Archived Topics

Aging

An aging population presents a unique set of health care challenges and opportunities. Having different reactions to medications, facing complications from insurance plan formularies, dealing with nursing home and caregiving situations, and developing chronic illnesses or multiple medical conditions are potential challenges for all men and women as they age.

The good news is that pharmaceutical innovation is continuing to increase at a rapid rate, allowing for treatments that are specific to an individual patient. Such treatments can enhance an elderly patient’s quality of life while reducing hospitalizations and caregiver stress. The downside, however, is that restrictive insurance plan formularies – those that do not cover the range of drug therapies necessary for appropriate care – can compromise health outcomes for elderly patients.

In a series of studies from 1998-2006, the National Pharmaceutical Council took a closer look at restrictive formularies and their impact on health outcomes; common diseases afflicting the elderly population, such as dementia, depression and urinary incontinence; and how individualized medicine and pharmaceutical innovation can have a positive effect on elderly patient care.

Cultural Diversity

Cultural differences have been documented to affect a patient’s adherence to, and the effectiveness of, drug therapy. For example, physicians' trust and respect for patients and their health beliefs and practices, as well as communications issues, have been found to influence adherence to medication regimens. Patients’ beliefs about the nature of disease, acceptance of side effects, and preferences regarding herbal or traditional therapies may be influenced by a range of sociocultural influences, including gender, socioeconomic class, education, immigrant status, and religion, all of which must be taken into account when determining appropriate treatments. Additionally, communications barriers may lead to incorrect interpretations of diagnoses and instructions regarding treatment.

In a series of studies conducted in the early 2000s, the National Pharmaceutical Council examined these issues and how individualized medicine and pharmaceutical innovation can address the diverse needs of a cross cultural patient population.

Direct-to-Consumer Advertising

Direct-to-Consumer (DTC) advertising is a form of marketing in which advertisements for pharmaceutical products are directed at consumers, in addition to medical providers and payers. The discussion about DTC is centered on whether direct-to-consumer advertising provides value for consumers, prompts appropriate use, and whether it increases diagnosis of otherwise overlooked medical problems.

DTC became a prominent issue in 1997, after the Food and Drug Administration (FDA) loosened restrictions on pharmaceutical advertising, though the FDA tightly regulates the contents of advertisements. Since 1997, critics of DTC advertising have maintained that it prompts overtreatment and over-diagnosis, resulting in a neutral or negative impact on public health, with increased spending. To address growing concerns about DTC advertising, in August 2005, the Pharmaceutical Research and Manufacturers Association (PhRMA) approved and released voluntary guiding principles for industry to follow in developing DTC advertising. Key elements include:

• Submitting all advertisements to the FDA prior to broadcast;
• Transparency regarding what the advertised medication is intended to treat;
• Balanced presentation of risks and benefits; and
• Educating care providers about a medicine before reaching out to consumers.

In 2002-2003, two National Pharmaceutical Council projects assessed the impact of DTC advertising on patients and physicians. Although DTC remains an important industry issue, it is not a core focus of NPC’s research today.

Disease Management & Medicaid Health Outcomes Management

Cost containment of pharmaceutical expenditures usually involves various efforts to control drug utilization.

These efforts typically are aimed at physicians, pharmacists, or the pharmaceutical industry. They have included the establishment of drug formularies and prior authorization programs. Federal legislation has had an important role in shaping these efforts.

One approach to cost containment is disease management. Disease management refers to a system of coordinated health care interventions for populations with conditions in which patient self-care efforts are significant. The goal of disease management programs is to optimize therapy. Optimizing therapy should improve outcomes and decrease overall expenditures associated with a disease.

As more states implement strategies to better identify the needs of their populations to provide optimal health care, disease management programs have increasingly become an integral part of legislative, HMO and employer agendas. Through several studies conducted in the 2000s, the National Pharmaceutical Council examined some of these initiatives centered on evidence-based care for patients with chronic conditions, cost interventions at the state Medicaid level, and promoting the adoption of healthy lifestyles, thus helping chronic disease patients achieve optimal health.

Drug Spending Trends

Increased spending on prescription drugs is often attributed to higher prices for existing and new drugs. However, increases in spending also are determined by the volume of prescription drugs taken by patients, which is defined as the number of prescriptions and the number of days for which a given prescription provides therapy.

Research supported by the National Pharmaceutical Council in the early 2000s developed the methods needed to identify the specific price and volume factors responsible for increased drug spending. This research found that increased use of prescription drugs due to better diagnosis of disease, new medical recommendations for treatment, and in some cases, newer, more effective medicines may play a larger role than increases in price in explaining increased spending trends.

Health & Productivity

Investing in worker health and, in the process, managing chronic health conditions and preventing disability and serious illness, can lead to both an increase in the quality of living for employees and cost savings for employers through productivity gains.

To encourage a healthier workforce, the National Pharmaceutical Council has sponsored a number of studies that examine the impact of worker health on productivity.

One two-part study found that employers who focus only on medical and pharmacy costs in creating employee health strategies may misidentify the health conditions that most impact the productivity of their employees -- while underestimating the impact of other factors. In particular, presenteeism -- when employees with health conditions are present at their jobs but are unable to perform at full capacity -- often causes a greater drain on a company’s productivity than employee absence.

Understanding these health conditions and other factors that impact their workforce can help employers to design an effective insurance benefit. One model that is increasingly being used by employers is value-based insurance design (VBID), which encourages the use of medically necessary therapies and services and reduces barriers to access for these services. Under a VBID program, the more clinically beneficial a therapy is for a patient, the lower the patient’s cost share.

And while the costs of chronic health conditions on employee productivity to employers are well documented, methodologies that accurately capture the impact that medicines may have on reducing those costs are limited. A study conducted by Tufts Medical Center and the National Pharmaceutical Council demonstrated a novel approach to estimate productivity, using depression and arthritis as case studies. The study found that therapies to treat depression yielded a 0.9 percent to 2.2 percent improvement in employee productivity. Taking medicine to treat arthritis or other musculoskeletal pains is associated with productivity gains of up to 0.5 percent.

Recognizing the full value of improved employee health, including improvements in workforce productivity, lost time and medical costs, is essential in helping employers seek the best value for their health investments.

Integrated Care

In health care, component management is the practice of separately managing individual cost drivers, such as prescription drugs, hospital admissions and doctor visits, instead of considering the underlying health issues of patients or total mix of features in a health care plan.

Through component management, health care plans try to lower costs by making changes specific to a cost driver. When prescription drugs are managed as a separate component, for example, there is no consideration given to the effects of appropriate drug use on the use of other medical services.

Restricting drug use through formularies or higher copayments might result in lower utilization of medicines, but studies have found that doing so can create higher costs through increased hospitalization and other health problems.

Medicaid Plan Pharmaceutical Resources

Concerns about access to health care in the early 1960s led to the establishment of Medicare, Medicaid and other state medical assistance programs. As a result, the National Pharmaceutical Council (NPC) turned a major portion of its attention to government policies relating to access to prescription drugs.

NPC developed a substantial body of information concerning government and third-party programs and established relationships with health care officials at the federal and state levels. Among the resources NPC developed was the “Compilation on State Welfare Drug Programs,” first published in 1963. This annual publication would later become NPC’s “Pharmaceutical Benefits Under State Medical Assistance Programs,” often referred to as “the Compilation.”

The data used to create each edition of the Compilation were assembled from numerous sources. The Compilation incorporated information on each state pharmacy program from an annual NPC survey of state Medicaid program administrators and pharmacy consultants, statistics from the Centers for Medicare and Medicaid Services (CMS), and information from other Federal agencies and organizations.

Although the Compilation was considered an invaluable resource by many public officials and private analysts, NPC ceased publication in 2007, when the organization turned its focus to evidence-based medicine. Past issues of the Compilation are available in the Research Library.

Medicare Part D Drug Benefit

Medicare is a health insurance program for:

• people age 65 or older,
• people under age 65 with certain disabilities, and
• people of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).

There are three main components to the program: Part A (hospital insurance); Part B (medical insurance); and Part D (prescription drug benefit), which was created in 2006. The addition of a Medicare drug benefit (Part D) was an unprecedented change to Medicare and brought with it the opportunity for all beneficiaries to enroll in coverage for prescription drugs. Under Part D, private insurance companies provide the coverage and beneficiaries choose the drug plan and pay a monthly premium.

To help Americans choose the best coverage for them in terms of cost and access, and find suggestions for what to do when they experience problems getting the medications they need, the National Pharmaceutical Council, in conjunction with 11 other organizations, developed the Your Pharmacy Benefit program, which featured a website and brochures (Your Pharmacy Benefit: Make It Work for You! and What to Do If Your Medicine Isn't Covered). NPC also supported research examining issues that states and lawmakers needed to take into consideration upon enactment of the drug benefit.

Medication Compliance/Adherence

Medication compliance (sometimes referred to as adherence) is generally defined as following a medication treatment plan developed by a patient’s health providers, filling prescriptions and taking medicines as prescribed.

In the United States, medication compliance is a growing problem, costing as much as $290 billion per year:

• Nearly 3 out of 4 Americans don’t take their medications as directed, resulting in serious health consequences;
• 1 out of 3 people never fill their prescriptions;
• Nearly 45% of the population has one or more chronic conditions that require medication; and
• More than 1/3 of medication-related hospital admissions are linked to poor compliance.*

As an increasing number of employers recognize the economic impact that non-compliance has in the workplace, many are developing compliance programs to help employees remain healthy, avoid lengthy hospitalizations or complications, and stay productive on the job.

Steps some employers are taking include targeted education and medication reminder programs, lowering co-payments or reducing out-of-pocket costs, and offering employee incentives to reward compliance.

Studies supported or conducted by the National Pharmaceutical Council in the past have examined the economic consequences related to medication non-compliance, as well as efforts the pharmaceutical industry has taken to address this issue. In particular, the development of modern drug delivery systems is helping to improve compliance by simplifying the dosing regimen and/or decreasing side effects for patients (i.e., once a day dose; localized drug delivery of medicated to its site of therapeutic action in the body).

*Script Your Future Campaign Overview.