Adding a PhD to a PharmD degree has a “poor rate of return on investment,” says Nicholas E. Hagemeier, lead author of a new study in the American Journal of Pharmaceutical Education. Hagemeier holds a PharmD, and is also a PhD candidate in the College of Pharmacy at Purdue.

The average starting salary of a new college graduate who holds a PharmD is more than $100,000 in the private sector. “Trying to persuade someone to turn down that salary, and instead pursue a PhD that will take, on average, about five years, and knowing that you will be paid a significantly lower salary when you’re done with school, makes the prospect of additional schooling less appealing,” Hagemeier says.

Those who pursued their PhD in a pharmacy-related field and found employment in academia or industry often report starting salaries that are $20,000 less than those of newly licensed community pharmacists. The researchers used net present value (NPV) and internal rate of return (IRR) to measure capital investment — in this case, graduate school. NPV was defined as the current value of future wage differences between a practicing community pharmacist and a PhD graduate in careers that are pursued upon graduation. The IRR is the rate at which cash flow (both positive and negative) from a particular investment equals zero. “Ideally, one would like the NPV to be positive and the IRR to be positive and greater than the next best alternative, such as the return on a 30-year U.S. Treasury bond. An IRR of only 1 or 2 percent would be considered pretty poor given current bond rates and stock market returns,” says Hagemeier.

Yet Hagemeier says that “a PharmD/PhD is a great combination. That clinical knowledge and training in research methodology is an attractive combination. Those people are hard to come by.”

Is that PhD degree worth it?

The figure plots the internal rate of return for PhD careers compared to practicing community pharmacists, 1982–2008.

Source: Hagemeier NE, Murawski MM. Economic analysis of earning a PhD degree after completion of a PharmD degree. Am J Pharma Ed. 2011;75(1): 1–10. Permission to reprint graphic granted by publisher.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.