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Why pharma should focus on adherence: $188B in lost revenue

2:52 pm by | 5 Comments

Patients not taking their medications is costing pharmaceutical companies dearly.

A new report has found that the U.S. revenue loss from medication nonadherence is a whopping $188 billion. The loss is all the more eye popping if extrapolated to the global market: $564 billion.

And that is simply the loss as it relates to medications for chronic conditions including diabetes, hypertension and high cholesterol, according to Capgemini Consulting and HealthPrize Technologies,  a company that makes a patient adherence software platform. Capgemini Consulting and HealthPrize jointly conducted the study.

They found that the U.S. revenue loss just from medication nonadherence in diabetes alone is $11.4 billion.

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“The revenue that pharma leaves on the table due to lack of adherence to prescription medications is much higher than usually thought,” explained Thomas Forissier, principal at Capgemini Consulting, in a news release. “In addition, many people don’t realize that a 10 percent boost in adherence could increase revenue by much more than 10 percent. That 10 percent loss is based on the higher revenue amount that could have materialized, not on actual revenue earned.”

The number that is bandied about to account for revenue loss from nonadherence is $30 billion emerging from a Datamonitor report from 2004, the new report said.

Historically, pharmaceutical companies have not “fully embraced patient adherence programs” according to a Frost and Sullivan white paper called “The Evolution of Patient Adherence Programs: Moving from Mass Market Relationships to a Personal Approach”

Now the much larger loss of revenue, gleaned from an analysis of modern claims-based adherence literature and data by Capgemini and HealthPrize Technologies, should change some attitudes.

“For insurers, employers and patients, nonadherence significantly increases healthcare costs as a result of disease-related complications. For pharmaceutical companies, pharmacies and pharmacy benefits managers, nonadherence significantly erodes profit due to prescriptions never filled and medications not taken often enough.  Given the significant potential to enhance revenue and lower cost to the overall healthcare system, programs to address medication adherence should be a top priority to the pharmaceutical industry,” said Katrina Firlik, co-founder and chief medical officer of HealthPrize Technologies, in a news release.

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Arundhati Parmar

By Arundhati Parmar

Arundhati Parmar is the Medical Devices Reporter at MedCity News. She has covered medical technology since 2008 and specialized in business journalism since 2001. Parmar has three degrees from three continents - a Bachelor of Arts in English from Jadavpur University, Kolkata, India; a Masters in English Literature from the University of Sydney, Australia and a Masters in Journalism from Northwestern University in Chicago. She has sworn never to enter a classroom again.
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5 comments
MedicalQuack
MedicalQuack

These articles and numbers simply amaze me on the emotions they stir and they may not be correct.  Granted getting people to take their medications requires education and first line is the doctor.  I have heard HMOs lean on MDs as to why are patients not taking their meds too, and a lot of the time it's not true as they fill a generic prescription and it's not tracked via the medical plan.  So again be aware of what these reports do and don't get so sucked in.  Again, we need to address this and education is the key.  I have reported on 4 years of all types of schemes to include contests on "taking pills" to lotteries...education still works best as you can't make a game out of it. 

 

On top of that you have people scamming analytics like FICO that they bogusly sell that claims to predict who will not take their meds.  They use a credit report and other information from the web, so now we have flawed data when you combine credible with non credible.  FTC needs to go after FICO for selling fraud with mis matched data here.  Guess what, they sell this fiction to pharma...so go figure. 

 

http://ducknetweb.blogspot.com/2011/06/fico-analytics-press-release-marketing.html

 

Again I am totally amazed at how everyone suckers in with these reports and numbers and feels they have to run and control something or somebody.  Watch this video and see how suckered in you are from NYU professor Siefe, it's all about context.  He also wrote a great book called "Proofiness, the Dark Arts of Mathematical Deception" so between the 2 see how you get suckered and how the use of non linear data as such contains some fiction and numbers that do not work.  This is just sad that reports like this continue and granted medication compliance is a focus that is needed but studies like this are crap for the most part and see how it makes you look at your fellow man.  They don't do anything for ethics at all either. 

 

http://ducknetweb.blogspot.com/2012/01/context-is-everythingmore-about-dark.html

 

If you want to dig in further, great video here on companies discussing big data and hats off to the women from T-Mobile that said what they were analyzing  was "silly"...get in to a little math before you jump all over reports like this as they may not be accurate and it messes with your head.

 

http://ducknetweb.blogspot.com/2012/11/big-dataanalytics-if-used-out-of.html

HealthPrize
HealthPrize

We need to think about non-adherence in new ways. It's not a simple problem of cost or forgetfulness. It's a value issue. It's a motivational issue. It's difficult to stick with a pill today if the benefits are years away. It's human nature. We need find creative ways to add short-term value, or rewards, to the act of taking a pill for a chronic condition.

medcitynews
medcitynews

@dougweinbrenner Oh yeah, that too! Kidding, of course. Money shouldn't be the most important motivator, but ..

Stephen Miller
Stephen Miller

The one-size-fits-all approach to adherence has been shown to not be effective.  Developing solutions specific to the issues for a condition may prove to be more effective.  It is amazing that with anti-platelet therapy, 49% of the potential revenue is lost to non-adherence,  It has been shown that a simple issue of difficult-to-control, minor bleeding (aka, nusiance bleeding) caused 11% of patients to stop taking Plavix.  That is not severe hemorrhage, but a small cut that won't stop bleeding that led to a revenue loss of several hundreds of millions of dollars.

CareRxPharmD
CareRxPharmD

Another set of tools to use right now are clinical pharmacists! When a patient is non-adherent or noncompliant to exercise, medications or wellness, it costs all of us. On an individual level, yes, patients and caregivers needs to take an active role in their health and medication management role by doing simple things before leaving their doctor’s office and after leaving their pharmacists from the pharmacy - We also needs to access barriers to adherence or compliance as well in order to affect change or behavior. Clinical pharmacists are the most trusted, resourceful and underutilized healthcare providers.  http://www.carenovatemag.com/page/2/