Reducing pharmaceutical utilization and costs

December 10th, 2008 by k_pruchnik

Pharmaceutical costs in the United States has been rising significantly in recent years (other than 2008) at a rate higher than inflation. A portion of these costs are due to price increases, but a significant portion is due to the ability of the pharmaceutical companies to increase market share or the total number of users. It is my understanding that in Europe, that television advertising is unlawful for medications. There are many avenues for educated consumers to seek out treatment options, i.e. the internet, library, etc. It is not a coincidence that the top utilized drugs in any given year in the US, are the drugs that are most often advertised on TV or elsewhere. Studies have illustrated that if a patient comes to their doctor asking for a particular brand name drug, the doctor, more often than not, honors the patient’s request.

My first recommendation would be, for the United States, to implement a policy similar to Europe’s to

    not allow

TV advertising for prescription drugs. I believe that over time this would contribute strongly to a reduction in the use of brand name drugs, particularly when unnecessary.

My second recommendation would be, for the United States to negotiate drug prices for the Medicare population and yes, even, the general population. It is unconscionable that citizens and employers in the US are paying 25% to 40% or more for prescriptions than Canada, the UK, etc. The reason for this is simply because we have refused to set caps, and also because our government (congress and senate) profits so much from the pharmaceutical lobbyists. I don’t believe we can afford this stance much longer.

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5 Responses to “Reducing pharmaceutical utilization and costs”

  1. alewis Says:

    I think you are 80% of the way there. It might be a little Draconian to ban TV advertising for the entire category, though clearly it is an abused medium, where ads tell you to ask for the “purple pill” without giving you a clue of what it’s for (which would require disclaimers).

    How about, Medicare negotiates a rate, as you say and as will likely happen, and then part of the deal is that the co-pay varies according to the TV advertising budget? You could come up with a formula. That would discourage TV advertising, save money for Medicare, and prevent the whole thing from having to go to Congress, I think.

  2. David Says:

    It is not an issue of lowering costs of pharmaceuticals, which is complicated, but rather making sure that expensive pharmaceuticals are being directed to the correct patient population. This is the goal of Personalized Medicine. The connection of a diagnostic test to a specific pharmaceutical.
    There is too much of a focus on cost and not enough on value.

  3. K_pruchnik Says:

    I agree with you David, but doctors need patients and they like to please their patients, thus they often give them what they ask for. Patients request the name brands that they see advertised.

  4. JimEd Says:

    Some accurate, some inaccurate, some advisable, some inadvisable, IMHO.

    Accurate: Docs give in to patients’ requests. Inaccurate: Rx costs only dropped in 2008. Advisable: ban advertising of Rx. Inadvisable: Have govt negotiate Rx prices.

    I think you’re both on the spot when you say that part of the problem is that Docs simply give in to patients’ requests. Typically, the doc has no idea what the copay is or the cost of the drug, so why not? Insurance companies & Medicare/Medicaid discourage docs from taking “too much time” with a patient, so docs are unable or unwilling to direct the patient to the RIGHT drug (i.e., the lowest cost-effective option).

    Drug pricing/inflation has been ebbing along with the increasing penetration of the three-tier drug copay. As employees are forced to share in the cost of their medical decisions, generic and tier-2 drugs gain ground, tier-three drugs lose ground, and drug inflation ebbs. Patient sharing in the cost of treatment is ALWAYS helpful, providing it doesn’t reach ruinous levels.

    I think it’s advisable to ban pharmaceutical ads on TV. The Rx cos are reaching the lowest common denominator with a necessarily-incomplete message. I’m not capable of deciding WHICH hypertension medicine is best for me. That’s what I have a doc for. We USED to ban Rx ads, up until some time in the 60’s or 70’s, maybe the 80’s. Drugs were then selected in a less uninformed way (not uninformed… LESS uninformed)

    Not advisable, IMO, to regulate drug prices. That is how new drugs are developed — from the profits on existing drugs. The socialized countries that regulate the prices of OUR drugs in THEIR countries continue to carp that we’re not developing ENOUGH NEW DRUGS. If we shut off the flow of profits, we’ll eventually shut off the flow of new, effective, targeted drugs. With outlawing ads, even MORE money would be freed up to research new cures.

    However, bureaucrats are ONLY concerned about the deaths people can see, not the deaths that MIGHT have been prevented but weren’t because new drugs weren’t developed.

  5. dblacklock Says:

    I saw a presentation on PBS 2 weeks ago that featureed the health delivery systems in England, Japan, Taiwan, Germany, and Switzerland. In all cases the governments have taken the profit out of healthcare. In the US, every direction the patient turns, a different provider or industry has their hand out. Socialized medicine didn’t look bad at all. A consistent question the journalist asked his interviewee in each country was, “How many people in your country have to declare bankruptcy on account of a healthcare catastrophe. In each instance the answer was zero, usually with a puzzled look.


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