Sector News

Nonadherence costs pharma $600B-plus in annual sales: study

November 22, 2016
Life sciences

Pharma knows nonadherence costs it major money. But just how much money?

$637 billion in potential sales annually, with $250 billion in the U.S. alone last year, according to a new study. Coauthors HealthPrize and Capgemini repeated their research from 2012, when they found $564 billion in lost revenue globally and $188 billion in the U.S. That means the global tally has increased by 13%, and 33% in the U.S.

The attention on adherence more often focuses on the added medical costs to the healthcare system—estimated at $300 billion annually—and the cost in health outcomes for patients. Pharma companies have more recently joined the conversation with partnerships and programs that include adherence aims; efforts from Verily and Sanofi and IBM and Novo Nordisk have recently made news.

However, that’s a newer mindset. Until recently, pharma companies didn’t pay much attention to adherence because they didn’t have to, said Tom Kottler, CEO of HealthPrize Technologies, in an interview with FiercePharma.

“When large primary care drugs ruled the market and that’s where pharma made all their money, they would just get doctors to write more scripts,” he said. “… Pharma also used to make a lot of money just by raising prices, but I think that gravy train is coming to an end, considering what’s happening in the marketplace today.”

He added, “And I think pharma should want it to come to an end. They need to have less pressure on them from the marketplace in general and we think focusing on adherence is a way to do that.”

The benefits of working on adherence could be a boon for pharma, he said. Revenue grows, healthcare system costs decrease, patient health outcomes are better, and as a bonus—pharma’s reputation gets shinier.

But there’s a downside to pushing adherence that may be holding some pharma companies back. That’s the perception of drug “pushing,” with some critics suggesting that adherence programs are being used as marketing tools to get patients to fill and refill prescriptions.

While Kottler’s HealthPrize is an adherence software service company that could benefit from pharma attention, he is far from alone in advocating adherence. The proliferation of tech and pharma deals—along with the earlier mentions, Qualcomm has deals with both Novartis and Boehringer-Ingelheim—often have adherence goals baked in.

Research, too, has long pointed to the problems of noncomplaince. One of the most recent studies from IMS Institute focused on the costs of “suboptimal” drug adherence in a study on diabetes and found that among the U.S. Medicare population alone, $4 billion of spending was associated with poor Type 2 diabetes adherence and related complications. And government groups like the FDA and the National Institutes of Health have pushed calls to action to improve adherence.

With outcome-based healthcare on the rise, another group, payers are also likely to get involved in the adherence discussion.

By Beth Snyder Bulik

Source: Fierce Pharma

comments closed

Related News

February 25, 2024

Pharma CFOs need R&D vigilance in tough economic times

Life sciences

As inflation, high interest rates and a tight investment environment continue to create headaches, 72% of CFOs said economic volatility poses the same or greater risk to their business this year compared to 2023 in a recent survey from BDO — and there are more changes afoot.

February 25, 2024

Agilent CEO Mike McMullen to retire, succeeded by lab services head

Life sciences

McMullen, who’s also currently president of Agilent, is set to abdicate both roles on May 1, according to an announcement the company put out Wednesday afternoon. From there, McMullen will spend a few months serving as an advisor to Agilent and to his successor until his retirement becomes final on Oct. 31.

February 25, 2024

AstraZeneca completes Gracell Biotechnologies acquisition for $1.2bn

Life sciences

AstraZeneca has concluded its acquisition of China-based clinical-stage biopharmaceutical company Gracell Biotechnologies for $1.2bn. The acquisition, initially agreed in December 2023, positions Gracell as a wholly owned AstraZeneca subsidiary with operations continuing in the US and China.

How can we help you?

We're easy to reach