The document provides an overview of Accountable Care Organizations (ACOs) and their relationship to the pharmaceutical industry. It discusses the goals of ACOs in improving quality of care while reducing costs. While initial results of ACOs are mixed, with some evidence of cost savings and improved quality, establishing the infrastructure has incurred significant start-up costs. The document also reviews the current pharmaceutical landscape and identifies opportunities for collaboration between ACOs and pharmaceutical companies, such as reducing hospital readmissions through better treatment adherence and education.
Medical devices equipped for the futureBrand Acumen
The document discusses disruptive changes underway in the medical devices industry that will transform it over the next 5 years. It identifies 5 major disruptors: 1) a power shift to payers and providers who are focusing more on cost and value-based evidence, 2) heightened regulatory scrutiny that is increasing compliance costs, 3) unclear sources of innovation as R&D spending yields diminishing returns, 4) new healthcare delivery models that are shifting care settings out of hospitals, and 5) a need to serve lower socioeconomic classes in developing markets. The disruptors threaten $34 billion in industry profits by 2020 but taking appropriate measures could help maintain revenue growth and offset margin declines, preserving significant value for medical device companies.
United States life sciences companies face numerous challenges in 2015 related to market changes, consolidation, pricing pressures, and health reform. Six key issues are highlighted: 1) Market reconfiguration and consolidation due to factors like expiring patents are driving the need for companies to reassess strategies and explore M&A opportunities. 2) Pricing pressures exist from government efforts to control costs and from health plans increasing efforts to reduce pharmaceutical costs. 3) Health reform is shifting the market to value-based care, requiring companies to demonstrate drugs' and devices' true value and economic impact compared to alternatives.
Opportunities and Barriers in Pharmaceutical Pricing: Average Manufacturer Pr...Epstein Becker Green
Part 2 of a webinar series that examines the average manufacturer price (“AMP”) Final Rule and its effect on drug pricing and contracting. Hosted by an Epstein Becker Green and EBG Advisors.
The long-awaited issuance of the Final Rule addressing AMP under the Medicaid Drug Rebate Program has provided clarity in some respects but left other issues open to interpretation. In the wake of the Final Rule, other regulatory developments are already showing signs of further impacting many of the same issues.
Using the AMP Final Rule as a baseline, we will address the evolution of some of the most significant issues affecting drug pricing and contracting. We hope you can attend one or both of the sessions in this two-part series.
In this session, Dr. Samuel R. Nussbaum, M.D., Strategic Consultant at EBG Advisors, and Lesley R. Yeung, Associate at Epstein Becker Green, will examine the pay-for-value and alternative approaches to pharmaceutical pricing. The speakers will discuss opportunities and barriers as well as highlight real-world examples.
http://www.ebglaw.com/events/the-effect-of-the-average-manufacturer-price-final-rule-on-drug-pricing-and-contracting-part-2-opportunities-and-barriers-in-pharmaceutical-pricing/
These materials have been provided for informational purposes only and are not intended and should not be construed to constitute legal advice. The content of these materials is copyrighted to Epstein Becker & Green, P.C. ATTORNEY ADVERTISING.
The document provides an overview and analysis of MedcoHealth Solutions (MHS), a pharmacy benefits manager. It describes MHS's business model, growth opportunities in specialty pharmacy and generics, competitive landscape, and financial projections. The Penn State Investment Association team recommends benching MHS until after its November 1 earnings report, citing risks around contract renewals and a lawsuit.
The healthcare supply chain faces increasing pressures from growing complexity, global demand, and quality issues. The current supply chain model will not be able to meet these challenges. Developing new capabilities around segmentation, agility, measurement, alignment and collaboration can help transform supply chain performance. This would lower costs, improve access to healthcare, and enhance patient safety, while also providing strategic benefits to companies. Transforming healthcare supply chains requires an integrated, cross-functional effort.
From Research to Revenue IV: Capturing Business Opportunities in AsiaGHBN
A full collection of the presentations made Wednesday, December 3, 2008 at Mississauga Living Arts Centre for From Research to Revenue IV: Capturing Business Opportunities in Asia.
The document discusses the potential impact of accountable care organizations (ACOs) on biopharmaceutical reimbursement and access in the United States based on a survey of medical directors. Key points:
- The survey found that medical directors anticipate ACOs will increase emphasis on clinical pathways and provider value scrutiny. They also expect higher thresholds for acceptance of new technologies and potential changes to contracting terms.
- This suggests manufacturers need to understand how ACO models may impact technology acceptance and uptake. They should consider overall relative value, fit within care pathways, and the increasing role of providers as gatekeepers to access.
- Background information provides context on the rise of ACOs in the US healthcare system and how they differ from
McKinsey Sağlık Tedarik Zinciriyle, FMCG Tedarik Zinciri karşılaştırıyor. Sağlık Tedarik Zincirindeki iyileştirme fırsatına ve toplumsal boyutuna dikkat çekiyor.
Medical devices equipped for the futureBrand Acumen
The document discusses disruptive changes underway in the medical devices industry that will transform it over the next 5 years. It identifies 5 major disruptors: 1) a power shift to payers and providers who are focusing more on cost and value-based evidence, 2) heightened regulatory scrutiny that is increasing compliance costs, 3) unclear sources of innovation as R&D spending yields diminishing returns, 4) new healthcare delivery models that are shifting care settings out of hospitals, and 5) a need to serve lower socioeconomic classes in developing markets. The disruptors threaten $34 billion in industry profits by 2020 but taking appropriate measures could help maintain revenue growth and offset margin declines, preserving significant value for medical device companies.
United States life sciences companies face numerous challenges in 2015 related to market changes, consolidation, pricing pressures, and health reform. Six key issues are highlighted: 1) Market reconfiguration and consolidation due to factors like expiring patents are driving the need for companies to reassess strategies and explore M&A opportunities. 2) Pricing pressures exist from government efforts to control costs and from health plans increasing efforts to reduce pharmaceutical costs. 3) Health reform is shifting the market to value-based care, requiring companies to demonstrate drugs' and devices' true value and economic impact compared to alternatives.
Opportunities and Barriers in Pharmaceutical Pricing: Average Manufacturer Pr...Epstein Becker Green
Part 2 of a webinar series that examines the average manufacturer price (“AMP”) Final Rule and its effect on drug pricing and contracting. Hosted by an Epstein Becker Green and EBG Advisors.
The long-awaited issuance of the Final Rule addressing AMP under the Medicaid Drug Rebate Program has provided clarity in some respects but left other issues open to interpretation. In the wake of the Final Rule, other regulatory developments are already showing signs of further impacting many of the same issues.
Using the AMP Final Rule as a baseline, we will address the evolution of some of the most significant issues affecting drug pricing and contracting. We hope you can attend one or both of the sessions in this two-part series.
In this session, Dr. Samuel R. Nussbaum, M.D., Strategic Consultant at EBG Advisors, and Lesley R. Yeung, Associate at Epstein Becker Green, will examine the pay-for-value and alternative approaches to pharmaceutical pricing. The speakers will discuss opportunities and barriers as well as highlight real-world examples.
http://www.ebglaw.com/events/the-effect-of-the-average-manufacturer-price-final-rule-on-drug-pricing-and-contracting-part-2-opportunities-and-barriers-in-pharmaceutical-pricing/
These materials have been provided for informational purposes only and are not intended and should not be construed to constitute legal advice. The content of these materials is copyrighted to Epstein Becker & Green, P.C. ATTORNEY ADVERTISING.
The document provides an overview and analysis of MedcoHealth Solutions (MHS), a pharmacy benefits manager. It describes MHS's business model, growth opportunities in specialty pharmacy and generics, competitive landscape, and financial projections. The Penn State Investment Association team recommends benching MHS until after its November 1 earnings report, citing risks around contract renewals and a lawsuit.
The healthcare supply chain faces increasing pressures from growing complexity, global demand, and quality issues. The current supply chain model will not be able to meet these challenges. Developing new capabilities around segmentation, agility, measurement, alignment and collaboration can help transform supply chain performance. This would lower costs, improve access to healthcare, and enhance patient safety, while also providing strategic benefits to companies. Transforming healthcare supply chains requires an integrated, cross-functional effort.
From Research to Revenue IV: Capturing Business Opportunities in AsiaGHBN
A full collection of the presentations made Wednesday, December 3, 2008 at Mississauga Living Arts Centre for From Research to Revenue IV: Capturing Business Opportunities in Asia.
The document discusses the potential impact of accountable care organizations (ACOs) on biopharmaceutical reimbursement and access in the United States based on a survey of medical directors. Key points:
- The survey found that medical directors anticipate ACOs will increase emphasis on clinical pathways and provider value scrutiny. They also expect higher thresholds for acceptance of new technologies and potential changes to contracting terms.
- This suggests manufacturers need to understand how ACO models may impact technology acceptance and uptake. They should consider overall relative value, fit within care pathways, and the increasing role of providers as gatekeepers to access.
- Background information provides context on the rise of ACOs in the US healthcare system and how they differ from
McKinsey Sağlık Tedarik Zinciriyle, FMCG Tedarik Zinciri karşılaştırıyor. Sağlık Tedarik Zincirindeki iyileştirme fırsatına ve toplumsal boyutuna dikkat çekiyor.
The document provides an analysis of the healthcare sector. It discusses the industries that make up the sector, including pharmaceuticals, biotechnology, medical devices, health insurers, hospitals, and more. It analyzes the sector's performance, valuation metrics, macroeconomic factors like government spending and regulation, and demographic trends. Several investment firms are cited that believe the sector will continue growing due to an aging population but also face volatility due to the election and drug pricing debates. Biotech companies are seen as particularly promising for outperformance.
Unique Device Identification and GS1: Defining Elements in the Future of Glob...Loftware
This white paper, as the title suggests, is about new national and international mandates for a global standard to be used
in the Unique Device Identification (UDI) of medical devices and other healthcare products. It examines the global trading
opportunities, on an enormous scale, that can be captured by early adopters or forfeited by default by those who wait,
dismiss the idea, or discount the powerful market and competitive forces that UDI developments are driving. Also offered
is a starting blueprint for regulatory compliance professionals, packaging engineers, C-suite executives and manufacturing experts who agree the time to start meeting the UDI opportunity has clearly arrived.
BJC HealthCare and Medtronic won awards for innovative supply chain initiatives in healthcare. BJC partnered with Cardinal Health and Cook Medical to centralize medical device inventory, providing visibility and reducing costs. Medtronic developed a program to manage hospital cath labs end-to-end, creating cost savings and improved outcomes for providers. Both winners demonstrated collaboration across the healthcare value chain can improve efficiency, lower costs and enhance patient care.
Tahmin ve internet tabanlı kolaylaştırmaya dayalı bir çalışma. Haiti' de elektrik kesintileri, internet erişim kesintileri, İngilizce - Fransızca - yerel dil, düşük eğitim profili, ada olmaktan kaynaklanan lojistik zorluk, fakirlik, kolera salgını,... engellere rağmen iyileşme sağlanmış.
The document discusses challenges facing healthcare systems and the need for transformation. It outlines four potential scenarios for 2015 based on how systems address drivers of change and inhibitors. The "lose-lose" scenario involves growing access/quality issues, blunt cost cuts, and loss of public support for universal healthcare. To achieve a "win-win" scenario, systems must focus on value, develop better consumers, and create better care options.
PBMs Presentation (Holden Young - Roseman University of Health Sciences)HoldenYoung3
PBMs are companies that manage pharmacy benefits on behalf of payers like health insurers and employers. They negotiate drug prices, create formularies, and provide services like drug utilization reviews. The top 3 PBMs, CVS Caremark, OptumRx, and Express Scripts, account for 76% of prescription claims in the US. PBMs make money through rebates from drug manufacturers, service fees, and keeping the difference between the drugs' discounted prices and what they reimburse pharmacies. They have faced criticism for lack of transparency in their business practices and drug pricing.
McKesson delivered solid financial performance in Fiscal 2004 with 22% revenue growth and 16% earnings per share growth. Over the past four years, McKesson achieved compound annual revenue growth of over 17% and earnings per share growth of 36%. Organizational changes and operating improvements are expected to drive continued revenue and earnings growth in Fiscal 2005.
This document discusses strategic trends in the healthcare industry, with a focus on opportunities around data and informatics. It notes that healthcare data has expanded significantly due to regulations, technology adoption, and data digitization. This has transformed business processes across biopharma, pharmacies, managed care, and point-of-care. International healthcare markets continue to see higher growth than the US. The pharmaceutical model is also evolving from large trials and blockbuster drugs to smaller trials and specialty/orphan drugs. The document identifies potential growth areas around aggregating different types of healthcare data.
This document discusses new strategies for pharmaceutical companies to bundle complementary products and services around drugs to improve outcomes for chronic diseases. Traditionally, healthcare products and services are evaluated and reimbursed individually, but this limits optimization for diseases like diabetes where costs are driven more by complications than individual treatments. The document explores bundling strategies like capitation payments and value-added services around drugs. However, patent expirations threaten many drug franchises in cardiovascular and respiratory areas. For combination solutions to succeed, companies need to demonstrate improved outcomes from integrated products and services compared to individual components.
Express Scripts is the largest pharmacy benefits management (PBM) company in the US. The analyst issues a hold recommendation due to limited growth opportunities, as industry consolidation has reduced potential M&A targets and prescription growth is forecast to slow. Further growth through acquisitions or increased profit margins is unlikely without changes such as major patent expirations or industry consolidation. The current stock price of $70 is considered fairly valued based on future growth prospects in the PBM industry.
Global pharmaceutical companies are modeled with a supply chain, which ensures that the right drug reaches the right people at the right time and in the right condition. The supply chain also ensures 100% product availability at optimum cost by carrying huge inventory, which maintains 100% fill rate. Manufacturers are trying to cut down development time to save costs. For example, a drug manufacturer who can trim development time by 19% can save up to USD 100 million. But if a drug is getting delayed to reach the market, the time delay costs the company around USD 1 million a day. So, pharmaceutical companies today are designing the supply chain to be as responsive as possible to reduce entry time to the market thereby increasing profit margins.
Global Pharmaceutical Contract Manufacturing Resource Pack 2011Veronica Araujo
This document provides an overview of the global pharmaceutical contract manufacturing industry. It discusses key reasons why pharmaceutical companies outsource manufacturing, including lack of internal capacity, expertise, and the potential for cost savings. The most commonly outsourced areas of production are finished medicines. Emerging markets like India, China, and others offer lower costs and are attractive outsourcing destinations. However, outsourcing also presents challenges such as language/cultural barriers, meeting regulatory/quality requirements, and managing distant relationships. Overall, cost savings remain the top motivation for the 60% of pharmaceutical and biopharmaceutical manufacturing that is outsourced globally.
White Paper: Best Practices for Medical Benefit Management (MBM)Tai Freligh
Biologic, biotechnology-based, rare disease, or high-cost pharmaceuticals — collectively known as specialty drugs — can be covered under the pharmacy benefit, the medical benefit, or both depending on the benefit design plan sponsors require of the third-party administrator (including the pharmacy benefit manager – PBM; administrative service organization – ASO; or any administrator of a medical or pharmacy benefit).
On average, up to 50% of specialty drugs today are covered under the medical benefit.
With the exception of a few key therapy areas, traditional tools used to manage specialty drugs under the medical benefit, such as prior authorizations and medical benefit carve-outs (i.e., “white-bagging”), have yielded limited value to plan sponsors.
This thought leadership analysis, with insights from recognized industry experts, will provide an overview of the challenges.
Download the complete white paper to get the rest of the report, including a summary of the key issues plan sponsors must address and insights into best practices through an innovative new approach, Medical Benefit Drug Management (MBM).
Link: http://www.PharMedQuest.com/White-Paper
The document recommends an overweight position in the healthcare biotechnology industry. Major companies are seeing double digit revenue growth and high profit margins due to limited competition from patents. However, government regulation poses a threat if it imposes price caps or reduces patent lives. Additionally, companies rely on a small number of "star drugs" whose expiration or replacement could significantly harm their value.
This document discusses the financial challenges facing hospital CFOs as the healthcare system transitions to value-based care. It notes that healthcare costs are rising faster than GDP and revenues, driven by factors like legislation and an aging population. This is putting pressure on CFOs to control costs. The top priorities for capital expenditures according to a survey are mergers and acquisitions to gain efficiencies of scale, investing in clinical technology and new facilities to improve patient care and outcomes, and transition to value-based models. Reduced reimbursements from Medicare, Medicaid, and insurance exchanges are a major concern as they squeeze hospital margins. CFOs must allocate scarce capital to address these challenges while implementing electronic medical records and meeting other regulatory requirements.
The document discusses four key concepts for medical device executives to understand in order to succeed in China's rapidly growing medical devices market. First, executives must seize China's market opportunities as the market is expected to reach $50 billion by 2017. Second, they must understand the Chinese government's important role in regulating the industry and procurement processes. Third, executives should monitor healthcare reforms that could impact market access. Fourth, local competition is growing, so companies must balance global and local strategies to stay competitive. The medical devices market in China offers great potential for growth but also complexity that executives must navigate carefully.
Diplomat Pharmacy Inc - November 2016 Investors PresentationDiplomatIR
Diplomat is a specialty pharmacy focused on oncology and other complex chronic conditions. It has grown revenue at a 42% CAGR from 2010-2015 through both organic growth and acquisitions. Diplomat provides specialty pharmacy services and additional services like hub services and infusion. It has over 100 limited distribution drugs in its portfolio. Recent performance has been strong with 52% revenue growth in 2015 and adjusted EBITDA growth, however DIR fees are a new challenge being addressed through legislation, discussions with CMS, and business strategies.
This document provides an agenda for the Pharmaceutical Strategic Pricing conference taking place on October 5-6, 2015 in Philadelphia, PA. The conference will focus on adapting pricing strategies to changing regulations and payer expectations while maximizing profitability and patient access. Presenters will include representatives from pharmaceutical companies, payers, pharmacy benefit managers, and experts. Topics will include pricing transparency, generics, communicating value to payers, state Medicaid programs, innovative contracting models, and ensuring coverage of specialty drugs.
Dsp investor deck march 2017 barclays 030917DiplomatIR
Diplomat is a specialty pharmacy company that provides medications and services to patients. It has a national footprint and focuses on specialty drugs, which are high-cost drugs that treat complex, chronic conditions like cancer. Diplomat controls the process of getting specialty drugs to patients and collects data for drug manufacturers. It has over 100 limited distribution drugs in its portfolio, which are specialty drugs that Diplomat has exclusive or preferred rights to distribute. Diplomat has experienced strong revenue and profit growth in recent years driven by the growing specialty drug market and its shifting portfolio toward higher-priced specialty drugs.
How does your media product represent particular social groups?vanessaogunbowale
Question 2 of my evaluation- How does your media product represent particular social groups? This powerpoint entails the analysis of social groups featured in my opening sequence.
The document discusses feedback from showing a printed photo of a digipak and advert to 6 people fitting the target audience on Oxford Street. The people provided feedback on the items they were shown.
The document provides an analysis of the healthcare sector. It discusses the industries that make up the sector, including pharmaceuticals, biotechnology, medical devices, health insurers, hospitals, and more. It analyzes the sector's performance, valuation metrics, macroeconomic factors like government spending and regulation, and demographic trends. Several investment firms are cited that believe the sector will continue growing due to an aging population but also face volatility due to the election and drug pricing debates. Biotech companies are seen as particularly promising for outperformance.
Unique Device Identification and GS1: Defining Elements in the Future of Glob...Loftware
This white paper, as the title suggests, is about new national and international mandates for a global standard to be used
in the Unique Device Identification (UDI) of medical devices and other healthcare products. It examines the global trading
opportunities, on an enormous scale, that can be captured by early adopters or forfeited by default by those who wait,
dismiss the idea, or discount the powerful market and competitive forces that UDI developments are driving. Also offered
is a starting blueprint for regulatory compliance professionals, packaging engineers, C-suite executives and manufacturing experts who agree the time to start meeting the UDI opportunity has clearly arrived.
BJC HealthCare and Medtronic won awards for innovative supply chain initiatives in healthcare. BJC partnered with Cardinal Health and Cook Medical to centralize medical device inventory, providing visibility and reducing costs. Medtronic developed a program to manage hospital cath labs end-to-end, creating cost savings and improved outcomes for providers. Both winners demonstrated collaboration across the healthcare value chain can improve efficiency, lower costs and enhance patient care.
Tahmin ve internet tabanlı kolaylaştırmaya dayalı bir çalışma. Haiti' de elektrik kesintileri, internet erişim kesintileri, İngilizce - Fransızca - yerel dil, düşük eğitim profili, ada olmaktan kaynaklanan lojistik zorluk, fakirlik, kolera salgını,... engellere rağmen iyileşme sağlanmış.
The document discusses challenges facing healthcare systems and the need for transformation. It outlines four potential scenarios for 2015 based on how systems address drivers of change and inhibitors. The "lose-lose" scenario involves growing access/quality issues, blunt cost cuts, and loss of public support for universal healthcare. To achieve a "win-win" scenario, systems must focus on value, develop better consumers, and create better care options.
PBMs Presentation (Holden Young - Roseman University of Health Sciences)HoldenYoung3
PBMs are companies that manage pharmacy benefits on behalf of payers like health insurers and employers. They negotiate drug prices, create formularies, and provide services like drug utilization reviews. The top 3 PBMs, CVS Caremark, OptumRx, and Express Scripts, account for 76% of prescription claims in the US. PBMs make money through rebates from drug manufacturers, service fees, and keeping the difference between the drugs' discounted prices and what they reimburse pharmacies. They have faced criticism for lack of transparency in their business practices and drug pricing.
McKesson delivered solid financial performance in Fiscal 2004 with 22% revenue growth and 16% earnings per share growth. Over the past four years, McKesson achieved compound annual revenue growth of over 17% and earnings per share growth of 36%. Organizational changes and operating improvements are expected to drive continued revenue and earnings growth in Fiscal 2005.
This document discusses strategic trends in the healthcare industry, with a focus on opportunities around data and informatics. It notes that healthcare data has expanded significantly due to regulations, technology adoption, and data digitization. This has transformed business processes across biopharma, pharmacies, managed care, and point-of-care. International healthcare markets continue to see higher growth than the US. The pharmaceutical model is also evolving from large trials and blockbuster drugs to smaller trials and specialty/orphan drugs. The document identifies potential growth areas around aggregating different types of healthcare data.
This document discusses new strategies for pharmaceutical companies to bundle complementary products and services around drugs to improve outcomes for chronic diseases. Traditionally, healthcare products and services are evaluated and reimbursed individually, but this limits optimization for diseases like diabetes where costs are driven more by complications than individual treatments. The document explores bundling strategies like capitation payments and value-added services around drugs. However, patent expirations threaten many drug franchises in cardiovascular and respiratory areas. For combination solutions to succeed, companies need to demonstrate improved outcomes from integrated products and services compared to individual components.
Express Scripts is the largest pharmacy benefits management (PBM) company in the US. The analyst issues a hold recommendation due to limited growth opportunities, as industry consolidation has reduced potential M&A targets and prescription growth is forecast to slow. Further growth through acquisitions or increased profit margins is unlikely without changes such as major patent expirations or industry consolidation. The current stock price of $70 is considered fairly valued based on future growth prospects in the PBM industry.
Global pharmaceutical companies are modeled with a supply chain, which ensures that the right drug reaches the right people at the right time and in the right condition. The supply chain also ensures 100% product availability at optimum cost by carrying huge inventory, which maintains 100% fill rate. Manufacturers are trying to cut down development time to save costs. For example, a drug manufacturer who can trim development time by 19% can save up to USD 100 million. But if a drug is getting delayed to reach the market, the time delay costs the company around USD 1 million a day. So, pharmaceutical companies today are designing the supply chain to be as responsive as possible to reduce entry time to the market thereby increasing profit margins.
Global Pharmaceutical Contract Manufacturing Resource Pack 2011Veronica Araujo
This document provides an overview of the global pharmaceutical contract manufacturing industry. It discusses key reasons why pharmaceutical companies outsource manufacturing, including lack of internal capacity, expertise, and the potential for cost savings. The most commonly outsourced areas of production are finished medicines. Emerging markets like India, China, and others offer lower costs and are attractive outsourcing destinations. However, outsourcing also presents challenges such as language/cultural barriers, meeting regulatory/quality requirements, and managing distant relationships. Overall, cost savings remain the top motivation for the 60% of pharmaceutical and biopharmaceutical manufacturing that is outsourced globally.
White Paper: Best Practices for Medical Benefit Management (MBM)Tai Freligh
Biologic, biotechnology-based, rare disease, or high-cost pharmaceuticals — collectively known as specialty drugs — can be covered under the pharmacy benefit, the medical benefit, or both depending on the benefit design plan sponsors require of the third-party administrator (including the pharmacy benefit manager – PBM; administrative service organization – ASO; or any administrator of a medical or pharmacy benefit).
On average, up to 50% of specialty drugs today are covered under the medical benefit.
With the exception of a few key therapy areas, traditional tools used to manage specialty drugs under the medical benefit, such as prior authorizations and medical benefit carve-outs (i.e., “white-bagging”), have yielded limited value to plan sponsors.
This thought leadership analysis, with insights from recognized industry experts, will provide an overview of the challenges.
Download the complete white paper to get the rest of the report, including a summary of the key issues plan sponsors must address and insights into best practices through an innovative new approach, Medical Benefit Drug Management (MBM).
Link: http://www.PharMedQuest.com/White-Paper
The document recommends an overweight position in the healthcare biotechnology industry. Major companies are seeing double digit revenue growth and high profit margins due to limited competition from patents. However, government regulation poses a threat if it imposes price caps or reduces patent lives. Additionally, companies rely on a small number of "star drugs" whose expiration or replacement could significantly harm their value.
This document discusses the financial challenges facing hospital CFOs as the healthcare system transitions to value-based care. It notes that healthcare costs are rising faster than GDP and revenues, driven by factors like legislation and an aging population. This is putting pressure on CFOs to control costs. The top priorities for capital expenditures according to a survey are mergers and acquisitions to gain efficiencies of scale, investing in clinical technology and new facilities to improve patient care and outcomes, and transition to value-based models. Reduced reimbursements from Medicare, Medicaid, and insurance exchanges are a major concern as they squeeze hospital margins. CFOs must allocate scarce capital to address these challenges while implementing electronic medical records and meeting other regulatory requirements.
The document discusses four key concepts for medical device executives to understand in order to succeed in China's rapidly growing medical devices market. First, executives must seize China's market opportunities as the market is expected to reach $50 billion by 2017. Second, they must understand the Chinese government's important role in regulating the industry and procurement processes. Third, executives should monitor healthcare reforms that could impact market access. Fourth, local competition is growing, so companies must balance global and local strategies to stay competitive. The medical devices market in China offers great potential for growth but also complexity that executives must navigate carefully.
Diplomat Pharmacy Inc - November 2016 Investors PresentationDiplomatIR
Diplomat is a specialty pharmacy focused on oncology and other complex chronic conditions. It has grown revenue at a 42% CAGR from 2010-2015 through both organic growth and acquisitions. Diplomat provides specialty pharmacy services and additional services like hub services and infusion. It has over 100 limited distribution drugs in its portfolio. Recent performance has been strong with 52% revenue growth in 2015 and adjusted EBITDA growth, however DIR fees are a new challenge being addressed through legislation, discussions with CMS, and business strategies.
This document provides an agenda for the Pharmaceutical Strategic Pricing conference taking place on October 5-6, 2015 in Philadelphia, PA. The conference will focus on adapting pricing strategies to changing regulations and payer expectations while maximizing profitability and patient access. Presenters will include representatives from pharmaceutical companies, payers, pharmacy benefit managers, and experts. Topics will include pricing transparency, generics, communicating value to payers, state Medicaid programs, innovative contracting models, and ensuring coverage of specialty drugs.
Dsp investor deck march 2017 barclays 030917DiplomatIR
Diplomat is a specialty pharmacy company that provides medications and services to patients. It has a national footprint and focuses on specialty drugs, which are high-cost drugs that treat complex, chronic conditions like cancer. Diplomat controls the process of getting specialty drugs to patients and collects data for drug manufacturers. It has over 100 limited distribution drugs in its portfolio, which are specialty drugs that Diplomat has exclusive or preferred rights to distribute. Diplomat has experienced strong revenue and profit growth in recent years driven by the growing specialty drug market and its shifting portfolio toward higher-priced specialty drugs.
How does your media product represent particular social groups?vanessaogunbowale
Question 2 of my evaluation- How does your media product represent particular social groups? This powerpoint entails the analysis of social groups featured in my opening sequence.
The document discusses feedback from showing a printed photo of a digipak and advert to 6 people fitting the target audience on Oxford Street. The people provided feedback on the items they were shown.
The document lists words containing different vowel sounds. It includes a list of words containing the /3:/ sound such as "girl", "third", "church", and "nurse". Students are instructed to work in groups and write down words containing the /3:/, /o:/, and other sounds.
O documento discute o conceito e formalidades do aceite em títulos de crédito como letras de câmbio. O aceite é a declaração do sacado de que pagará o título no vencimento, tornando-se o devedor principal. Pode ser expresso ou parcial, alterando a data ou valor de pagamento. Sem aceite, o sacador permanece como devedor principal e o sacado não assume obrigações.
Qudus discusses the concept for a music video for an upbeat dubstep/trap song. The core audience is young adults who enjoy partying and this genre of music. The wider audience includes those aged 25+ who generally like dubstep/trap. A consistent font and images of the artist will be used across the promotional video, digital packaging, and advertisements to visually link these elements together.
Evaluasi penyelenggaraan Diklat ini berfungsi untuk memperbaiki dan menambah kualitas penyelenggaraan Diklat Kabupaten Pakpak Bharat ke depannya. Disusun oleh Ika Ariyani, S.Sos NIP.198601082005022003
Untuk mewujudkan lembaga Diklat yang profesional, diperlukan upaya-upaya yang harus dikerjakan demi pengembangan SDM Aparatur Sipil Negara yang berkualitas. Disusun oleh Ika Ariyani Nahampun NIP.198601082005022003
What kind of media institution might distribute your media product and why?vanessaogunbowale
The document discusses potential media institutions that could distribute an independent film called "Uncovered". It suggests that Pathe UK would be a good choice as they have experience distributing similar independent thriller films on a limited basis to art house cinemas. Specifically, Pathe UK distributed the independent thriller "Memento" which similarly challenges thriller conventions through its plot structure and protagonist interactions, making it a good comparison to "Uncovered".
Este documento presenta ejercicios resueltos de ecuaciones diferenciales. Se resuelven ecuaciones diferenciales ordinarias de primer y segundo orden utilizando métodos como separación de variables, factores integrables y métodos de reducción de orden. También se resuelven ecuaciones diferenciales lineales de primer orden mediante el uso de factores integrables y la técnica de variables separables.
Historically, the medical device industry has been highly attractive and relatively stable. As a consequence, established players have been able to compete successfully across the device spectrum, applying common business models and processes without much need for differentiation.
The future, however, is very different as disruptive change is underway. Companies will need to look at new segments and offer end-to-end solutions to secure additional revenue and maintain their profit margins.
Read Logica’s paper on the need for convergence of healthcare and pharmaCGI
As the biggest industry sector in most European economies, healthcare is already given a big chunk of the gross domestic product (GDP). This portion is expected to become even bigger and have a huge impact on employment, the opportunities to grow businesses and economies in general.
This document is a coversheet for a coursework submission to UCL's Department of Philosophy. It provides instructions for students, including declaring that the work is their own and meets academic integrity standards. It notes the module code and title, word count, candidate number, and level. It reminds students not to include their name. The work must also be submitted digitally by the deadline.
The healthcare ecosystem is rapidly changing as it transitions to Pharma 3.0. In the past year, pharmaceutical companies have expanded their Pharma 3.0 initiatives by 78%, with nearly half of all initiatives launched in 2010 alone. However, pharmaceutical companies are still investing much less in Pharma 3.0 business model innovation than non-traditional players, who have invested an estimated $20 billion. The ecosystem has also grown more complex, as initiatives have expanded across more disease areas, technologies, and stages of care. The rapid rise of mobile health apps, especially smartphone apps, has been a major driver of new Pharma 3.0 initiatives. However, pharmaceutical investment in Pharma 3.0 remains far below what is needed
Analysis of drivers that cause restricted access to funding for smaller biotech companies.
A detailed reviewed of the steps
venture capitalists and companies are
taking — models such as fail-fast R&D, asset-centric funding and more.
Proposal of a model that
could radically change R&D by taking a
much more holistic approach to drug
development, sharing information to
learn in real time across the cycle of care
and fundamentally changing how risk
and reward are allocated.
Accountable Care Organizations and The Medicare Shared Savings ProgramPhytel
Population Health Management, Enabled by Information Technology, Will Be Critical To Success. In 2012, the Centers for Medicare and Medicaid Services (CMS) will launch a shared-savings program with accountable care organizations (ACOs). ACOs that meet specified quality goals will be able to split with CMS any savings that surpass a minimum level. The challenge facing ACOs is choosing the right information technologies so they can track the health status of and the care provided to every one of their patients to produce significant savings or meet the quality benchmarks of CMS
Healthcare reform: Five trends to watch as the Affordable Care Act turns fivePwC
In its first five years, the Affordable Care Act (ACA) has had a profound, and likely irreversible, impact on the business of healthcare. Industry leaders must rethink strategies to remain relevant in a post-ACA world.
Web Page: http://www.pwc.com/us/acahealthreform
Healthcare systems around the world are fraught with challenges that reveal the cracks in today's operating models. But a nascent trend that is quickly becoming an imperative is poised to transform the industry: the consumerization of healthcare. By promoting and supporting more control, awareness, and responsibility on the part of the consumer, healthcare companies can drive a dramatic improvement in population health and reduction in costs.
FDA Promotes Transparency, Collaboration for 2018Georgia_Bull
The Food and Drug Administration (FDA) prepares to shake up its traditional processes in the hopes of improving quality patient care and driving down the costs of drugs.
The document analyzes and dispels five common myths about the drug delivery industry. It argues that far from being a declining sector, drug delivery has delivered steady product approvals over the past decade and continues to be an important source of new products. It also contends that the drug delivery market is growing, drug delivery business models can be sustainable, product line extensions using drug delivery technologies are effective strategies, and drug delivery companies offer diverse technologies, not just similar controlled release solutions.
This document analyzes and dispels five common myths about the drug delivery industry. It argues that drug delivery has delivered many new products, the market is growing not declining, the business model can be sustainable, product line extensions using drug delivery approaches are effective strategies, and drug delivery companies offer diverse technologies, not just similar controlled release solutions. The drug delivery industry plays a key role in addressing challenges in pharma by developing improved treatment options.
Consumer-Centric Healthcare: 2015--The Tipping Point Has Arrived (Report by William Blair)
Consumers—in tandem with disruptive healthcare technology and healthcare services providers—are the key to solving many of US healthcare's woes, particularly the unsustainably high cost of care.
Public exchanges, private exchanges, and high-deductible health plans are growing quickly. Disruptive forces of competition will create a lower-cost system that promotes the growth of highly efficient, low-cost, and high-quality providers and technologies.
The continued movement of financial and quality risk back to providers (and increasingly to consumers themselves) is encouraging providers and consumers to seek preventive medicine, cost efficiency, clinical efficacy, and overall value in healthcare. In turn, this could drive significant change regarding the primary point of care delivery (rapidly moving outside the hospital), the overall cost of healthcare and investment decisions made by healthcare providers.
Consumer-centric healthcare providers will experience strong top- and bottom-line growth over the coming years. Investors in both the public and private-equity markets will achieve superior long-term returns by identifying and investing in these companies.
1) Express Scripts is the largest pharmacy benefit manager (PBM) in the US but faces slowing growth as its core business reaches maturity. It lacks a compelling valuation and trades around its estimated fair value.
2) Intensifying competition in the pharmaceutical industry may lead to price wars that threaten Express Scripts' business model of aggressively negotiating lower drug prices.
3) Given Express Scripts' maturing business and risks to future growth, investors have an opportunity to realize gains by selling their shares in the company.
New Health Report 2012 - Media Briefing Deck Quintiles
The document summarizes the key findings of the 2012 New Health Report survey conducted by Quintiles. The survey gathered responses from over 1,350 stakeholders in the biopharmaceutical industry, managed care organizations, investors, and patients in the US and UK. The report found that stakeholders have differing views on risk tolerance and perceptions of healthcare quality. It also found that current tools for assessing risk are limited and better data is needed. Overall, the report aims to foster collaboration between stakeholders to improve innovation in pharmaceutical development and delivery.
This document discusses Optum winning the 2018 North American Population Health Management Company of the Year Award. It outlines the challenges in population health management, and how Optum addresses these challenges through its integrated approach leveraging advanced analytics, care coordination, quality reporting, and clinical programs. Optum provides superior capabilities in quality/clinical integration, risk stratification, provider network management, care coordination, and patient engagement to advance cost-effective population health management.
McKesson delivered solid financial performance in Fiscal 2004 with 22% revenue growth and 16% earnings per share growth. Over the past four years, McKesson achieved compound annual revenue growth of over 17% and earnings per share growth of 36%. Organizational changes and operating improvements are expected to drive continued revenue and earnings growth in Fiscal 2005.
White Paper - Internet Marketing Strategies For The Medical Device Industryjerryme5
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A Collaborative Product Commerce Approach To Value Based Health Plan PurchasingKate Campbell
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A Collaborative Product Commerce Approach To Value Based Health Plan Purchasing
The Pharma & ACO Relationship
1. A white paper on the relationship between the global
biopharmaceutical industry and Accountable Care
Organizations (ACOs)
THE PHARMA & ACO
RELATIONSHIP
3. 3
The Pharma & ACO Relationship
Introduction
Executive Summary:
The United States spends more on healthcare than many other industrialized nations while unable to compete with
average measures of quality. Thus, American citizens often spend more for lower quality of care than other citizens
around the world. There are several issues that factor into these deficiencies such as demographics, cultural differences,
and notably population size that are beyond the scope of this paper. Our focus is the Accountable Care Organizations
(ACOs) that were created out of the Patient Protection and Affordable Care Act (ACA) and introduced to improve access
to quality care while simultaneously reducing costs. The Center for Medicare and Medicaid Services (CMS) defines
ACOs as “groups of doctors, hospitals, and other healthcare providers, who come together voluntarily to give
coordinated high-quality care to their Medicare patients.” [1] To be successful, ACOs are employing several initiatives
that implement strategies to reduce the number of patients that return to the hospital after being discharged. Studies
have shown that hospital readmissions are extremely costly and often avoidable, suggesting that the way we treat
patients initially, track them once they leave the hospital, and treat them upon readmission remains one of the most
powerful points for innovation in the ACO and healthcare landscape today. Here, we discuss triumphs and
transgressions of the pilot initiatives, identify potential innovations to the system, and evaluate the evolving and ever-
important relationship with the biopharma sphere.
Where are we today?
The Affordable Care Act (ACA) was passed in 2010 to transform the United States healthcare system through coverage
expansion, access, quality, and cost improvements, and thus ensure healthcare providers maintain accountability. The
implementation of the ACA provided all with access to health benefits with emphasis on preventative care. Measures
designed to increase participation included subsidies for low-income families, a mandate for individuals to obtain
insurance or face a tax, and guarantees that pre-existing conditions would not prevent insurance access. Further,
Medicare and Medicaid were expanded to cover more low-income families and those with disabilities.
These goals, together, framed a bigger picture. The ACA was broadly designed to encourage access to quality care while
simultaneously reducing associated costs. ACOs were developed as a vehicle to meet these goals, in part to more
effectively network providers to more efficiently organize care. Initially interfacing solely with Medicare and Medicaid
patients, ACOs are tasked with meeting 33 quality measures ranging from mammography screening to risk-
standardized hospital readmission rates. ACOs are financially rewarded by meeting these quality standards and are
included in a Shared Savings Plan that further rewards hospital systems based on their ability to reduce the number of
tests and treatments compared to a CMS benchmark. The innovative ACO system is distinct in its model of risk
assumption that holds physicians more financially and clinically accountable for the expenditures and outcomes of their
patients. Further, transitioning healthcare from a volume-based reimbursement system to one that emphasizes value
forces the foundation of that system to be built on quality care and affordable costs. Thus, care is better coordinated and
duplicate or unnecessary treatments are reduced. The purpose of this is to advance the quality of healthcare across all
disciplines and to enhance patient-physician interaction.
Beginning in 2012, the Center for Medicare and Medicaid Services helped establish 32 Pioneer ACOs to validate the
feasibility and cost-effectiveness of the ACO system. Since then, the number of ACOs across the country has continued
to climb with providers within almost every state. The results have thus far been positive, however, establishing these
systems has been met with challenges. A major factor is the initial costs associated with the ACO framework, which
have not been insignificant, forcing hospitals to spend heavily on administrative and logistical start-up costs. While
these costs are unavoidable, it is difficult to get a complete picture of the functionality and efficiency of newer
participants in the ACO system.
4. 4
The Pharma & ACO Relationship
ACA initiatives and the ACO framework broadly affect the pharmaceutical and biotechnology industries. While still too
early to define long-term effects, the ACA increased the number of insured patients that can access and afford
prescriptions, which portends to be a boon for drug manufacturers. Further, the interaction between pharma and ACOs
tends to be even more complex with ACOs that demand lower costs while biopharma companies look to increase profits
to bring drugs to market. We see a potential partnership with pharma as an avenue to reduce overall costs, drive
innovation, and increase the quality of care within the healthcare realm. Here, we identify many of the successes and
obstacles that infantile ACOs have met head on. We aim to survey the current pharma landscape, pointing out areas of
potential synergy between the ACO system and the biopharma industry, specifically focusing on ways to increase
adherence and compliance through technological advancements and education initiatives for patients, as well as
providers.
5. 5
The Pharma & ACO Relationship
The pharma industry represents a major player in the healthcare industry in the United States as well as the American
economy as a whole. The pharma and biotech industries together represent the major drivers for new drug and medical
device development, as well as economic engines for innovation, job growth, and scientific advances. However, these
industries face multiple headwinds that include rising costs of drug development, an oft-unpopular public opinion,
patent expiration, and a drying research pipeline that has forced many biotech and pharma companies to shift their
business model to an acquisition-first strategy. Despite these challenges, we predict the pharma and biotech industries
will continue to thrive, and we envision them to build on their major roles in the healthcare space.
Revenue of the top fifteen pharma and biotech companies in the United States totaled just under $527 billion in sales in
2014. Sales for the same companies totaled $514.5 billion in 2013 resulting in just a 2.4% increase in sales year over year.
[2] The top-selling drug in the U.S., AbbVie’s Humira, sold over $2.6 billion in 2014 alone, exemplifying the continued
success of “blockbuster drugs,” despite several aforementioned headwinds. One challenge, for example, is the issue of
patent and intellectual property expiration. Pfizer’s patent on the blockbuster drug, Lipitor, expired in October of 2011.
Lipitor had previously been the number one selling drug in the U.S., but sales quickly plummeted from over $3B in Q3
2011 down to just over $500M in Q2 2012, [3] representing an approximate 80% drop in sales. Mitigating the inevitability
of patent expiration is a common problem across the pharma industry.
Another, albeit less empirical, headwind is the matter of public perception of the pharma and biotech industries. Often,
public mistrust based on allegations of profiteering and price fixing for pharmaceuticals that are necessary to fight lethal
and chronic diseases plague the industry. While headlines have focused on rising prices of therapies, the top fifteen
pharma companies saw an increase in profit of only 2.4% from 2013 to 2014. Further, drug pricing is a complicated issue
with influences from the manufacturer, the healthcare provider, the patient, the payer/insurance provider, and finally
government regulations. Thus, market prices for drugs need to be evaluated from all perspectives to determine how to
make drugs more affordable for patients while still stimulating growth, discovery, and innovation within the
pharmaceutical industry.
Another headwind that contributes more directly to rising drug costs is the rising cost of drug development and clinical
trials. With opportunity cost of time included, a recent estimate of the cost of development of a single successful drug
now sits at $2.6 billion, with roughly half being out-of-pocket expenses. [4] This estimate takes into consideration several
factors including the amount invested into research and development for failed drug candidates, increasingly large and
complex clinical trials, and a greater focus on targeting chronic and degenerative diseases, amongst other factors.
Pharma has met this challenge in several ways, including a reliance on big data and improved patient tracking systems
throughout clinical trials, as well as testing an outsourcing model for clinical trials [5].
Pharma Landscape
“The cost of development of a single
successful drug now sits at $2.6 billion with
roughly half being out-of-pocket expenses.”
6. 6
The Pharma & ACO Relationship
In an effort to mitigate many of these challenges, larger firms have experimented with an acquisition approach:
absorbing smaller pharma companies with an established pipeline or promising therapeutics, thereby reducing costs
associated with their own R&D. The trade-off is to invest more short-term capital into a technology, which may equate
to a greater chance of success because it is at a later stage in development. As previously noted, time is evaluated as an
opportunity cost and developing a therapy from an exploratory phase consumes more valuable time.
In this paper, we seek to identify areas of potential collaboration between the pharmaceutical industry and the
Accountable Care Organization infrastructure. With new innovation and policy in place within the ACO framework, we
believe there is room to make treatments more effective while raising accessibility to quality care within the healthcare
landscape. To this extent, reducing rehospitalizations after discharge is a primary goal for ACOs and can be
accomplished through mitigation of adverse reactions to drugs, focusing on patient adherence, and supporting an
educational foundation for both patient and family. These goals, in some capacity, should be shared by the
pharmaceutical industry to deliver more effective drugs and to encourage cost savings for the entire healthcare system.
Further, we will discuss possible actions that can be taken by pharma companies to increase the utility of and
accessibility to technological innovations.
7. 7
The Pharma & ACO Relationship
The primary goal of the Accountable Care Organization (ACO) systems is to better coordinate and organize care for
Medicare patients to cut down unnecessary treatments in an effort to improve quality and reduce costs. [1] Since their
inception in 2012, results of their effectiveness have been mixed. Reports from CMS and the Government Accountability
Office (GAO) report overall cost savings within the system despite only 49 participating ACOs being eligible for shared
savings payments by reducing total costs. [6,7,8] In contrast, Health Affairs found that focusing on meeting quality
standards failed to meaningfully reduce costs. [9] With the program in its infancy, however, it is reasonable to expect
mixed results and the continuation of data review is necessary.
While there are 33 quality measures that serve as benchmarks for providing and coordinating care, the ACA neglected
enrollment or cost-savings targets for the ACOs [11]. There are many possible explanations for a lack of enrollment
targets within the ACO framework, including the potential for setting unrealistic goals and suffering an ensuing PR
backlash. Moreover, the Pioneer ACO phase focused on testing the feasibility of an idea and served as a pilot phase,
thus, setting enrollment targets would have been burdensome and counter-productive. Without cost-saving or patient
enrollment targets, it is impossible to compare the development and expansion of ACOs to any predicted level to
ascertain comparative quantitative or qualitative feedback.
Nevertheless, since 2011, the total number of ACOs has steadily risen. By the 1st Quarter of 2015, 744 public and private
ACOs had been established; a substantial growth from the 32 Pioneer ACOs that were established in 2010. Total patient
enrollment in these ACOs during the same time frame was estimated at over 23 million patients, suggesting successful
enrollment and coverage strategies. [10] This figure, 23 million, represents roughly one-tenth of all those insured in the
United States, but closer to 45% of citizens enrolled in Medicare. In both instances, this data suggests considerable room
for enrollment improvement. Some sources have noticed a discriminate lack of ACO enrollment in rural areas.
Correspondingly, several cities, such as Los Angeles and Orlando, have a much higher proportion of access to ACOs
than other areas.
ACO Results
10%
Of All Insured
Persons
Of Medicare
Enrollment
45%23.5
MILLION
= =
Number of ACO Covered Lives until the 1st Quarter of 2015
8. 8
The Pharma & ACO Relationship
Regarding meeting the overall savings objectives, several outlets have documented contrasting pictures of financial
success. This fact can be attributed to flexibility in analysis and reporting of the ACO data. CMS and the GAO reports
focus on “shared savings” - a measure of an ACO’s ability to reduce costs associated with procedures. In turn, they
receive a percentage of the savings, and, if their quality benchmarks are met, they receive additional bonus payments.
Other sources, such as Kaiser Health News, focused more broadly and reported the bottom line outcome on how much
the ACO system cost Medicare. Through 2014, Medicare has yet to save money on the ACO framework. [12] In fact,
Medicare took a net loss of $3M in 2014 due to a miscalculation of patient costs on the ACO system, as well as paying
out $422M to hospitals as savings bonuses. It must be pointed out that Medicare paid out $60B for patient treatment, so
$3M over budget translates to 0.005% of the total financial cost of the ACO system. To put this in perspective, for a
household budget of $10,000, 0.005% would translate to spending an extra 50 cents.
CMS and other sources tout successes achieved by the ACO system, including a continual increase in patient enrollment,
continual increase in ACO numbers and size, and generation of over $400M in shared savings in 2014. Interestingly,
Pioneer ACOs showed dramatic improvement, increasing shared savings from $2.7M to $6.0M per ACO in just two
years. Pioneer ACOs invested heavily in infrastructure early, and the costs to build or improve the networks were lower
by 2014, suggesting infrastructure startup costs dramatically affect future savings figures. In general, determining the
financial success of the ACO system is complex, and gauging the financial success of the entire system will take more
time and necessitate the analysis of more data.
Of the 353 participating ACOs, 206 reported quality scores as new ACOs were not required to report. The average
quality score for all reporting ACOs was 0.866 (from 0.0 to 1.0) with a range from .641 to .954 suggesting a high rate of
adherence to quality measures. As a benchmark, Pioneer ACOs improved each of their three years from .718 to .852 and
finally finished at a higher rate than the average ACO at .872. Further, amongst those ACOs that reported in 2013 and
2014, they were able to improve in 27 of 33 quality measures. [12] Despite this success, when combined with shared
savings, only 97 ACOs (27%) qualified for shared savings bonus payments.
One key measure of performance is readmission rates. CMS defines a readmission as a patient seeking acute care within
thirty (30) days of a previous hospitalization. [13] In 2011, 3.3M adult patients sought acute care after discharge costing
hospitals an astounding $41.3B. [14] For Medicare patients, the three major causes of readmission were congestive heart
failure (134,500 readmissions), septicemia (92,900 readmissions), and pneumonia (88,800 readmissions), costing the
Medicare system $4.3B. [14] Reducing hospital readmissions portends to be an intriguing possibility to reduce financial
burdens on the healthcare system. In fact, reducing hospital readmission rates is an essential goal of the ACO
framework and one of the important end goals of the quality metrics introduced above. In reference to the ACO
framework, the preferred way to reduce readmission rates is to encourage preventative care and focus on overall health
that would reduce complications after surgery, reduce adverse drug reactions, or lessen the impact of chronic diseases.
These steps can take multiple forms and can be implemented by physicians, caretakers, and biopharma companies.
The Robert Wood Johnson Foundation created a map that highlights readmission rates by region across the United
“Medicare took a net loss of $3M in 2014 due
to a miscalculation of patient cost on the
ACO system as well as paying out $422M to
hospitals as savings bonuses.”
9. 9
The Pharma & ACO Relationship
States in 2010. [15] Readmission rates by region range from 11-18%. 2014 CMS data indicates the ACO readmission rate
averaged around 17.2%, meaning ACOs, on average, were in the highest tier from the 2010 Robert Wood Johnson
Foundation readmission rates map. ACO performance ranged significantly with many ACOs reporting readmission
rates over 20%. It is surprising to see the average readmission rate, which is a critical goal of the ACO apparatus, leaning
towards the higher end along with some staggeringly high outliers. Despite this trend, there have been major successes
as some hospitals have been able to slash their readmission rate significantly, with Dorland Health reducing their
readmissions by an impressive 26%. [16] As with financial data, it is difficult to make definitive conclusions on this data
or the effectiveness of quality measure implementation on reducing hospital readmissions.
10. 10
The Pharma & ACO Relationship
When the Affordable Care Act passed, the ramifications for the biopharma industry were both potentially favorable and
unfavorable. With a mandate for health coverage and a focus on preventative care, pharma companies have generally
benefitted by doling out more prescriptions to serve a greater number of insured Americans. However, this boost was
partially offset by increased taxes on biopharma companies as well as a preference for reimbursing generic medications.
More directly, the biopharma industry, up until now, has played a passive role in the Accountable Care Organization
framework. Despite no clearly defined role, biopharma companies play a pivotal role in reducing ACO costs via their
ability to supply the market with medications, medical devices, and innovative medical products. The biopharma
industry plays a crucial role in meeting quality standards by providing better, safer medications and increasing the focus
on education to help save lives and encourage the transition to value-based medicine. The National Pharmaceutical
Council has highlighted the importance of helping to meet quality standards and reiterated the focus on reducing
hospital readmissions: “pharmaceuticals have demonstrated a potential to significantly reduce costs through their role in
preventing hospitalizations. Efforts to focus on outpatient medical management and the prevention of hospitalizations
through medication could lead to lower costs and higher quality for ACOs.” [17]
The ACO framework has largely been met with conflicting reports of success or failures. To this end, we believe that the
biopharma industry could be a powerful engine of innovation and deploy novel infrastructure to help meet the
challenges that face the ACO framework. The major goal of this venture should focus on improving quality and access to
care in the ACOs through education and drug adherence initiatives. We believe that by taking a larger role, the rate of
hospital readmissions can be dramatically reduced, which, as stated before, can drastically reduce the amount of money
spent on care and procedures in the ACO framework.
ACO & Pharma Landscape
“Biopharma companies have pivotal
importance in reducing ACO costs via their
ability to supply the market with medications,
medical devices, and innovative medical
products.”
11. 11
The Pharma & ACO Relationship
The most important mechanism for reducing costs, while increasing access and quality, is reducing admissions and
especially readmissions. One study showed that a follow-up visit in congestive heart failure (CHF) patients within 7-10
days post-discharge could reduce readmission rates and help hospitals achieve readmission reduction incentives. [18]
Though specified for CHF, this recommendation can be further extrapolated to other emergent diseases. Follow-up visits
are exemplary of a healthcare system in which providers, patients, and all players collaborate more efficiently and are
better aligned to provide better quality treatments. This is the realization of a healthcare system built on preventative
care and focused on individual health, rather than one that only treats symptoms instead of aiming to prevent them. In
effect, better patient monitoring and more efficient patient education can be introduced to reduce noncompliance and
reduce adverse drug reactions that plague the healthcare system and increase the costs of care. We believe that the
biopharma industry can more effectively collaborate with healthcare providers, especially pharmacists, and can better
connect and educate patients and provide necessary tools to reduce adverse drug reactions and hospital readmissions.
Adverse Drug Reactions (ADRs)
The FDA Adverse Events reporting system reported a consistently growing number of adverse drug reactions (ADRs)
over the course of the last decade, with the highest instances occurring in 2014 (807K ADRs, 123K deaths). In the first
quarter of 2015 alone, there were 44,693 deaths and 253,017 serious cases reported, putting 2015 on track for over 175K
deaths and over 1M serious complications of drug administration, both record levels. [19] Over 1M serious adverse drug
reactions reported in 2015 would represent an increase of around 25% over the previous year. Furthermore, the FDA
noted that not all ADRs are reported, which suggests the actual number of ADRs in the U.S. may be as high as 2M per
year. [20] These statistics highlight a growing problem within the healthcare system, and these figures are especially
pertinent to the ACO’s goal of reducing costs associated with hospital readmissions.
In a UK study, roughly 40% of patients discharged from the hospital were readmitted within a year, with around 20% of
The Pharma/ACO Interface
FDA Adverse Events Reporting System Reporting by Patient Outcomes by Year
*Serious outcomes include death, hospitalization, life-threatening, disability, congenital anomaly and/or other serious outcome.
*Source: FDA Adverse Events Reporting System (FAERS)
12. 12
The Pharma & ACO Relationship
those patients readmitted because of an adverse event. [21] In older patients age 65 or older, an estimate of almost 100K
hospitalizations of patients each year are attributed to adverse drug reactions, with nearly half of those in patients 80 or
older. Interestingly, only 1.2% of hospitalizations were attributable to high-risk medications, suggesting that most
hospitalizations were due to problems with frequently used medications. [22] This suggests that, while adverse drug
reactions are fairly frequent and can be costly, better management of commonly used drugs can make a large impact on
hospital readmissions, particularly in elderly patients. This same conclusion was reached in a separate study
highlighting the fact that adverse drug events occur frequently and could be mitigated with simple to introduce
strategies. [23] While no data exist distinctly for hospital readmissions in the ACO framework due to adverse drug
reactions, the important point presented by outside data suggests that hospital readmissions due to adverse drug
reactions are ubiquitous in the healthcare system, and they are an important, addressable point in efforts to reduce costs
and increase quality in the ACO framework.
Of highest concern to readmission frequency are the underlying causes of ADRs in home care and nursing care. One
major issue tends to be patient education, which directly affects patient adherence and compliance. Adherence measures
a patient’s ability to fill or refill a prescription on time. Compliance, while similar, is defined by the act of taking a
medication on time, at the correct dosage, and for the entirety of the prescription. [24] A study from the Mayo Clinic
suggested that perhaps 50% of patients fail to adequately adhere to their medication and reiterated the fact that
“increasing the effectiveness of adherence interventions may have a far greater impact on the health of the population
than any improvement in specific medical treatments.” [25] Further, poor adherence and noncompliance to medication
are estimated to cost the healthcare system $100B per year, with some estimates up to $300B. [26,27] This is especially
relevant in patients over 65 where noncompliance rates tend to be higher for a variety of reasons including
polypharmacy, in which patients are treated with several medications at once. Since Medicare covers a great number of
U.S. citizens over 65, noncompliance issues are directly relatable to Medicare and especially the ACO framework.
There are many potential strategies that have been formulated and employed in hospitals to combat the rise of ADRs.
Many of these strategies focus on length of hospital stay. Several hospitals have deployed better patient surveillance
techniques that alert hospital staff of adverse reaction warning signs as well as infrastructure to better manage patient
health records to reduce medication error rates. [28] Drug adherence reinforcement programs were also able to reduce
costs in chronic vascular disease patients. [29]
These statistics speak directly to the biopharma industry. Biopharma companies submit to intensive regulatory
procedures to get drugs to market and are strictly monitored by governing regulatory bodies including the FDA.
Further, once treatments make it to the marketplace, biopharma companies have pharmacovigilance infrastructure to
identify issues in how a drug is received or tolerated by patients, as well as extensive monitoring through Phase IV
clinical trials. However, the industry must play a more proactive and extensive role in defining and enacting adherence
and compliance solutions. Improvements such as patient education, innovative new technologies, and a defined
presence in hospitals are important steps to reducing costs within the ACO framework, and they may help increase
quality outcomes in patients.
“Poor adherence and noncompliance to
medication is estimated to cost the
healthcare system $100B per year, with some
estimates up to $300B.”
13. 13
The Pharma & ACO Relationship
The biopharma industry has a responsibility to ensure that patients are educated on how to properly take their
medications and informed on the necessity of completing the course of a drug treatment. To reiterate, this directly
relates to drug adherence and the idea that increasing adherence can ultimately reduce overall costs. The healthcare
ecosystem is undoubtedly complex and includes the biopharmaceutical companies that manufacture products,
physicians that write prescriptions, pharmacists to fill these prescriptions, and finally, patients to take (or not take) the
medication. Often, the redundancy in the system is regarded as a bureaucratic obstacle, but we view it as an opportunity
to reinforce in patients the importance of medication adherence. This is especially relevant to the ACO framework, as the
purpose of the system is to better align providers to streamline infrastructure and to organize medical care more
efficiently. However, the fact remains that an estimated 90M American adults are unable to make sound medical choices
for themselves. [30] Thus, the importance of patient education can not be understated.
Despite the ACO framework being in its infancy, the ACO system is already plagued by some of the same problems
facing traditional healthcare systems. Patient leakage is defined as patients “leaking” from one hospital system to
another, often during referrals to a specialty provider. A study from Becker’s Hospital Review cites patient and
physician education as critical tenets of an efficient hospital system. [31] The critical message from this study is that
educating patients on the benefits of a coordinated care system and acknowledging the effects of a patient-based system
is effective in reducing patient leakage. The study also advocated educating physicians and encouraging them to
identify other providers in the ACO system to stop patient leakage as another successful intervention.
More broadly, patient education initiatives are focused on the patient’s medical literacy or their understanding of the
medication and treatment plan. Many suggested system improvements implement patient education initiatives,
including a proposed “Health Literate Care Model.” [32] The purpose of this model is to improve health outcomes by
relying on the patient’s ability to immerse themselves in their own health management, whether through prevention or
decision-making. Two important assumptions to make are that the patient knows little about their health condition and
that healthcare providers must consequently provide and ensure understanding of necessary information. The Journal of
the American Medical Association identified several important factors for encouraging patient education and literacy.
While they acknowledge that effective programs must be comprehensive and involve all parties, they focus on
counseling, self-monitoring, and costs of treatment, among other areas. [33] The overall thesis, which is corroborated
and proven successful elsewhere [34], is to establish a level of medical literacy in a patient for them to understand their
condition and convince the patient of the importance of completing their treatment while ensuring access to necessary
medication. Also, providers must be accessible to patients to answer questions and address concerns that may arise. An
exhaustive review highlights many potential barriers to medication adherence and the clinical strategies that could be
employed to address poor adherence. [35] These include barriers to the patient to properly “know what to do or why”
with remedies that include providing simpler instructions and having patients watch short videos on their medication.
Solutions
“Estimated 90M American adults, more than
half adults, are unable to make sound
medical choices for themselves.”
14. 14
The Pharma & ACO Relationship
Other suggestions point to shifting patient education liability in part to pharmacists, or at the very least, a renewed focus
on team-based care and prescription delivery systems. [36] In this role, pharmacists assume a larger role along the
continuum of care from the hospital to the pharmacy to educate patients on risks and potential drug interactions as well
as being available for consultations to their patients. Despite their expertise in medication management, encyclopedic
knowledge of potential drug interactions, and ability to provide comprehensive drug counseling, the majority of existing
ACOs have failed to meaningfully engage pharmacists to the potential detriment of patients and cost-savings initiatives
of the framework. [36] There are several challenges to integrating pharmacists, such as a general lack of a reimbursement
strategy for involved pharmacists, but undoubtedly, medication management and drug education need to become a
priority to increase health literacy and better manage patients’ drug treatments.
While much of the discussion is currently on increasing the presence of pharmacists within teams in the ACO
framework, we believe that biopharma drug manufacturers, those that have extensively researched, tested, and
developed therapeutics, must be more involved in the prescription and adherence monitoring phases of drug
administration. The major goal of a biopharma presence within the ACO framework would be an informational source
for both patients and providers regarding therapeutics while striving to educate patients about their treatment and
disease indications. Several pharma companies have already deployed a call center strategy to employ providers that are
available over the phone to answer questions about certain drugs. However, this strategy is typically employed only for
higher profile drugs, such as Humira, and only available during restrictive business hours. Additionally, some
biopharma companies have begun to transition to a team-based presence in hospitals that incorporate pharma
representatives, as well as Medical Science Liaisons that engage “key opinion leaders” (physicians/providers) to
provide them with scientific consultation and ensure the drug is being utilized properly. Since 2005, according to the
Medical Science Liaison Society (MSLS), the top 10 biopharma companies have increased the number of MSLs by over
76%. [37] While this is not necessarily a new idea, we believe that MSLs should play a larger role in the framework to
offer more consultative services to providers and patients.
This model would also modify the current framework where biopharma representatives, or ‘drug reps’, only interface
with physicians or other professional healthcare providers. Clinical-based pharmaceutical representatives would
transition to perform post-prescription consultations, limiting conflict of interest, and interface directly with patients.
Also, the pharmaceutical representative would focus on educating providers on clinical trial data, potential adverse
reactions, and possible drug interactions in a similar role to Medical Science Liaisons. We envision the creation of MSL/
pharmaceutical representative teams that would aim to educate providers and patients. This role would be located
primarily in hospitals and clinics where they could serve to counsel in- and out-patients. This model would be beneficial
for all parties: drug adherence principles are reinforced by pharma companies ensuring safety and raising adherence
levels, providers’ knowledge and expertise are reinforced, and pharma companies will benefit from patients that
actually take their medication and refill their prescriptions. Hospitals also stand to benefit as in- and out-patients are
encouraged to fill prescriptions in hospital pharmacies after obtaining counsel from an in-house representative/MSL
team. Instead of pharmaceutical representatives functioning solely to sell or convince a provider to prescribe a
medication, the role of the rep transforms to educate and encourage a patient to adhere to the medication schedule as
prescribed by a provider.
“We envision the creation of MSL/
pharmaceutical representative teams that
would serve to educate providers and
patients with representatives focusing on
educating patients.”
15. 15
The Pharma & ACO Relationship
In a transformed model, biopharma companies would invest in infrastructure wherein professionals are available for
extended hours to serve as a resource for both patients and medical providers. Extended hours are an important feature,
as patients will often turn to online counseling where they get general, non-personalized information and are still
required to make medical decisions for themselves. WebMD clears, on average, 4 billion page views per quarter,
suggesting that patients are seeking medical advice and making medical decisions on their own far too often. [38] The
biopharma industry could take on a larger role in this ecosystem to employ more providers that would give 24/7
consultative advice on how to properly take medications and warn patients about potential drug interactions. An oft-
argued barrier to this system is costs associated with employing knowledgeable professionals to support these
consultation initiatives. Recently, the American Medical Association has advocated that pharmaceutical companies end
direct-to-consumer advertising on television and other media. By one estimation, $4.5B was spent on direct-to-consumer
marketing. [39] By cutting back on marketing, this capital can be invested in post-clinical drug counseling both in person
and over the phone or internet.
There are many other barriers to patient education such as customs, language barriers, distrust of the medical system,
drug costs, payer issues, and so forth. While we expect that more intervention by the biopharma industry within the
ACO framework would help increase patient education, there is likely much more that could be done separately. As
such, we envision separate patient education initiatives that focus on groups of minority patients, patients with certain
ailments, or other initiatives that reduce costs for necessary medicines. Interestingly, roughly 84.6% of ACO patients
have been white, with African-American/black patients making up only 9.0% of patients. [ACO data] Further, many
biopharma companies have deployed initiatives which provide access to costly prescriptions at little to no charge. The
ACO system needs creative solutions, such as the suggested reformation of consulting services to patients that will
increase medication adherence to lower costs and increase access and quality.
16. 16
The Pharma & ACO Relationship
Telemedicine can revolutionize the ACO framework and reduce the number of hospital readmissions by patient
monitoring outside of the hospital environment. The idea is simple: medical staff monitors patients who traditionally
would be unable to access care at home through wearable medical devices such as heart monitors, blood pressure
monitors, and potentially other diagnostic equipment. The market for wearable medical devices ranges from brain
scanning EEG headsets to heart rate and sweat-sensing wristbands, and everything in between. This new technology has
demonstrated the power to track medical information in real-time and has already shown promise in the healthcare
realm. Several reports have indicated successes, but also shortcomings, of developing and deploying new technologies,
both at home and in a managed care setting. We believe that the biopharma industry has two responsibilities: to
continue to innovate and develop novel, easy-to-use wearable medical devices and to ensure that these technologies are
available and utilized within the ACO framework.
The general idea behind wearable technology is to give a patient a monitoring device relevant to their disease indication.
This information can either be databased and saved for a future doctor visit or, if necessary, can be streamed in real-time
to a remote medical center staffed by qualified healthcare providers. In addition to offering real-time health monitoring,
trackers also monitor physical activity, provide reminders for medication adherence, and can offer immediate access to
information regarding drug safety. Interestingly, scientists at the University of California-Berkeley have developed
fitness-band based sweat sensors that monitor body chemistry that could be deployed to monitor for disease symptoms.
[40] Simple fitness bands can also monitor heart rate or fitness activity and data can be applied to a clinical setting. For
these reasons, and their ability to offer constant monitoring, we believe that wearables and telemedicine have the ability
to fundamentally change the way that outpatients are treated. It is reasonable to assume that these changes will lead to
reduced readmission rates, improving the ACO framework while also increasing the quality of care.
Many companies and hospitals have begun utilizing both at home and remote monitoring, including Philips, Stanford
Medicine, and St. Jude Medical. [41,42,43] One study has shown that poor exercise adherence of heart failure patients
increases susceptibility to hospital readmission while increasing the risk of poor outcomes. [44] As a possible remedy,
HackensackAlliance ACO found that a tablet program for chronic diseases helped reduce readmission rates from 28%
down to 8%. [45] The ACO provided tablets to patients returning home to plan meals, measure blood sugar, and track
their weight. If the patients failed to update their schedule, they would receive a call or message from a caretaker in a
remote monitoring center. Remote monitoring can serve as an excellent motivator and encourage patients to stay on
track with their activity and nutritional goals. These plans encourage adherence and have foundations built to ensure
that patients are responsible for their medication and health adherence. While this study and others have shown the
success of wearables and remote monitoring, some studies have shown the apparent steep learning curve to
incorporating tech into the healthcare system. One system in Ohio found that medical residents gave low marks to iPad
incorporation in daily rounds, and a hospital system in California found that remote telemonitoring did not reduce
readmission rates. [46,47]
Telemedicine
“Wearables and telemedicine has the ability
to fundamentally change the way that
outpatients are treated.”
17. 17
The Pharma & ACO Relationship
With some positives and negatives of the integration of wearable tech and telemedicine, improving this system should
be a fundamental goal of the biopharma system. The biopharma industry can continue to innovate and develop novel
technologies and collaborate with technology companies to develop efficient wearable technologies. Since
telemonitoring is typically focused on health and drug adherence, biopharma companies have a responsibility to
provide the best information to patients, which can take the form of web applications or software tailored to a particular
medication. As such, biopharma companies stand to profit in this new, growing market for wearable technology. As we
recommended with education, we believe that biopharma companies should place emphasis on developing new
technologies and initiatives that will encourage widespread use of remote monitoring technologies and healthcare
wearables. We believe that these principles have shown promise in reducing hospital readmissions that can raise the
quality of care, reduce costs, and increase access in the ACO framework.
18. 18
The Pharma & ACO Relationship
Technology has become ubiquitous in American society, and it has proliferated in the healthcare ecosystem. Americans
of all ages have unparalleled access to smartphones and tablets that offer computing power anywhere, wearable
technology that can provide instant and constant health monitoring, and the ingenuity to solve problems such as
healthcare costs and, in particular, high readmission rates that continue to burden the healthcare ecosystem. At the core,
this requires solutions that focus on the patient and the desire to create better healthcare outcomes for all. With the
introduction of the Patient Protection and Affordable Care Act, we have witnessed the beginning of this transition.
Accountable Care Organizations have further aimed to solve this goal and others. Their formation represents a
healthcare system that seeks to increase access and quality while simultaneously reducing costs. For ACOs to become
successful, patients must take a larger role in their own healthcare, medication management, and monitoring. Here, we
have discussed the role that the biopharma ecosystem plays and actions that companies may take to reduce patient
burdens by offering consultation, increasing education, and innovating in the realm of healthcare telemonitoring
technologies. Momentum to more efficiently and widely integrate telemonitoring technologies, wearables, and other
technologies is building, as many ACOs have tested these types of technologies, and, more importantly, patients are
beginning to incorporate these technologies on their own. By transitioning and building on their current roles,
biopharma companies have the ability to affect real change in the healthcare system, especially in the ACO framework
that aims to reduce costs while increasing access to quality care.
Conclusions
21. 21
The Pharma & ACO Relationship
Key Contacts
Mr. Joseph Gaspero
Chief Executive Officer & Co-Founder
Center for Healthcare Innovation
Dr. James Gillespie, PhD, JD, MPA
President
Center for Healthcare Innovation
222 S. Riverside Plaza (1900)
Chicago, IL 60606
www.chisite.org
james@chisite.org
Mr. Joseph Gaspero
Chief Executive Officer & Co-Founder
Center for Healthcare Innovation
222 S. Riverside Plaza (1900)
Chicago, IL 60606
P: +1.312.906.6153
www.chisite.org
joseph@chisite.org
About the Center for Healthcare Innovation:
The Center for Healthcare Innovation is an independent, 501(c)(3) research and educational institute
that helps patients and providers increase their knowledge and understanding of the opportunities and
challenges of maximizing healthcare value to improve health and quality of life. We aim to make the
world a healthier place. CHI encourages and enables meaningful and executable innovation that aims
to address existing and ensuing healthcare dynamics through communication, education, training,
symposia, reports, and research. By bringing the best and brightest healthcare leaders from all over
the world together to share their ideas and expertise, CHI creates a unique opportunity to address and
improve healthcare value, which we view as a function of quality, access, and cost. For more
information, please visit www.chisite.org.
Mr. Ryan Haake, MS
Research Associate
Center for Healthcare Innovation
Authors:
Key Contacts:
Ms. Ivory Chang
Senior Analyst
Center for Healthcare Innovation