Pharmaceutical Industry's Conduct
and Managed Care
Purpose of this Web Site:Pharmaceutical Industry's Conduct and Managed Care
This Web site has been designed to provide resources to better understand the relationship between managed care and the pharmaceutical industry as well as the strategy used by managed care to control the cost of medicinal drugs.
Background:
Drugs play an important role in maintaining and improving both individuals’
health and quality of life. Indeed, drugs help to bypass the need
for more traumatic and also more costly procedures, such as surgery.
Because the American population is aging, the demand for drugs will certainly
continue to rise well into the new millenium. Managed
care's primary role has been to contain health care expenditures and, indeed,
has been rather successful in doing so. Currently, drugs only represent
a small portion of health care expenditures (about 8%),but it is the fastest
growing health care expenditure category and the only one with increase
in the double digit. Furthermore, it is extremely likely that drugs
expenditures will not slowdown since the baby boomers are graying and new
and more expansive technologies are being developed at an ever-increasing
pace. How the managed care industry will be affected by the rising
costs of drugs and by the fact that the pharmaceutical industry is increasingly
becoming more concentrated need to be followed.
Web Sites
v Drug Benefit Trends: *****This site is a section of the Medscape Web site. It corresponds to the electronic version of the Journal published by Medscape: “Drug Benefit Trends.” All the issues of this journal can be consulted for free on the Internet and contain numerous articles about managed care and its interaction with the pharmaceutical industry. Registration to Medscape is required, but it is free and it is a relatively short process. One concern is that it was not clear to me who was sponsoring this site and, therefore, it is difficult to establish with certainty whose stakeholders' interest this site is more specifically serving and what the bias of the authors of this site are.
v Public Citizen: *****This site is published by Public Citizen, a non-governmental organization, that advocates for consumers’ rights and interests. One of the advocacy groups of Public Citizen, the Health Research Group (HRG), is one of the country's leading consumer watchdog group on health issues. Two sections of this site are pertinent to health care and pharmaceuticals: the Drug link in the HRG sub site and the Health Care section in the Congress watch link. The information available in this site presents the consumer advocate’s perspective on pharmaceutical pricing and health care/managed care. This site is particularly interesting in the sense that it exposes a stakeholder’s opinion that is radically different from the PhRMA’s opinion exposed below.
v Pharmaceutical Research And Manufacturers of America: ****This site from the Pharmaceutical Research and Manufacturers of America (PhRMA) is the voice of the pharmaceutical industry. Information about drug pricing and the managed care industry can be found in different sections of this web site. The sub-site that has the most information is the “Facts and Figures” link.
v Merck-Medco: *****This site is a vivid example of a successful collaboration between the managed care industry and a major pharmaceutical company: Merck. In 1993, Merck acquired Medco, a provider of prescription drugs. Nowadays, Merck-Medco is the provider of prescription benefit management services for numerous health plans and offers a variety of health care services and programs. The bidding process to obtain contracts for providing prescription drug benefit management services is highly competitive (this bidding process is briefly described in an article published by Merck-Medco: “Merck-Medco's Role in the Competitive Health Care.” Browsing this site is interesting because it provides an example of a cleaver way the pharmaceutical industry used to respond/adapt to the changing health care environment.
v The Managed Care Digest Series: No Star!This site is sponsored by a major pharmaceutical company: Aventis. It claims that it provides detailed statistical information for several key health care markets. However, in order to be able to view the material, you have to be a customer of the company!
Relevant Topic Documents
v Demand for Prescription Drugs: The Effects of Managed Care Pharmacy Benefits: *****This article offers a thorough scholastic study of how demand for prescription drugs is influenced by different types of insurance. It shows the effectiveness of the managed care industry in shifting drug prescription from brand names toward less expensive products. This study was used as the foundation of R. Mortimer’s Ph.D. thesis which was defended at Berkeley, CA. In and of itself, the article may be rather complicated for the layman but yet is a beautiful piece of work. It can be downloaded either as a PDF file, a zipped file, or a html file: a very convenient feature!
v Ensuring Cost-Effective Access to Innovative Pharmaceuticals: *****This document is a report from the Boston Consulting Group sponsored by Warner-Lambert Company. It is intended to provide valuable information and analysis for policymakers engaged in discussions on health care reform. The study concludes that although market interventions such as price controls have been introduced to contain overall spending while retaining wide access to new medicines, they have often been counterproductive. The report points out that it can worsen health outcomes.
v The Changing Healthcare Marketplace: Focus on Cost and Value: ****This document is part II of a set of articles about “The New Era” published by Pfizer. This section is of special interest since it describes the six principal tools that managed care uses to minimize spending on pharmaceuticals. While there may be some bias in this document since it has been written by the pharmaceutical industry, which incentive evidently is to avoid price containment and to emphasize the negative aspects of price control, it is, nevertheless an interesting article.
v Pricey Pills:***This document from the Washington Post describes the solutions that health plans are resorting to in order to contain the cost of pharmaceuticals. Besides giving incentives for physicians to prescribe more generic drugs and less brand names, another of the plans’ strategy is to shift the costs to the consumer. This article explains how plans are passing along pharmaceutical costs to consumers.
v E-8.135 Managed Care Cost Containment Involving Prescription Drugs:**This article describes the ethical requirements that have to be established for formulary application, one of the tools used by managed to control drug expenditure. This technique is also mentioned in the site above: "The Changing Healthcare Marketplace: Focus on Cost and Value."
| Note: The information below may contain additional relevant materials and documents. Some of the information may be duplicate. The evaluations depend on both the student doing the review and the information contained at the time of the review. Sites are subject to change! |