Here’s a MedSpan Research tip!

Clinical pharmacists are a good deal for drug companies’ market research. Consider clinical pharmacists as respondents when needing clinical insights regarding a new drug. Remember that health plan and some hospital-based clinical pharmacists specialize by drug class. Other hospital-based clinical pharmacists specialize by patient care unit (e.g., emergency department, ICU).

Current and Future Situation for Brand Name Drugs

As discussed in my previous post, healthcare costs and spending are a concern right now for many Americans, and will continue to be a prominent issue in the near future. Some propose that the use of brand name drugs, as opposed to generics, contribute to these high costs.  An article on Medical Marketing & Media’s website discusses a projected downturn in branded drug spending by drug manufacturers throughout 2012 and 2013.

Although 34 new products were launched in 2011 by drug companies and spending on branded drugs grew 2.2%, the same kind of growth is not likely in upcoming years, and contractions in spending are even a possibility. The MM&M article states generic drugs now account for 80% of prescriptions.  So why would a rational consumer not go with a generic option?  Generic prescriptions have essentially the same active ingredients as brand name drugs, but can be a fraction of the cost.¹

Well, consumers are sometimes concerned a generic drug may not produce the same effects as a brand name prescription.  Among other factors, this definitely plays a role in loyalty to some branded drugs.  However, many consumers have no other option because they simply cannot afford to pay a price premium.

Manufacturers of brand name drugs need to prepare for decreased sales, not only because of expiring patents and increased costs, but also because of the trend of consumers utilizing less health care. If patients do not visit their doctors as often, they cannot renew their prescriptions or receive new prescriptions from their physicians. Gaining new customers and holding on to current ones will be more challenging than ever to these companies in the near future, but they will need to find a way to do so.

Written by: Jamie Notaro

Edited by: Ken Chiang

¹http://www.medicinenet.com/script/main/art.asp?articlekey=46204

FDA Oversight Abroad

Like many products consumed in the United States, many drugs are developed and manufactured outside of our country’s borders. A New York Times article from August of last year reports that more than 80% of active ingredients for drugs sold here are made elsewhere¹. In a recent House hearing, FDA Commissioner Dr. Margaret Hamburg stated that the FDA needs more resources in order to properly oversee the development and manufacturing of these types of products abroad. Modern Healthcare published an article describing these concerns the FDA has in regards to oversight of foreign-made drugs. Other issues such as drug shortages and pedigree are also mentioned.

FDA Deputy Commissioner for Global Regulatory Operations and Policy Deborah Autor is also mentioned in the article and states that action from Congress may be required to implement a national pedigree for drugs, which would track products from the manufacturer to the final buyer to ensure the integrity of the supply chain. Many states already have pedigree laws in effect, so the interaction of a federal clause and existing state statutes is something to be considered.  This type of action from the Food and Drug Administration and Congress could also have great effects on those companies that do produce drugs overseas. It may or may not cause them to need to make some changes to their supply chains, which could in turn raise the cost to produce a given drug.

These problems discussed in the article and at the hearing bring up an interesting dilemma. It seems a fairly universally agreed upon concept that the FDA should have the capacity to oversee the manufacturing of the drugs that are sold here in the United States, regardless of where they are made. However, would actions to give the FDA the resources it needs to increase supervision abroad make it more difficult for drug companies to produce their products at the same rate and for the same price? Which is more important: allocating resources to ensure drugs are being produced at the proper quality, or making sure there is enough of a given drug to provide for the need that is present? Drug shortages have been an ongoing issue of late, which could continue to worsen if certain drug manufacturing supply chains are interfered with.

The safety of both prescription and non-prescription drugs is key, that is unquestionable. But will the FDA really ever be able to keep track of the quality of every drug produced outside of the United States? Before taking any action, both the FDA and Congress should consider the potential benefits of higher levels of oversight versus what complications may arise from it.

Written by: Jamie Notaro

Edited by: Ken Chiang

 

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¹ http://www.nytimes.com/2011/08/13/science/13drug.html?pagewanted=all

Pharmaceutical Advertising

As consumers, we are by no means strangers to pharmaceutical advertisements. They are constantly in front of us, whether it is via TV commercials, magazine ads, or billboards along the highway. An article published on the New York Times (nytimes.com) website takes a look at how these direct to consumer advertisements have impacted Americans’ use of prescription drugs. It also discusses how doctors and patients now use checklists that can be found often times online to diagnose ailments and indicate the proper treatment.

The goal of pharmaceutical companies in regards to advertisements to consumers is clear; they want to raise awareness of their branded drug and want consumers to choose their prescription medication to take over others. It has been difficult to prove, however, that advertisements lead to any increase in direct sales as mentioned in the article. Are patients really any more likely to take a particular drug simply because they know of the brand, or do they simply listen to what their healthcare providers tell them to do? And is the information provided in these ads helping the consumer become more well-informed and knowledgeable with respect to what drugs they should be taking?

Many people, me included, seem to find drug advertisements to be a bit of a nuisance. Although I may be wrong, when the time comes for me to begin taking various prescription medications, I think I will let my doctor make the diagnosis and prescribe me whatever drug he or she thinks will work best—regardless of whether I’ve seen a commercial for it or not. Obviously this is not the case with every consumer; there are some that question their doctors on certain brand name drugs. My question is: is it really worth the time and money of pharmaceutical companies to heavily advertise their drugs to consumers? If there is no way to prove that they help sales and many consumers are annoyed by the ads, is the main reason to continue this heavy advertising to consumers simply to keep up with others in the industry?

I assume pharmaceutical companies could save a significant amount of money if they cut back on their advertising, and with little research to support that advertisements help sales, doing so may not have a negative impact. I know I would not be upset with the absence of prescription drug ads in my day to day life and I am sure I am not alone.

Author: Jamie Notaro

Edited by: Ken Chiang

Medicare-Democratic Side

As discussed in last week’s blog entry, Medicare is a central issue right now for our country. I went into more detail in that previous post about many Republicans’ desires to increase the privatization of payment for Medicare services, but what do the Democrats want? After Representative Paul Ryan’s (R-Wis.) proposal was released, President Obama shared with the nation what his agenda for Medicare included.  Many members of the Democratic Party believe Ryan’s subsidy plan would be a colossal error. Obama, also not wanting to move to a Medicare voucher system, said in a speech given in April of 2011¹ that his plan for Medicare would protect the fundamental commitment our country has to the elderly, disabled, and poor, which he and other Democrats feel Ryan’s plan fails to do. The President has outlined several ways in which he will create savings within the Medicare program.

Obama plans to make certain changes that directly affect Medicare beneficiaries. For example, increasing deductibles by $25 in 2017, 2019, and 2021, increasing premiums for higher-income beneficiaries, and increasing the percentage of beneficiaries paying higher premiums from 5%-25%. He also calls for new beneficiaries to pay co-payments of $100 for home healthcare visits starting in 2017². Finally, new beneficiaries who buy private insurance to help fill gaps in Medicare would see an increase in Medicare premiums by 30%. These are all actions to increase the revenue received by Medicare through its beneficiaries. Another target source of revenue in Obama’s proposal is pharmaceutical companies. There would be a requirement for drug companies to lower their rates and pay out additional rebates to low-income beneficiaries. Those producing brand name drugs would pay a rebate of 23% and generic drug makers would pay a 13% rebate³.

These actions to increase revenues could affect the decisions made by both Medicare beneficiaries and many pharmaceutical companies. Those about to enroll in Medicare may choose to take advantage of the program much differently than before changes were made. Also, the drug companies might change what proportions of what drugs they produce depending on how the rebates affect them.

Cutting expenses is another way President Obama plans to reform Medicare. Slowly lowering Medicare payments to nursing homes, home health agencies, and rehabilitation hospitals, cutting payments from nursing homes where large numbers of patients were hospitalized because they did not receive proper care at the home, and reducing payments to hospitals and other providers for bad debts that result when beneficiaries fail to pay deductibles and co-payments are all ways to save money for Medicare⁴. Implementing these changes will not only save Medicare money, but it will help to change the incentive system and encourage providers to execute higher quality care.

I believe Obama’s plan has positive underlying ideas. Changing the incentive system to provide higher quality products and services for those enrolled in Medicare is a difficult task to accomplish. Making healthcare more accessible and affordable is also a key to the President’s suggested changes. Whether the Democratic Party and President Obama are given the chance to implement their changes, or Paul Ryan and the Republicans are given the opportunity, all who are somehow active in the healthcare system should be ready to make some adjustments of their own.

Author: Jamie Notaro

Edited by: Ken Chiang

 

¹Remarks by the President on Fiscal Policy: http://www.whitehouse.gov/the-press-office/2011/04/13/remarks-president-fiscal-policy

^2,4New York Times: http://www.nytimes.com/2011/09/20/us/politics/medicare-and-medicaid-face-320-billion-in-cuts-over-10-years.html?_r=1&emc=tnt&tntemail0=y

³Kaiser Health News: http://www.kaiserhealthnews.org/Stories/2011/September/19/Obama-Plan-To-Cut-Health-Programs-By-320-Billion.aspx