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Published by: Decision Resources
Published: Feb. 19, 2008 - 74 Pages
Table of Contents
- Executive Summary
- Strategic Considerations
- Stakeholder Implications
- Overview
- Organization and Funding of the U.S. Health Care System
- Private Insurance
- Medicare
- Medicaid
- Military and Other Federal Health Care Programs
- Pharmaceutical Prices in the United States
- Prices Relative to Other Major Markets
- Pricing in the Public Sector
- Pricing in the Private Sector
- Generics Pricing
- Provider Reimbursement
- Medicare
- Hospital Inpatient Treatment
- Hospital Outpatient Treatment
- Offi ce-Based Physicians
- Commercial Insurers
- Coverage Decision Making
- Public Sector
- Private Sector
- Cost-Containment Measures
- Multitier Formularies
- Patient Copayments and Coinsurance
- Use of Generics
- Therapeutic Substitution
- Prior Authorization and Step Therapy
- Specialty Pharmacy
- Health Technology Assessment in the United States
- Academy of Managed Care Pharmacy
- Agency for Healthcare Research and Quality
- Drug Effectiveness Review Project
- Medicare
- HTA Outlook
- Outlook for the U.S. Pharmaceutical Market
- Tables
- 1. Health Insurance Coverage of the U.S. Population, 1999-2006
- 2. Medicare Part D: Key Parameters of the Standard Drug Benefi t Design, 2006-2008
- 3. Multilateral Comparison of Average Ex-Manufacturer Prices of Branded Medicines in Select Markets as a Percentage of U.K. Average Ex-Manufacturer Prices, 1992-2004
- 4. U.S. Prices of Select Drugs as a Percentage of Average Prices in Six Other Major Pharmaceutical Markets, 2006
- 5. Prices of Leading Biologics in the Major Markets as a Percentage of U.S. Prices, 2006
- 6. Pricing Benchmarks in the United States
- 7. Technologies That Have Pass-Through Status in the Medicare Outpatient Prospective Payment System, 2008
- 8. Key Features of Medicare Inpatient and Outpatient New Technology Payment Mechanisms
- 9. Frequency with Which Pharmacy and Therapeutics Committees Consider Select Drug Attributes in Formulary Decision Making (%)
- 10. Frequency with Which Pharmacy and Therapeutics Committees Consider Select Drug Attributes in Formulary Decision Making (mean scores)
- 11. U.S. Employers’ Views on Strategies to Increase Prescription Drug Benefi t Value, 2005
- 12. Bills Introduced in the 110th Congress to Promote Comparative Effectiveness Research
- 13. Key Trends of Change in the U.S. Prescription Drug Market: Implications for the Pharmaceutical Industry
- Figures
- 1. Percentage of the U.S. Population Covered by Various Forms of Health Insurance
- 2. Percentage of Covered Workers Enrolled in Various Types of Health Plan, 1998-2007
- 3. Medicare Benefi ciaries’ Sources of Health Care Coverage, January 2007
- 4. Standard Medicare Part D Drug Benefi t Design, 2008
- 5. Annual Deductible Policies of Standalone Medicare Prescription Drug Plans and Medicare Advantage Plans, 2008
- 6. Detailed Coverage Gap Policies of Standalone Medicare Prescription Drug Plans, 2008
- 7. Detailed Coverage Gap Policies of Medicare Advantage Plans, 2008
- 8. Medicaid Pharmaceutical Expenditures, 1996-2006 (estimated)
- 9. Average Prices of Leading Biologics, Small-Molecule Drugs, and Pharmaceuticals Overall in the Major Markets as a Percentage of U.S. Prices, 2006
- 10. Comparison of Prices of Select Branded Medicines and Generics for Customers With and Without PBM Membership, 2002
- 11. Average Rebates Per Prescription Received by U.S. Employers, 2007
- 12. Employers’ Perceptions of Pharmacy Benefi t Management Companies’ Impact on Their Overall Drug Costs, 2002 and 2005
- 13. Average Price of Brands and Generics As a Percentage of Respective Brands’ Price Prior to Generic Entry
- 14. National Coverage Determination Process of the Centers for Medicare and Medicaid Services
- 15. Important Factors for Making Reimbursement Decisions
- 16. Percentage of Covered Workers in Formularies of Various Structures, 2000-2007
- 17. Percentage of Employers Using Formularies of Various Structures, 2007
- 18. Percentage of Medicare Standalone Prescription Drug Plans Offering Formularies of Various Designs, 2006-2007
- 19. Percentage of Medicare Advantage Plans Offering Formularies of Various Designs, 2006-2007
- 20. Importance of Clinical and Nonclinical Factors to Tier Placement
- 21. Ranking of Clinical and Nonclinical Factors as Infl uences on Tier Placement
- 22. Importance of Cost Attributes to Tier Placement
- 23. Evolution of Mean Patient Copayments for Generics, Preferred Branded Medicines, Nonpreferred Branded Medicines, and Fourth-Tier Drugs, 2000-2007
- 24. Evolution of Average Retail Copayments for Generics, Preferred Branded Medicines, and Nonpreferred Branded Medicines, 2000-2007
- 25. Evolution of Average Mail-Order Copayments for Generics, Preferred Branded Medicines, and Nonpreferred Branded Medicines, 2002-2007
- 26. Percentage of Covered Workers Required to Pay Copayments and/or Coinsurance by Formulary Tier, 2007
- 27. Evolution of Mean Patient Coinsurance Rates for Generics, Preferred Branded Medicines, Nonpreferred Branded Medicines, and Fourth-Tier Drugs, 2000-2007
- 28. Leading PBMs’ Generic Dispensing Rates, 2002 and 2006
- 29. Percentage of Employers That Permit Therapeutic Substitution for Select Chronic Disorders
- 30. Percentage of Employers That Permit Step Therapy and Prior Authorization for Select Chronic Disorders
- 31. Employers’ Specialty Pharmacy Policies
- 32. Main Sources of Funding for Prescriptions Dispensed in the United States, 2005-2007
- 33. Share of Total Prescription Drug Expenditures by Source of Funding, 2000-2016 (projected)
- 34. HMO Pharmacy Directors’ Views on Main Drivers of Biogenerics Use in the United States
- 35. HMO Pharmacy Directors’ Views on Likely Strategies for Promoting Biogenerics Use
AbstractIntroduction
The United States dominates the world’s pharmaceutical markets, not least because it offers pharmaceutical companies a speedy, effi cient drug registration process and unrivaled freedom to negotiate drug prices and reimbursement—but a rising chorus of complaint about the high cost of branded drugs is driving public and private sector policy changes, and companies must prepare to deal with diffi cult challenges. This report features a summary of 12 areas of change and identifi es the implications of those trends for the U.S. drug industry.
Get the Answers You Need to Shape Your Strategy
- One of the most attractive features of the U.S. market for pharmaceutical companies is the unrivaled freedom of its pricing and reimbursement environment.
How has the Deficit Reduction Act of 2005, in effect since January 2007, changed drug manufacturers’ “best-price” calculations?
How are pharmacy benefit management (PBM) companies’ relationships to drug companies evolving in response to widespread criticism?
What are CMS and commercial insurers doing to curb expenditure on provider reimbursement?
- Medicare drug spending is forecast to grow from just $2 billion in 2000 to $153 billion in 2016—a 7,550% increase.
How will this enormous growth in Medicare’s share of total U.S. drug expenditures affect private insurers?
Will it encourage employers to reduce or eliminate retiree benefits?
How might the 2008 Medicare drug benefit design influence drug design in the non-Medicare market?
- Cost-containment pressures will continue to intensify and force all payers to look for substantial economies.
Will patient copayment and coinsurance rates rise?
What other methods are health plans using to control costs?
Will Congress enact a regulatory framework for biogenerics approval in 2008?
How will these efforts impact the pharmaceutical industry?
- The most radical changes to the U.S. pharmaceutical market could result from the outcome of the 2008 presidential and congressional elections.
How do the contending parties differ on the question of universal health insurance?
How do they differ on ways to control health care costs, particularly drug costs?
Scope
- U.S. health care system: Organization and funding, Medicare, Medicaid, private insurance, military and other federal health care programs.
- Pharmaceutical prices in the United States: Relative to other major markets, public and private sector pricing, generics pricing.
- Provider reimbursement: Medicare, commercial insurers.
- Coverage decision making: Public and private sectors.
- Cost-containment measures: Multitier formularies, patient copayments and coinsurance, use of generics, therapeutic substitution, step therapy, prior authorization, specialty pharmacy.
- U.S. pharmaceutical market outlook: Slower growth, impact of Medicare Part D, intensifying cost- containment pressures, insurers’ growing use of comparative drug effectiveness data, possible market entry of biogenerics by 2009.
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