Going down-express elevator !
Jul/16/2008 06:18
Preliminary data
suggest the number of prescriptions actually fell in
the second quarter. The last time that happened, says
Lehman Brothers drug-industry analyst C. Anthony
Butler, may have been 1994, when the market was
buffeted by the emergence of managed care and the
threat of the Clinton administration's plan to
overhaul the health-care system.
The hit is coming at the expense of some of the industry's biggest brands. In May, branded medicines accounted for 30.6% of treatments dispensed, down from 45.9% in 2003, according to IMS. Pills for such chronic conditions as cardiovascular disease are vulnerable, since patients tend to think they can do without treatments for so-called silent diseases more easily than for conditions such as cancer or HIV.
The slowdown is happening as economic pressures have snowballed in the first half of the year, from record-high gasoline prices to mortgage defaults. Skyrocketing out-of-pocket drug costs and an increasing number of uninsured Americans are making this downturn especially challenging for the health-care sector, says Kevin Schulman, a specialist in health economics at Duke University.
"The last couple months have gotten worse, and that's going to continue," says Dr. Schulman. "The health-care industry thinks it's immune from these macro forces but at some point it can't be."
The development also comes as employers and insurers have shifted a larger share of health-care costs to consumers in a bid to tame growth of the $2 trillion health-care system. Pharmaceuticals may be an early look at how consumers react, especially when the broader economy turns sour.
"We don't have a real track record for understanding how the health-care system will respond to this new economic model where people are exposed significantly to the cost of care," says Jeff Goldsmith, president of consultant Health Futures Inc.
The burden on consumers has increased sharply. The average copay for a preferred drug on an insurance company's tiered system rose 67% to $25 in 2007 from $15 in 2000, according to the Kaiser Family Foundation. Out-of-pocket costs to cover family insurance premiums were $3,281 per employee last year, up nearly 84% from 2001.
The hit is coming at the expense of some of the industry's biggest brands. In May, branded medicines accounted for 30.6% of treatments dispensed, down from 45.9% in 2003, according to IMS. Pills for such chronic conditions as cardiovascular disease are vulnerable, since patients tend to think they can do without treatments for so-called silent diseases more easily than for conditions such as cancer or HIV.
The slowdown is happening as economic pressures have snowballed in the first half of the year, from record-high gasoline prices to mortgage defaults. Skyrocketing out-of-pocket drug costs and an increasing number of uninsured Americans are making this downturn especially challenging for the health-care sector, says Kevin Schulman, a specialist in health economics at Duke University.
"The last couple months have gotten worse, and that's going to continue," says Dr. Schulman. "The health-care industry thinks it's immune from these macro forces but at some point it can't be."
The development also comes as employers and insurers have shifted a larger share of health-care costs to consumers in a bid to tame growth of the $2 trillion health-care system. Pharmaceuticals may be an early look at how consumers react, especially when the broader economy turns sour.
"We don't have a real track record for understanding how the health-care system will respond to this new economic model where people are exposed significantly to the cost of care," says Jeff Goldsmith, president of consultant Health Futures Inc.
The burden on consumers has increased sharply. The average copay for a preferred drug on an insurance company's tiered system rose 67% to $25 in 2007 from $15 in 2000, according to the Kaiser Family Foundation. Out-of-pocket costs to cover family insurance premiums were $3,281 per employee last year, up nearly 84% from 2001.
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