Project Report on Pharmaceutical and Healthcare Marketing
Dissertation on Cost Effective Healthcare Solutions
Global perspective: pharmacoeconomics in healthcare policy
Research Papers on Pharmaceutical and Healthcare marketing
- Pharmaceutical companies should be interested in the increasingly formalized and explicit use of pharmacoeconomic analyses. Pharmacoeconomics influences the way in which pharmaceutical companies approach research and development, pricing and reimbursement decisions and negotiations, and alters the competitive positioning of products and their promotional and sales strategies.
- Unlike most European countries, there is no comprehensive healthcare reimbursement system in the US and the government does not influence pharmaceutical pricing.
- Neither private nor public healthcare payers use pharmacoeconomic measures in pricing decisions. As a result, pharmaceutical companies are not required to submit such data at any point during the approval and marketing process, and the production and reporting of economic data on drugs is entirely voluntary. However, some healthcare providers use pharmacoeconomic data to assist decisions on the inclusion of a drug into a reimbursement formulary.
- The use of pharmacoeconomics in Japan is much less than in other major pharmaceutical markets and therefore its commercial impact on pharmaceutical companies is weak. However, it is likely that pharmacoeconomics in Japan will develop further, as the awareness of drug and treatment costs by Japanese healthcare payers and physicians increases.
- Since both hospitals and physicians control their own budgets, there is a lack of perceived relevance of pharmacoeconomic studies in the German setting. Therefore,pharmacoeconomics does not play a significant role in Germany and is not currently used in pricing or reimbursement decisions.
- It is highly unlikely that cost-effectiveness will ever be used to refuse the reimbursement of a drug to treat fatal diseases in Germany. However, unfavorable cost-effectiveness could negatively impact a drug’s sales since hospitals and physicians may themselves be made financially liable for exceeding their budget.
- Until recently, pharmacoeconomics played no role in pricing and reimbursement decision processes in France. However, the introduction of a new advisory committee in 1998 and a commitment to the economic evaluation of the effectiveness of new medicines will have commercial implications for both pricing and reimbursement.
- Although the new French system is by no means as formalized as those in Canada, Australia or the UK, companies with cost-ineffective products will have to accept non-reimbursement in the French market, or will have to alter their pricing strategies to generate more favorable cost-effectiveness ratios.
- Pharmaceutical industry executives do not generally believe that pharmacoeconomic guidelines in the pricing and reimbursement decision-making process are all negative, but the magnitude of the advantages and disadvantages depend on the scale of the guidelines implemented in individual countries.
- Both mandatory regulations and voluntary pharmacoeconomic guidelines can force a company to evaluate the economic efficiency of its products, enabling it to devise corporate strategies to maximize its competitive advantage.
- Pharmacoeconomic guidelines demand a consistent approach to the application of pharmacoeconomic studies and therefore ensure a level playing field amongst market participants.
- The imposition of a fourth hurdle in the registration process introduces more delays and additional costs into the registration procedure and has a significant impact on patient welfare through the postponement of the introduction of new therapies.
- Owing to the complex variety of regulatory requirements for different countries, a pharmaceutical company must invest significant amounts of capital to ensure that it conforms to all country specific pharmacoeconomic requirements. This entails a substantial investment in information technology and means that a company must develop appropriate strategies for the different drug reimbursement approval processes in different countries.
- The use of pharmacoeconomic guidelines provides a framework to demonstrate the efficiency of a product, such that misleading claims concerning the product are minimized. Companies with products which are not of demonstrable value have limited commercial opportunities in such a regulatory structure.
- In most countries, the manpower and systems to implement pharmacoeconomic guidelines are not in place and these logistical concerns may be difficult to overcome.
- Formal requirements for pharmacoeconomics in pricing and reimbursement offer manufacturers an opportunity to clarify their internal decision-making processes and to improve customer and corporate focus.
- The pharmaceutical industry is concerned that guidelines on the methodology of pharmacoeconomic studies are relatively inflexible and do not account for the fact that the economic evaluation of drugs is a rapidly evolving science. This lack of flexibility of pharmacoeconomic guidelines may not allow pharmaceutical companies to highlight the actual advantages of drugs adequately.
- It is expected that in three to five years, pharmacoeconomics will have at least a moderate commercial impact on pharmaceutical manufacturers through the pricing and reimbursement mechanism and, in France, the UK, Australia and Canada, the commercial impact will be generally strong. This will be especially so for high cost innovative drugs.
- As a consequence of a greater emphasis on pharmacoeconomic data in the reimbursement and pricing process, manufacturers will have to increase their level of expertise within ranks and from outside their organizations. Increasing levels of expertise should offer positive corporate implications by clarifying the internal decision-making process for pricing, reimbursement and overall business strategies,and improving customer and corporate focus.
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