Prescription drug spend in 2012: moving from “educating” patients to empowering them
The growth in prescription drug costs covered by employers and Rx plan sponsors are driving them to adopt a long list of utilization management and price-tiering strategies looking to 2012, according to the 2011-2012 Prescription Drug Benefit Cost and Plan Design Report, sponsored by Takeda Pharmaceuticals. The average drug trend for 2011 — that is, the average annual percentage increase in drug cost spending — was 5.5%, 1.5 percentage points greater than general price inflation of about 4%. The generic fill rate was 73% of prescription drugs purchased at retail. While drug price inflation is expected to increase in 2012, plan
Botox over preventive health: health consumers have spoken, delaying diagnoses
Americans are opting for Botox and cosmetic procedures more than colonoscopies and cancer tests, according to a story in Reuters. This trend makes companies like Allergan, makers of Botox and the Lap-Band for gastric surgery, very happy indeed. Plastics and gastric bypass surgeries are back up to pre-recession levels as of 2Q11. However, for companies and providers in other segments of the health care and surgery value-chain, prospects for bounceback in 2011 aren’t as promising. Various indices on consumers’ health care sentiment — such as the Thomson-Reuters Consumer Healthcare Sentiment Index and the EBRI Health Confidence Survey, show U.S. consumers’ perceptions of their ability to
Brand “Health:” where is it in the Top 100 most valuable brands?
Apple has supplanted Google as the world’s #1 most valuable brand, worth more brand-wise than Microsoft and Coca-Cola combined (#5 and #6). the other most valuable global brands are IBM, McDonalds, AT&T, Marlboro, China Mobile, and GE. Technology brands have significantly grown in value with consumers allocating more personal disposable income to products like tablet computers and smartphones, even in the face of recessionary economics the world over. Technology companies are now 1/3 of the top 100 brands. Millward Brown, the brand consultancy that is part of WPP, the global communications firm, has conducted the BrandZ top 100 most valuable
ePrescribing continues to challenge physicians – but can be a link for patient engagement
About 1.3 million people in the U.S. experience a medication error each year, which are preventable events that may cause or lead to inappropriate medication use or harm a patient, any preventable event that may cause or lead to inappropriate medication use or patient harm while the medication is in the control of the health care professional, patient, or consumer. Two very common causes of medication errors are illegible handwriting by prescribers and misplaced decimal points on prescription forms. Twenty percent of adverse drug events lead to life-threatening circumstances, according to The Leapfrog Group. The costs of medication errors has been
The patent cliff coupled with value-based health purchasing makes for declining branded pharma market in the U.S.
Two mega-trends are driving down branded pharmaceutical sales in the U.S.: switches from branded to generic prescription drug products for major chronic conditions; and, the lack of new-new branded Rx products that (could) command higher prices. A down-market picture emerges from The Use of Medicines in the United States: Review of 2010, based on market data analyzed by the IMS Institute for Healthcare Informatics (IMS). While U.S. market growth for pharma overall ranges from 3% to 5%, IMS says, protected Rx brands were negatively impacted through the switch to cheaper generic substitutes. Generics now comprise 78% of pharma market share. The key sentence
Physicians in the U.S. are becoming health economists
Doctors practicing in the U.S. are becoming increasingly conscious of the increasing costs of health care. Most consider themselves cost-conscious, and are considering the impact of their practice patterns — in terms of prescribing medicines, tests, and procedures — on the nation’s health bill. In fact, most physicians feel they have a responsibility to bring down health costs. This perspective on physicians comes from the survey report, The new cost-conscious doctor: Changing America’s healthcare landscape, from Bain & Company, published in March 2011. Bain spoke with over 300 U.S. physicians to assess their perspectives on managing costs, drug and device usage, and
Independent drugstores — facing tough health and retail economics — are still beloved by consumers
In the pharmacy market battle between Davids and the Goliath, David wins in the latest Consumer Reports survey on best drugstores according to consumers: independent pharmacies come out on top, and Walmart ranks last on the roster. The most highly-rated chains, highly indexed at 90 or more points, Health-Mart, The Medicine Shoppe, Bi-Mart, Publix, Hy-Vee, and Wegmans. Target, which was just ranked the #1 retailer in brand equity by the Harris Poll (where Target also beats Walmart in general retailing brand equity), ranked lower with an 88: much higher than Walmart with a 78 index, but below Walmart’s Sam’s Club and several grocery
Will people see Health when they see Walmart?
“Can Walmart Make America Eat Healthier?” asks The Week. Walmart, the world’s largest retailer and #1 company on the Fortune 500 list, has come out in favor of bolstering health in the food it sells through its 800+ discount stores, 2,700 supercenters, 158 neighborhood markets, and nearly 600 Sam’s Clubs in the U.S. The Financial Times today reported that the company’s plan won the compliments of First Lady Michelle Obama, who is a proponent of healthy and local foods and was present at Walmart’s announcement. The company’s stock price is up over a dollar today, probably based on this news and
Med simple: how simplifying drug labels can bolster health literacy
If you don’t speak French and/or have aging eyesight, you might not understand the label on the medicine in the photo. When someone doesn’t understand the label placed on their prescription drug, they’re in a compromising position: this lowers health literacy and potentially endangers peoples’ health. As I monitor the tweets from today’s meeting of the Business Development Institute’s (BDI) Mobile Healthcare Communications conference, covering statistics and case studies about who’s using smartphones for accessing health information and how pharmaceutical companies can bolster adherence by developing mobile health apps, I’m struck by an important story in the health news that won’t get much coverage because it’s not about
An Rx for improving health care: lessons from Target
Target, fondly known as “Tar-zhay“ in my home, won the Design of the Decade award from the Industrial Designers Society of America for the innovation called ClearRx — a pill bottle. While a pill bottle might seem to be a commoditized sort of item, this bottle was designed to prevent medication mistakes committed by patients who take maintenance medications for chronic conditions. The National Coordinating Council for Medication Error Reporting and Prevention (NCCMERP) defines medication errors as preventable events that can cause or lead to inappropriate medication use or patient harm while the medication is in hands of patients or providers. The Institute of Medicine estimated that
Walgreens’ Wellness Wisdom – what it means for pharmacy’s role in health
Two weeks ago at the company’s AnalystDay conference, Greg Wasson, the CEO of Walgreens, told the audience that the pharmacy chain was on a mission to “own well.” In the New York Times magazine dated November 12, 2010, an article titled Fresh Approach talks about Walgreens work in low-income Chicago neighborhoods coupling with greengrocers to bring “food oases” to inner cities. Two weeks ago, I learned that Walgreens is teaming with Orbitz to provide travelers’ health services. Married to an international banker who travels globally, I am pleased to know he can get his esoteric inoculations in local, convenient retail mode. Walgreens’ data found that 25% of
The hot trigger of Rx price at the point-of-prescribing
Medical drug benefits meet doctors and their patients via mobile platforms: that’s the prescription for a retail health care experience with the consumer’s checkbook in mind, brought to you by Walgreens pharmacy and Epocrates, the #1 most widely-used mobile drug information source among U.S. physicians. In this offering, Walgreens will channel its discount formulary information through Epocrates’s mobile application. About 300,000 U.S. physicians use the Epocrates drug database for prescription information. These users will be able to use Epocrates to check a Walgreen PSC member’s formulary profile against the prescription drugs the doctor is considering. At that point-of-prescription, the doctor can have a conversation with
What prescription drug plans and health reform mean for personalized medicine
Prescription drug formularies are getting more complex to drive cost-savings as well as promote adherence to drug regimens, as told by the data in the 2010-2011 Prescription Drug Benefit Cost and Plan Design Report, sponsored by Takeda Pharmaceuticals NA. The average rate of drug cost increases is 6.3%, compared to 4.4% in the 2009-2010 survey — the lowest rate of increase since this survey was launched. A key part of the story of the new value-based benefit design is told by the co-payment differentials for Rx drugs, shown in the chart. Health consumers who have three-tiered prescription drug insurance face an
Another source of health care price/waste: the group purchasing organization?
Contrary to popular health economic wisdom, the group purchasing organization (GPO) raises costs for its constituents — hospitals — according to a study by two respected economists, Robert Litan and Hal Singer. Do Group Purchasing Organizations Achieve the Best Prices for Member Hospitals? An Empirical Analysis of Aftermarket Transactions found that hospitals could have saved, on average, 10 percent between 2001 through 2010 when they purchased medical devices aftermarket, when GPOs supposedly negotiated the best price; and, in 2010, the savings for hospitals was as much as 18 percent for purchases. The researchers analyzed 8,100 transactions from the MEMdata database. The authors recommend changing the incentive-payment
Health is a growing business for Nestlé
Their website now talks about it being the “Nutrition, Health and Wellness Company.” Most of us still think of it as the biggest food company in the world. It’s spending one-half billion dollars to expand in health. Nestlé, which brings baby food, bottled water, bars of chocolate and breakfast cereal to kitchen tables is now bringing us Health. The new group will be known as Nestlé Health Science. The company’s existing health business is already valued at about $1.6 billion. “The combination of health economics, changing demographics and advances in health science show that our existing health care systems, which focus on treating
Service First, But Cost Increasingly Drives Consumers’ Pharmacy Satisfaction
Cost-competitiveness is driving overall consumer satisfaction with pharmacies in 2010, 2.5 times the importance that cost had in 2009. But even so, customer service and convenience still trump price in the pharmacy. For brick-and-mortar pharmacies, the key factors driving consumer satisfaction are: Prescription order and pick-up process (convenience) The condition of the store Cost competitiveness Non-pharmacist staff The pharmacist. In 2010, cost competitiveness accounts for 24% of overall satisfaction among brick-and-mortar Rx shoppers; that number was 9% in 2009. The retail pharmacy chains garnering highest satisfaction nationally are the Good Neighbor Pharmacy, Health Mart, and The Medicine Shoppe Pharmacy, all awarded
That’s Dr. Geek Squad to you
Best Buy is teaming up with Cardiac Science, targeting potential purchasers of electronic health records (EHRs) and noninvasive cardiac devices. The venture looks to take advantage of economic stimulus funding available through the HITECH Act aimed at motivating physicians to adopt EHRs. Cardiac Science is a medical device company focused on the noninvasive management of heart disease. Their products include defibrillators, ECG/EKG devices, stress testing equipment, Holter and vital sign monitors. These heart-hardware products are designed to connect with electronic health records systems in hospitals and physician offices. and are used in many settings outside of health institutions including schools, emergency
Caveat emptor for consumers buying medicine
Two weeks ago, I bought a package containing 100 caplets of Tylenol PM caplets from my grocery store’s pharmacy aisle. I checked the lot number marked on the box against the list on the McNeil consumer healthcare website, and my lot appears to be fine. Today, Avandia, the prescription drug that treats diabetes, hit the headlines of the world’s major newspapers: Avandia Panel Hints At Doubts of Credibility, says the New York Times Avandia Hearings To Reveal True Dangers of Popular Drug, according to FOXNews GlaxoSmithKline Hid Negative Avandia Data: Lawmakers, reads ABC News Glaxo to Pay $460 million in Avandia Settlement, notes Reuters. And there’s also
Health plans are in a service business: it’s not only about costs and benefit design for employers
J.D. Power, an expert in understanding satisfaction across industries, has looked under the hood of employers and their satisfaction with health plans. In summary: it’s not only about the benefits and costs when it comes to health plan satisfaction. For employers, satisfaction is also based on near-equal parts of “service” in 3 guises: account servicing from the employer’s point of view (where more communication from the plan is seen as better than less); employee plan service experiences; and problem resolution. For the 4 in 5 employers who have had problems with health plans (that’s 79% of employers), it’s less about costs and
The health supply chain will move closer to the patient
People responsible for managing the health care industry supply chain have always been concerned about regulations and compliance requirements that can negatively impact their ability to manage the materials, technologies, goods and services they need to fulfill their organizations’ medical missions and businesses. Now “health reform” joins regulation as a pain point in the supply chain. UPS, the logistics and transport company, has surveyed executives from pharma, biotech, medical and surgical device companies, to ascertain their current perspectives on the health care supply chain. The results of this study are in the report, UPS 2010 Pain in the (Supply) Chain
The pharmacy as health hub – what the Rite Aid/American Well alliance means
As Rite Aid partners up with American Well, here’s another example of the further retail-ization of health in the U.S. The subtext of this arrangement is the fact that the pharmacy is a touch-point for health consumers who seek trust, convenience, access, and an understandable market channel for health. Rite Aid will be the first pharmacy to test the American Well service that enables patients to interact online with providers. In this program, consumers will interact live online via Internet or phone with Rite Aid pharmacies from both their homes and private consultation rooms at select Rite Aid pharmacies. The consults will
Personalized medicine: the consumer lens
Health care delivered in today’s model can be thought of as a mass market product. There’s not much customization, even though to each of us, our health is extremely personal to us. Welcome to the emerging era of personalized medicine: “the right treatment for the right person at the right time.” This is just-in-time, customized, measure-twice-cut-once care bespoke for the individual. Read more about this transformational market in PricewaterhouseCoopers’ report, The new science of personalized medicine: Translating the promise into practice. Personalized medicine includes several segments: Personalized medical care, such as telemedicine, health information technology and disease
$16,771 is the cost of health care for a family of four in 2009
$16,771 is roughly the cost of health care for an American family of four in 2009, according to the Milliman Medical Index. If the median family income in 2008 was about $67,000, then health care costs represent about 25% of the annual household paycheck (remember, that’s gross, not net, income). As the chart illustrates, 1 in 3 health care dollars goes to physicians, with another third paid to inpatient services. Outpatient services and prescription drugs consume 15-17 cents on the health dollar in 2009. The greatest increase in cost trends in 2008-9 is with hospital outpatient services, which grew more
Demand for health products and services is down in the recession; thinking about value and self-care in health
What is value in health care? Every year we spend more and seem to get less, John Seng, Founder of Spectrum, told attendees of a webinar on the Spectrum Health Value Study on 12th May 2009. As we consumers spend more of our own money, we’ll be looking for greater value and “health ROI” from our health spending. Measuring value across a population is confounded by the fact that what one person decides to spend on ‘health’ can be different from another’s health spending choices. In other words, our personal health “marketbaskets” for health spending vary from person to person.
Generic drugs have saved $734 billion to US health system over 10 years
The Hatch-Waxman Act passed in 1984 to hasten the introduction of generic competition into the pharmaceutical market. According to an analysis from IMS Health, $734 billion have been saved in the past 10 years through the use of generic pharmaceuticals. $121 billion was saved in 2008 alone, based on the IMS data, published in the report, Economic Analysis of Generic Pharmaceuticals 1999-2008. The long name of the Hatch-Waxman Act is the “Drug Price Competition and Patent Term Restoration Act of 1984.” The law has indeed brought drug price competition into the prescription drug market — which was anticipated
Cost increases for drugs most-used by older Americans are higher than inflation
For a consumer who’s enrolled in Medicare and takes three brand name prescription drugs on a chronic basis, the average increase in the cost of the medications used to treat those conditions increased by nearly $2,100 between 2002 and 2008. Between 2007 and 2008, the average increase in drug price over 3 therapies was $556. These findings, and other details describing price increases for 211 prescription drugs int he “Medicare Rx market basket,” are found in the AARP’s latest Rx Watchdog Report: Trends in Prices of Prescription Drugs Used by Medicare Beneficiaries. AARP began the series of drug price Watchdog
Can Wal-Mart Mass Merchandise Electronic Health Records?
“We believe America can have high quality, affordable and accessible health care by 2012.” Who said that? If you guessed President Obama, Senator Edward Kennedy, or Hillary Clinton, you’re wrong. It’s Wal-Mart, on its Health and Wellness webpage. Wal-Mart’s got a new direct-to-physician strategy: selling electronic health records (EHRs). The world’s largest retailer, #1 on the Fortune 100, expands on the company’s experience with retail health clinics. The chain now has 30 clinics sprinkled throughout the south, and in each clinic, there’s an EHR system. The EHRs will be offered through Wal-Mart’s subsidiary, Sam’s Club, jointly with Dell and eClinicalWorks,
How to find $150 billion for health care: get rid of paper
Paper, Benjamin, Paper. The lowest-hanging fruit opportunity in reforming health care today is paper. Getting rid of it, that is. In their Recommndations to the Obama Administration and 111th Congress, Ingenix says that, “Administrative cost savings are win-win propositions, benefiting all stakeholders.” Health Populi’s Hot Points: As Congress continues to wrestle with what $20 billion can do for electronic medical data in the U.S., addressing administrative waste is in health is an opportunity to mine some found money which won’t require a 10-year wait for an ROI. The point here is to move toward administrative efficiency in parallel with migrating
Americans’ demand for generic drugs is up
4 in 5 Americans would choose generic drugs over brand name drugs, according to The Harris Poll conducted among American adults in December 2008. In Substantial Increase in Public Preference for Generic over Brand Name Drugs, Harris found that the proportion of people who would more often pick branded drugs fell by nearly one-half, from 32% in October 2006 to 19% in December 2008. The 93% of Americans who bought prescription drugs in 2008 increased purchases at discount stores like Wal-Mart, Target and Sam’s Club (owned by Wal-Mart). In October 2006, 13% of Americans bought drugs at these kinds of
Shopping smart for medical devices: where’s the value?
The buyers of medical devices aren’t very good shoppers: they lack the kind of information about technologies that would help them make value-based purchasing decisions. So says James Robinson in the November/December 2008 issue of Health Affairs in his essay, Value-Based Purchasing for Medical Devices. This issue is so important because medical technology is the #1 factor driving up health spending in the U.S., according to the Center for Studying Health System Change in their recent report, High and Rising Health Care Costs: Demystifying U.S. Health Care Spending. What are medical devices? they’re the hardware used by surgeons and
Moving up the health care value chain: J&J in health services
Johnson & Johnson (J&J) has acquired the online health coaching company, HealthMedia. This will move the health supply company up the health care value chain further into the provision of health services. Nine years ago, I teamed with a Big Pharma on a scenario planning exercise about consumers and health care. One of our scenarios told the future-story of the consolidation/integration of information technology, pharma/life sciences, and health services to benefit consumer health. We now meet up with this future-story, and it’s J&J’s to tell. I’ve written here in Health Populi about Walmart’s move toward pharmacy benefits management and
Walmart, Caterpillar, and growing brand equity in health
George Washington ate and drank here. Now, there’s a Walmart Supercenter in that spot. There’s an important crossroads in my vicinity where four major highways meet; it’s called King of Prussia, which is the intersection of the Schuylkill Expressway (I-76), the Pennsylvania Turnpike, US 422, and US 202. A new Walmart Supercenter opens at this intersection today. Across-the-street from the new Supercenter are Neiman-Marcus, Bloomingdales, and Nordstrom, along with hundreds of other retail chains in the shopping mecca known as the King of Prussia Mall. So Walmart’s on my mind. Walmart has become a sort of touchstone for me
The cost of beauty, an American obsession
About $7 billion is spent each year on cosmetics. Another $1.5 billion is spent on breast augmentation, $1.3 billion on lipoplasty, and nearly $1 billion on abdominoplasty — aka, “tummy tucks.” Beauty At Any Cost is an important report from the YWCA. The organization has quantified the economic costs of the never-ending search for ‘beauty,’ and broken down the health implications, and impacts on interpersonal relationships — especially as these issues translate to young girls. One of the most serious behaviors cited in this report include that fact that over 1/2 of teenage girls use unhealthy weight control behaviors such
Insured and confused: people want alternative medicine, yet disconnect from wellness programs
Most employees covered by health insurance favor health plans that provide access to and cover alternative medicine services. Yet only one-half of these employees feel it’s important for a health plan to require employees to eat properly and exercise, and to provide evidence of such healthy behavior. There’s a disconnect in consumers’ minds between actual lifestyle behaviors and understanding how to use health benefits. I’ve talked about health plan literacy in Health Populi before. Guardian’s survey demonstrates a facet of that phenomenon. According to the 2008 Benefits & Behavior: Spotlight on Medical survey from Guardian Life Insurance Company,
Wal-Mart’s leading role in health care — now, as PBM
When the health care Oscars are announced in 2010 for top roles, the health care academy won’t know whether to cast Wal-Mart as the lead, supporting, director, or producer in health care. Wal-Mart is the third largest pharmacy chain in the U.S. As #1 on the Fortune 500 list, the retailer’s role as a jumbo employer means it has clout in health care negotiations and in the entire American health system. According to the company’s CEO, the company may enter the pharmacy benefits management business. During the company’s annual “Year Beginning Meeting” last week, Wal-Mart CEO Lee Scott talked about
A new and improved FDA – for 3 cents more
A strong FDA is crucial for the health of our country. The benefits of a robust, progressive Agency are enormous; the risks of a debilitated, under-performing organizaiton are incalculable. These are the findings of the latest critical analysis of the Subcommittee on Science and Technology prepared for the FDA Science Board, FDA Science and Mission at Risk. FDA Commissioner von Eschenbach requested a hard look at the FDA one year ago, and this report is the sobering culmination of that effort. The Subcommittee included leading members of the scientific community familiar with emerging science, the external marketplace, and the
The Future of Retail – Implications for Health
I’ve been looking at health care through a retail lens for some time. Perhaps it’s that I’m a rag trader’s daughter, or that I’ve been known to like shopping, that I have clients in consumer goods, or that I understand how tiered drug pricing impacts the consumption of medicines (answer: it’s all of the above). I’ve just reviewed the latest trend report from PricewaterhouseCoopers and TNS Retail Forward on the future of retailing. My mind is connecting the dots between the future of retail and the American health care consumer. Four future retail trends are already embedding in health care
I'm in amazing company here with other #digitalhealth innovators, thinkers and doers. Thank you to Cristian Cortez Fernandez and Zallud for this recognition; I'm grateful.
Jane was named as a member of the AHIP 2024 Advisory Board, joining some valued colleagues to prepare for the challenges and opportunities facing health plans, systems, and other industry stakeholders. Looking forward to AHIP 2024 in Las Vegas come June 11-13, 2024.
Join Jane at AHIP's annual meeting in Las Vegas: I'll be speaking, moderating a panel, and providing thought leadership on health consumers and bolstering equity, empowerment, and self-care.