NOTE: This repost was courtesy of mscripts and written by Julie Van Inwegen, the company’s Executive Director, Digital Health Solutions. I believe that this well cited post provides a nice history of medication adherence, and why its importance affects all of the stakeholders within the healthcare system from patients and doctors; to insurers, hospitals, pharmaceutical companies and pharmacy retail.
The U.S. healthcare industry is undergoing unprecedented changes. Medicare reforms, the Affordable Care Act, greater consumer choice, public and private exchanges, and new technology are all upending operating business models. As mscripts begins offering sponsored medication adherence and patient engagement services, it is critical that we understand these shifts and their impact on our services. A quick look back over the past 20 years—from the rise and fall of the blockbuster drug to today’s focus on patient outcomes—will hopefully provide a clear perspective on the many forces that have shaped the medication adherence industry into what it is today.
MID 1990’s—Early 2000’s: THE ERA OF THE BLOCKBUSTER DRUG, HIPAA ENACTED
The majority of pharmaceutical (pharma) manufacturers’ revenues are driven by a handful of blockbuster drugs. With the remarkable growth in these products and seemingly never-ending supply of new patients, brand managers have limited focus on keeping patients on therapy.
In 1996, The Health Insurance Portability and Accountability Act (HIPAA) was implemented to protect health insurance coverage for workers and their families when they change or lose their jobs, establish national standards for electronic health care transactions, and regulate (through the Privacy Rule) the use and disclosure of Protected Health Information (PHI) held by “covered entities”.
MID TO LATE 2000’s: RISE OF THE GENERIC AND GOVERNMENT REFORM
By the mid 2000’s more generics are dispensed than branded medication. Pharma can no longer count on patient starts outpacing patient losses and focus turns to keeping patients on therapy. Subsequently, companies that provide adherence services proliferate and prosper. In general, medication adherence programs are opt-out, paper-based, large scale, and broadly focused. Smaller scale, opt-in, “relationship marketing” programs that capture HIPAA authorizations also grow in popularity as they enable pharmaceutical marketers to engage directly with patients. However, patient opt-in rates are typically low despite ubiquitous opportunities to opt-in via television and magazine ads, brochures, etc.
With the launch of Medicare Part D in 2005 and the recession starting in late 2007, payers begin shifting costs to patients leading to increased co-payments and, subsequently, further declines in brand sales. Amidst this backdrop, technology and mobile phone usage is rapidly growing and penetrating the healthcare market.
2007-2011: THE PATENT CLIFF AND THE SHIFT FROM FEE-FOR-SERVICE TO OUTCOMES
With the loss of Lipitor, Plavix, Seroquel, Singular, and other blockbuster brands, and the continued collapse of research and innovation, pharma increasingly focuses on improving brand adherence and preventing generic erosion through aggressive co-pay relief tactics (like Lipitor’s pay no more than $4 offer). However, lower overall revenues mean adherence programs shift from a broad, one-size-fits-all approach to targeted and efficient programs powered by sophisticated data algorithms. As adherence programs remain largely opt-out and paper-based, opt-in relationship marketing programs increasingly engage with patients through email, text, and web.
The introduction in 2007 of the CMS Medicare Part D Five-Star Quality Rating System, begins the shift in the industry from traditional fee-for-service to quality and outcomes. Further, the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 legislates improved health care quality, safety, and efficiency through the promotion of health IT.
By 2012, 91% of the U.S. market owns a mobile phone; and technology further penetrates the healthcare market with ~44 million downloads of mobile health care apps in 2012—a figure projected to rise to 142 million by 2016.
2012-TO PRESENT: OUTCOMES, STRANGE BEDFELLOWS, AND THE CONSUMERIZATION of HEALTHCARE
The end of the blockbuster drug, the aforementioned legislative reforms, along with the Affordable Care Act, mean that all stakeholders in the US healthcare industry must adapt their business models to thrive—and in fact that is what we are seeing. Companies like Merck are focusing less on development and manufacturing and more on delivering comprehensive disease management services . Likewise payers and pharmacies have begun delivering population health management services such as medication compliance support, comprehensive medication reviews and reconciliation, nutrition and weight management information, and disease education. , In order to deliver these services and ultimately contain costs and drive outcomes, physicians, payers, pharmacies, and even manufacturers are partnering—something unheard of in years past! Further, as patients carry more of their healthcare costs and have greater payer choice, industry stakeholders must not only re-orient around health services, but also deliver a positive patient experience (If not, they might read about it on a patient’s Twitter feed!).
Given the above changes, along with the 2013 modifications to the HIPAA HITECH act, many medication adherence vendors have found themselves on the outside looking in on these industry shifts and are scrambling to provide mobile solutions.
An industry focused on outcomes-based health services, the consumerization of healthcare, the relevance and immediacy of the smart phone, a vacuum in digital adherence services: all of these shifts in healthcare align to perfectly position mscripts to deliver incredible value to our pharmacy partners and sponsors. And this value is our ability to:
1. Deliver immediate, relevant, timely, targeted medication education, refill and dosage reminders, co-pay assistance, and more, to millions of patients via their trusted, ever-present mobile device.
2. Broadly capture patient HIPAA authorizations in order to deliver personalized healthcare information.
mscripts’ mobile platform, with its combination of medication adherence and patient engagement services, is poised to supply the healthcare industry with powerful resources for delivering outcome-based health management services that will alter the medication landscape today and into the future.
About the author
Julie Van Inwegen has nearly 20 years of experience in the marketing and pharmaceutical industries. At mscripts, Julie is the Executive Director of Digital Patient Solutions where she creates and supports digital programs for leading pharmaceutical manufacturers who want to reach patients through retail pharmacies.. Before joining mscripts, Julie worked at Adheris, Pfizer, and other software companies in business development and marketing. Julie received her MBA from the New York University Stern School of Business. She is also a registered dietitian having received a Bachelor’s degree in Nutrition from Penn State University and completing a dietetic internship at the West Los Angeles VA Medical Center.