Projected slow sales growth for big pharmaceutical companies is an opportunity for health insurance plans to save money. The compound annual growth rate for big pharma companies from 2010 to 2016 will be 0.7 percent thanks to “generic erosion,” says Datamonitor, a business information and analysis company.

For pharmacy directors at health insurance plans, that means “more opportunity to control costs as a number of broad disease areas become genericized” with Lipitor (atorvastatin) being the most obvious example, says Simon King, principal analyst at Datamonitor.

A datamonitor study, “Big Pharma Company Outlook to 2016,” says that “a historic propensity for blockbuster-driven growth, which helped to drive sales at a compound annual rate of 7.6 percent over 2004–2010, will continue to unravel in the short to medium term as these multibillion dollar brands continue to attract the attention of an aggressive generics industry.”

King says that “the effect of the so-called patent cliff is clear through to 2014 when growth rates pick up marginally again before a slew of high-profile expiries hit in 2015 and 2016.” He cites Gleevec (imatinib) and Crestor (rosuvastatin).

“The major caveat here when assessing growth is that the forecast period does not obviously predict merger and acquisition activity, which acted as a key driver of growth from 2004 to 2009. The discrepancy in growth rates over 2004 to 2010 and 2010 to 2016 suggests that mergers and acquisitions are likely to continue despite what leading players suggest.”

Prescription pharmacy sales and year-to-year growth

Source: “Big Pharma Company Outlook to 2016,” Datamonitor, 2011

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.