious choices.

Information about the appropriate use of prescription drugs and the known potential risks associated with taking these drugs is readily available in the prescribing information (FDA approved label claims or package insert) for each drug.

One would think that prescribing decisions would be based on careful evaluation and assessment by the healthcare market, physicians, and patients and not driven by the influences of pharmaceutical company marketing and sales activities.  How irresponsible is it for physicians, government agencies, or insurance companies to accuse drug company advertising and promotion for determining their prescribing practices or reimbursement policy rationale?  It is also not credible to suggest the government (including state agencies) and insurance companies are being duped by drug companies and are blindly reimbursing for drugs prescribed for “off-label” uses.

So how should this be working?  (I am not trying to be a lawyer here, just proposing how it should be working)

  • When a physician and a patient decide to use a product, it should be implicitly acknowledged that they are aware of and understand the information in the product prescribing information (FDA approved label claims and safety information).  If the patient does not understand the information in the product label or the implications of the wording in the product label, it is the physician’s responsibility to help them understand the potential risks and benefits.
  • The patient has a choice to take the drug or not based on the information they receive from the physician (and they can read the product prescribing information themselves, if they want to).  By deciding to take the drug, patients acknowledge they are aware of the potential for side effects and adverse reactions and accept these risks (shouldn’t be able to come back and sue the pharmaceutical company for something that is in the package insert).  They have made an informed choice to accept the risks.
  • Pharmacists, before dispensing a prescription, should make sure patients understand how to take their medications and the potential side effects, adverse reactions, and food or drug interactions.  Dispensing pharmacists should be accountable for making sure patients understand the risks.
  • Physicians should prescribe products only for the FDA approved label claim indications.  Physicians who prescribe and patients who decide to take a drug for an “off-label” indication or use should assume the product liability for how the patient responds to the drug (lack of efficacy or any resulting side effects and adverse reactions). They have made a conscious informed decision and choice to prescribe the product for a use for which the manufacturer has not obtained sufficient evidence of safety or efficacy (FDA approval).
  • Government programs (e.g., CMS), private insurance companies, healthcare provider plans (including state government programs), and pharmacy benefits managers should reimburse only for FDA approved label claim indications.  By providing reimbursement for “off-label” uses, I believe they are complicit in the promotion of “off-label” use of prescription drugs.  The lack of reimbursement makes the promotion of products for “off-label” uses much less attractive for drug companies.
  • Insurers (private or public) who provide reimbursement for off-label uses of a product should assume all product liability for its “off-label” use, including lack of efficacy or any resulting side effects or adverse reactions. (can’t come back and sue the pharmaceutical company)
  • Insurers (private or public) who agree to reimburse for “off-label” use of a product should not be able to sue for false claims or fraud related to that “off-label” use.  The insurer knows the physician has made a conscious decision to prescribe the product for an “off-label” use, the patient has been informed of this decision and how it was reached (discussion with the physician), and the reimbursing insurer has the prescribing information against which to evaluate their decision.  By providing reimbursement, the insurer acknowledges agreement with these decisions and should accept the potential liabilities.

If the healthcare market, insurers, physicians, and patients don’t want to be influenced by drug company advertising and promotion, they can simply take responsibility for the drug treatment choices and reimbursement decisions they make.  The ready availability of FDA approved prescribing information leaves little excuse to be unduly or inappropriately influenced by drug company marketing and sales activities.  In fact, isn’t it embarrassing to admit that prescribing and reimbursement decisions are based more on pharmaceutical company marketing and sales than medical information and clinical judgment.

So quit blaming drug companies for prescribing choices and reimbursement decisions.  mike@pharmareform.com

Pharmaceutical Representative Magazine Publishes Review of Pharmaplasia™

Pam Marinko, cofounder of the Atlanta Medical and Pharmaceutical Representative Association and a member of Pharmaceutical Representative ‘s advisory board gives Pharmaplasia™ 4 of 5 stars in her review in the December 2010 issue of Pharmaceutical Representative Magazine.

“Having been in Pharma most of my professional career, I appreciate the author’s perspective and fact-referenced historical account of pivotal events.  Even though I don’t agree with some of the conclusions, they could stimulate some great conversations.”

Pam Marinko, Pharmaceutical Representative Magazine, December 2010


Pharmaceutical Company Restructuring Considerations for the Future

In the last post we discussed how Big Pharma might have avoided having to lay off so many of their loyal employees had they done a better job of managing their business for the long-term.  Well, easy to look back and criticize but how about looking forward?

Here are some things for Big Pharma executives to consider as they restructure for the future:

  • No single blockbuster product can fix a dysfunctional pharmaceutical company.  It can only buy time to make the inevitable difficult but necessary changes.
  • The pharmaceutical market will become increasingly global with less regional variation in treatment practices, regulation, and pricing.
  • Unsubstantiated value of seemingly unjustifiably high prices will be met with market rejection, outright price controls, government price negotiations, and higher rebate expectations.
  • Relative to Big Pharma pipeline needs, Biotech will have a finite supply of clinically meaningful differentiated innovative products available for acquisition
  • Traditional marketing and sales activities will have little impact on prescribing behavior which will be more influenced by scientific rationale, demonstrated meaningful clinical benefit, and the impact on overall healthcare costs of treating the patient
  • Prescribing will be increasingly managed with “best practice treatment guidelines” prompted and monitored for compliance through e-prescribing technology
  • Electronic medical records with medical information systems driven algorithms will allow for real world assessments for determining relative therapeutic benefits and healthcare cost implications of treatment options
  • Financial incentives, cost management benefits, and more effective products and programs will drive a revitalized interest in making preventive medicine and medically prescribed life style changes a priority
  • Product and treatment assessments will be more rigorous, more sophisticated, and less easily influenced by Pharma companies unless they have  compelling real world clinical data to support their claims
  • Comparative efficacy will become a regulatory and healthcare market expectation
  • Therapeutic options will include stem cell, gene therapy, and synthetic biology- derived treatments.  Some may ultimately eliminate the need for chronic treatment in small molecule mass markets.
  • Drug-device and delivery systems will target treatments to specific disease targets, increasing efficacy at lower doses while reducing the potential for side effects and adverse reactions
  • Companion diagnostics and personalized medicine will be a regulatory, market, and healthcare provider expectation
  • Reliable, high quality manufacturing that ensures consistency and safety will be a differentiating feature for pharmaceuticals, especially for generic drugs
  • Affordability will eventually mean denying insurance coverage (private or government) for high priced drugs with marginal therapeutic benefit, especially those with minimal end of life benefits
  • To maintain profitability under intense pricing pressure Pharma companies will be forced to dramatically reduce their operating expenses (well beyond their current thinking)
  • Big Pharma companies that maintain their large organizational size will have less pricing flexibility and will be hampered in their ability to deliver innovation, ensure customer satisfaction, and avoid regulatory and legal missteps

So what to do now:

  • Pharma recruiting, training, and talent management must improve with a focus on expertise, competence, and integrity.  Hire and develop “the best” (e.g., world class scientific expertise, visionary leadership with integrity, highly skilled operations personnel) rather than just finding somebody who has done or can do the job.
  • Focus research on comprehensive understanding of diseases rather than just exploiting chemistry and disease targets.  Strive for preventions and cures rather than just developing another compound or molecule to get to the market.
  • The number of pipeline projects is only meaningful in the context of new market expectations.  Products that can not deliver clinically meaningful differentiation should be objectively reevaluated for commercial viability in a more demanding healthcare market. Fewer development programs will make it past this assessment if companies are truly objective and critical in their evaluations.
  • Pipeline target product profiles should define the potential “comparative efficacy“ and the meaningful clinical benefits relative to other therapeutic options
  • Identify and develop plans for securing the specific data needed to substantiate the claims of efficacy, safety, and “value”.  This is not just to meet regulatory requirements but to withstand rigorous, more sophisticated managed market expert assessments.
  • Make companion diagnostics a requirement for pipeline projects
  • Develop managed market expertise throughout the organization not just as commercial function.
  • Develop healthcare system collaborations that allow for understanding, designing, and executing comparative product and treatment assessments in different electronic medical records systems
  • Assume none of the traditional marketing and sales tactics will work (including social media) and then prepare plans for promoting your products in this new healthcare market. For example, think about how electronic medical records and best practice treatment guidelines will influence e-prescribing.  How will you educate a physician population without traditional tactics?
  • Assume that even your most aggressive cost cutting programs in operations will not be enough.  Root out legacy, non-essential expenses as if you were facing bankruptcy.
  • All non-core competencies should be critically evaluated as outsourcing opportunities
  • Invest in expertise, competence, integrity, and high performance systems and equipment to ensure consistent high quality manufacturing (if the company plans to continue manufacturing as a core competency). Invest and retool your processes now for the future.

Critical Success Factors

  • Innovative new products with companion diagnostics
  • Robust real world data to support clinically meaningful differentiation
  • Organizational managed market expertise
  • Talent management focused on expertise, competence, and integrity
  • Low cost, efficient yet reliable operations
  • Commercial programs designed to help healthcare providers and patients realize the full value of the company’s products
  • Become a trusted and credible source of disease and treatment information
  • Patient well-being must be a priority (e.g., patient safety more important than negative impact on sales or potential implications for litigation)
  • Leadership and organizational integrity

The intent here was not to draft a business plan but rather to identify some of the predictable changes of the evolving new healthcare market that will impact Pharma companies.  This was merely to demonstrate that it is possible to anticipate the changes we see evolving in the market and prepare for them if we look forward and take action now.

Now, I’m sure some of you are thinking… ” do you think we are idiots? You made me read all this for nothing.  Obviously, the industry and its executives are doing this.  We have strategic planning groups of MBAs working full time on this stuff.”

Well, I’m pretty sure industry executives thought they were taking care of the future back in the mid-1990’s as well.


Pharmaplasia™ reviewed in the context of Pharma Issues and Challenges

A review of Pharmaplasia™ was recently published as commentary to a discussion about well publicized issues and challenges facing the pharmaceutical industry noting:

“How did we come to this, and is there hope that these companies will behave differently moving forward.  That is the subject and basis for the book Pharmaplasia written by Michael Wokasch.  The book does a very good job of describing the history of the pharma industry, with emphasis on the past 20 years and the conditions under which the companies chose to pursue marketing tactics with such questionable ethics.”

“All these topics are well covered and discussed in ‘Pharmaplasia’.  For those interested or involved in the industry, it is an important book to read, and I’m very glad I did.”

Ralph Casale

The Motley Fool CAPS blog