Pharmaceutical Policy Research: U.S. Context

1
Pharmaceutical Policy Research U.S. Context

• September 20, 2004

2
Recent Headlines

• Power of drug makers challenged by government
• Strong warnings expected on antidepressants for
  kids
• Study highlights pill spitting risks
• F.B.I. says arrests disrupted trade in stolen and
  expired medicines
• Medicare site points out less costly drugs

.......
3
Trends in Medication Expenditures

• In 2001, Americans spent more than 140 billion
  on prescription drugs
• 11 of total personal health expenditures
• Americans are paying less out of pocket for drugs

Kaiser Family Foundation (2001)
4
Medication Use in Medicare 1997 vs. 2001

• Prescriptions per User 24
• Price per Prescription 26
• Percent Paid OOP -6

Moeller et al. Health Affairs (2004)
5
Contributions to Rising Drug Costs
28
48
24
In 2000, generic drugs represented 42.3 of all
drugs dispensed.
Kaiser Family Foundation (2001)
6
Top 5 Prescription Drugs, 2000
Ranked by No. Dispensed Rxs
Ranked by Dollar Sales

• Prilosec (anti-ulcerant)
• Lipitor (cholesterol-lowering)
• Prevacid (anti-ulcerant)
• Zocor (cholesterol-lowering)
• Prozac (anti-depressant)

• Lipitor
• Premarin (hormone replacement)
• Synthroid (thyroid replacement)
• Hydrocodone w/APAP (narcotic analgesic)
• Prilosec (anti-ulcerant)

Kaiser Family Foundation (2001)
7
Increases in Drug Spending in Medicare 1997 vs.
2001

• All Medicines 72
• Specific Medicines
• Antipsychotics 250
• Proton Pump Inhibitors 176
• Antihyperlipidemic agents 123
• Antidiabetic Agents 114
• Antidepressants 101

Among noninstitutionalized Medicare Beneficiaries
Moeller et al, Health Affairs (2004)
8
Tools for Reducing Medication Costs

• Reduce Use
• Limit Supply
• Lower Price

9
Private and Public Insurers Reducing Use and
Supply

• Tools employed by Medicaid programs to restrict
  use and supply
• Copays, prior authorization, preferred drug
  lists, drug or expenditure caps
• Tools used by employers to reduce/control use
• Tiered copays, preferred drug lists, formularies

Kaiser Family Foundation (2001, 2002)
10
Drug Company Influence Marketing to Prescribers
and Patients
Kaiser Family Foundation (2001)
11
Pricing and Regulation

• Average retail prices 19.33 (G) 65.29 (B) in
  2001
• RD17.1 of drug sales
• Pre Tax Net Profit 23.6 (Big Ph) 17.2 (G)
• Industry Regulation
• FDA
• Buying Power
• Medicaid Rebates
• Preferred Drug Lists
• Price Regulation?

Kaiser Family Foundation (2001)
12
Are We Getting Our Moneys Worth? Trends in
Medication Use Safety

• At least 50 of people do not benefit fully from
  medication use
• 49 of interventions to improve adherence are
  successful only 17 report improvements in
  health outcomes
• 100,000 deaths per year are attributed to Adverse
  Drug Events
• Drug related morbidity/mortality77B

AHRQ, CERT (2004) Bootman, RTxR.com (2004)
13
What is the role of pharmaceutical policy
research?

• To explore and explain trends in use, costs and
  coverage
• To estimate the impact of national, state, and
  local policy decisions on supply, use, costs, and
  outcomes
• To test interventions to maximize the benefit we
  receive from medicines
• To identify subgroups at risk for ADE and
  inappropriate use

14
What are the important research questions in 2004?

• Costs and Cost Containment
• Pricing and Regulation
• Safety in Prescribing and Cost Effectiveness
• Underuse, Overuse and Misuse of Medicines

• Patients
• Communities
• Populations/Disease Groups
• Clinicians
• Systems