PHARMA BUSINESS MODEL
With average per-product returns constrained by tighter payer controls, and higher commercialization expenses, over $35 billion of cost reduction is needed through 2017 in order for large pharmaceutical manufacturers to maintain their current levels of research and development activities as well as their operating margin levels.
An expectation of continued cost reductions, with 45% of executives indicating cuts of more than 10% are planned over three years. Other survey data indicates a strong focus on optimizing commercial organizations, with over 80% of companies having an ongoing centralization initiative intended to balance centralized efficiencies and localized effectiveness.
Despite abundant and growing amounts of data being generated and accessed by life sciences companies, analytic systems designed to interpret and create actionable insights have not kept pace. Our survey revealed 74% of respondents expressing they have a high level of need for greater insights from data. As the mix of new medicines brought to market by pharmaceutical companies is skewing toward those with relatively small target patient populations, it is more important for analytic systems to help identify those patients and their physicians.
Source: IMS Institute for Healthcare Informatics
Prescriptions increased by 1.6% in 2013, 0.9% on a per capita basis, the second consecutive year reversing flat or declining prescription demand
- During the worst years of the economic crisis, from 2009 to 2011, prescription demand was largely insulated from slowing demand.
- Since the official end of the recession in June 2009, prescription demand has recovered relatively weakly.
- There is an important relationship between patients’ exposure to healthcare costs and their use of healthcare services and medicines, and while the broader economy recovered, there were forces acting on patients that were making some healthcare progressively less affordable.
• Prescription demand increased the most in the last decade with the implementation of Medicare part D in 2006.
• Of the past five years, only 2009, driven by the H1N1 flu season, had per capita prescription growth above 1%.
• The per capita prescription trend, which shows increasing demand for medicines year by year, provides a useful baseline for understanding the dramatic changes in the insured population and the expected impact on patients’ healthcare and prescription utilization in the future.
Changes in the utilization of healthcare and medicines
- Patient office visits grew by 2.7% in 2013, a reversal of four years of declines.
- Scheduled inpatient admissions account for only 2.4% of hospitalizations, but grew by 10.5%, which may be the result of some patients having rationed care in years past, and exacerbated their conditions.
- Inpatient hospital admissions via the emergency room represent only 2.5% of all admissions, and declined by 14.6%, perhaps as a response to policies that discourage ER usage.
- Emergency day visits actually increased slightly for all payers, showing that there is potentially more to be done to discourage inappropriate ER usage generally.
- There were 1.6% more prescriptions filled in 2013, an increase in growth of 0.4% over the level in 2012, but reflecting per capita growth of only 0.9%.
- Most therapy areas had small nominal increases, with the largest increases coinciding with some of the most used medicines.
- While cholesterol medicines were notable for their decline, this was more a response to an abnormally high level of prescriptions in the months following the expiry of Lipitor in November 2011, and not linked to recently revised cholesterol management guidelines.
- Pain medicines, particularly narcotics, showed declines largely attributed to the response to the FDA’s mandatory phased withdrawal of high-dose acetaminophen-containing opioid combinations, as well as to the removal of crushable forms of oxycodone and their replacement with abuse deterrent forms.
More than 27.4 million adults say they are a primary caregiver or caretaker.
Almost half of caregivers say they’ve been in this role for 5 years or more and 27% said 10 or more. Caregivers are key decision makers in healthcare management, especially as more baby boomers age.
Caregivers often influence and sometimes make healthcare decisions for patients. That’s why more marketers have added them to their target lists. Here are 5 facts from the study to help inform your next campaign.
- Caregivers are 64% more likely to read parent/child magazines and almost half read women’s magazines.
- This group of adults spends a lot of time at home during the day and their TV programming preferences reflect that. They are 38% more likely to watch day animation/cartoons and 40% more likely to watch daytime drama/soaps.
- Caregivers are 31% more likely to take part in gardening. Almost half (45%) of these adults read books regularly.
- They are 56% more likely to value drug company websites as healthcare information sources. They’re also more likely value advertisements as healthcare info sources; 44% said that due to a healthcare advertisement, they purchased a non-prescription product.
- They’re 26% more likely to rate their own health as fair or poor and 70% say they are very or somewhat stressed.
The over 50-year-old population of Internet health users:
- 78% say that the Internet is somewhat/very important as a health information source.
- 41% of these adults access the Internet daily.
- About half spend 2 hours or less online every day.
- They are 24% more likely to say that their reason for online health research in the past year was to research a medication after receiving a prescription.
- About 62% used social media on the Internet for health and wellness with 37% responding that they watched informational video clips about health and wellness.
- This group of adults is 47% more likely to click on interactive Internet advertisements about medications, products or services.
PHARMA SALES REPS
-Among U.S. drug makers, the annual cost per primary care rep ranges from $125,000 to $200,000. (Source: Cutting Edge)
-The average cost for a specialty rep was $228,000, while the average annual cost for hospital reps was $243,000, according to the report, which queried 61 drug and seven device makers late last year.
-The pharma industry shed 40,000 reps between 2006 and early 2013, according to ZS Associates.
-The average cost of making a sales call to a primary care physician, with samples, was $210, compared with $178 without samples.
-To visit a specialist, the average cost with samples was $285, but $267 without samples. And the average cost of a hospital visit was $260, which fell to $228 without samples.
-An average of only 10% of all interactions are spent using the Internet or mobile device to host webinars or interact with physicians by email.
-The average annual investment in electronic methods is $1.96 million.
-The average cost of training primary care sales reps is about $18,300, but $20,500 for specialty and nearly $21,900 for hospital reps.
-The average total compensation for a U.S. primary care district manager was $142,000, and $168,000 for a specialty sales manager, while district managers overseeing hospital reps received $186,000 (this included device makers). For regional managers, the average total compensation was between $180,000 and $250,000. Among those overseeing primary care reps, the average compensation was $204,000, which climbed to $220,000, for specialty regional managers and $229,000 for hospital regional managers.
The mobile health consumers are:
- 55% female
- 48% 18-34 (vs. 34% of total online population)
- 47% parents of children under 18 (vs. 38% of total online population)
- More actively engaged in their health: 7.2 million have asked for specific branded medication from their doctor to treat a condition in the last 12 months
- Smartphone users are 36% more likely than general population
- All mobile users are 24% more likely than general population
Further, users of smartphone/tablet for health are more likely to research health online for these reasons:
- In preparation for a doctor’s appointment
- To read reviews or ratings about doctors
- To read posts or stories from those with similar issues
- To learn about anti-aging procedures or products