Transcript Value of Pharmaceuticals in Managed Care Pharmacy

Value of Pharmaceuticals in
Managed Care Pharmacy
Presentation Developed for the
Academy of Managed Care Pharmacy
Updated: February 2016
What is Managed Care Pharmacy?
• The practice of designing and implementing drug
benefits for the more than 270 million Americans
covered by public or private health insurance
• Managed care pharmacy focuses on:
– Developing drug benefits and utilization programs
that promote medication use that improves patient
wellbeing while reducing total cost of care
The Value Equation in Pharmaceuticals
Quality
VALUE =
Cost
Evidence-based treatments that
increase the likelihood of
achieving desired health
outcomes
Usually defined as drug cost, and
as applicable administration and
adverse effect costs
– If quality increases, and cost decreases, value of the pharmaceutical
is increased substantially
– If quality remains constant, and cost increases, the value decreases
– If quality increases, and cost remains constant, the value increases
Pharmaceuticals in the Total Healthcare Process
The value of pharmaceuticals is also taken into consideration
for the total healthcare delivery process
Three options for treatment of disease
Lifestyle
changes
Least invasive,
usually considered
first, when appropriate
Pharmaceuticals
Surgical
/Invasive
intervention
Considering a choice between a pharmaceutical
regimen or surgical /invasive procedure, most will
choose a pharmaceutical regimen
Value of Pharmaceuticals
 Pharmaceuticals help people to manage their
illnesses and live full, productive lives
 Pharmaceuticals may save money by preventing
expensive hospital treatments and other therapies
 Today’s medicines fund research and development
for tomorrow’s prescription drug innovations
 The FDA approved 39 novel drugs in 2014
Value of Pharmaceuticals
New Medicines Account for 40% of Increase in Life Expectancy –
1988-2000
Source: FR Lichtenberg, “The Impact of New Drug Launches on Longevity:
Evidence from Longitudinal, Disease-Level Data from 52 Countries, 1982-2001,”
(Cambridge, Mass., National Bureau of Economic Research: June 2003).
Value of Pharmaceuticals
• Medical innovation (i.e., newer drugs) accounted for a
greater portion (60%) of the increase in life expectancy
between 1991-2004
– Of the 3.88-year increase in life expectancy at birth, use of
newer drugs accounted for 2.43 years (63%)
– Of the 2.15-year increase in life expectancy at age 65, use of
newer drugs accounted for 1.19 years (55%)
Lictenberg F. “Why Has Longevity Increased More in Some States than in Others? The Role
of Medical Innovation and Other Factors,” Manhattan Institute for Policy Research. Medical
Progress Report No 4, July 2007.
Value of Pharmaceuticals
Reductions in Disease Attributed Deaths
EFPIA 1999-2002.
Value of Pharmaceuticals
Diabetes Costs Reduced Through Improved Glycemic Control
Source: E.H. Wagner, et al., “Effect of Improved Glycemic Control on Health Care Costs
and Utilization,” Journal of the American Medical Association, 285 (2001): 2, 182-189.
Value of Pharmaceuticals
Summary :
The managed care pharmacist is well
equipped to help purchasers, payers,
providers and patients understand the
overall value of pharmaceuticals
Thank you to AMCP member
Carrie McAdam-Marx for
updating
this presentation for 2016.