Overview Healthcare payers (including health plans, large self-insured employers, the government, etc.) are greatly concerned about the healthcare cost, quality and outcome. They are trying to find and pursue innovative ways to better manage costs, and to improve quality and outcomes. Payer-pharma collaboration is one such way of containing costs and increasing efficiency. Payer-pharma collaboration allows a pharmaceutical company to gain patients whose healthcare policy covers the pharmaceutical company’s products under a payer’s healthcare policy guidelines. Payers are required to cover those pharmaceutical products believed to be necessary or “in demand” in their health policy at a competitive pricing from the pharmaceutical companies. Such collaborations also cover an essential marketing channel for the pharmaceutical companies. Need for payer-pharma collaborations Pharmaceutical companies are concerned about rising health expenditures, decreasing R&D efficiency, and increasing market competition. Payers, on the other hand, are being challenged by increasing transparency, greater patient influence, rising healthcare costs and more governmental involvement through new regulations. In 2012, USD325.7Bn was spent on prescription drugs in the United States. The average spending per person on medicines was USD865 during the year. However, 2012 saw a decline in medical expenditure (first time in last 58 years) due to factors such as use of cheap generic pills and people delaying treatment due to high cost of health care. Delayed treatment has resulted in increase in the number of patients admitted to hospitals after coming to the emergency department for the second straight year. This indicates that some people are waiting until they are very sick to seek medical help. IMS’ report notes that out-of-pocket costs, which exclude monthly health plan premiums, are now three times higher than they were five years ago, on average.1 These statistics indicate the need for payer-pharma collaboration to serve patients with affordable and better healthcare solutions, thereby increasing both the entities’ market value in a price competitive industry. Ways of improving payer-pharma collaborations 2 1. Holistic understanding through information sharing – Pharmaceutical manufacturers can help payers understand how the treatment of diseases is going to change in the future. Payers can similarly help pharmaceutical manufacturers with information such as risk pools in their various products, the mix of employer types that are most dominant in their client base, most outrageous cost drivers (pharmaceutical and non-pharmaceutical), diseases and conditions they are most focused on addressing, and new product and service offerings that they are planning to roll out.
CBS News: US prescription drug spending drops for the first time in 58 years IMS Health: Pharmacos and Payers – Achieving Common Ground in a Changing Market
Improving Payer-Pharma Collaboration to drive better Healthcare outcomes
Published on Jun 25, 2013