June 4, 2014 – Burlington, Mass.— The emphasis on drug costs is changing the way doctors in accountable care organizations (ACOs) prescribe, threatening the bottom line for branded therapies and the pharmaceutical industry.
Payers and providers feel that acute coronary syndrome (ACS) and atrial fibrillation (AF) are ripe for cost and quality improvements. A majority of the pharmacy directors and medical directors at managed care organizations (MCOs) are more frequently prescribing generic drugs for ACS and atrial fibrillation AF or will be in the next 12 months, according to a recent survey by Decision Resources Group.
“ACOs drive prescribing to generics that are market mainstays, most often clopidogrel for ACS and warfarin for AF,” said Chris Lewis, an analyst with Decision Resources Group. “Otherwise, our survey indicates that ACOs neither discourage nor encourage other specific treatments for ACS and AF. Drug marketers should be able to prove their case that their products should be preferred because of the ability to reduce costs and improve outcomes.”
The survey asked 100 cardiologists and more than 40 MCO pharmacy and medical directors who are currently contracting with ACOs about reimbursement arrangements, formulary restrictions, metrics tied to provider compensation, and other factors that influence decisions to use branded drugs or generic alternatives.
Industry insiders expect unsurpassed growth in the number of ACOs and the number of lives covered by ACOs. While it can be difficult to change the way providers prescribe, providers are adopting the principles that serve as the framework for ACOs and are starting to make changes in what they prescribe.
“The emergence of ACOs is now upon us and these entities will present challenges and opportunities for the drug industry,” said Decision Resources Product Manager Roy Moore. “A focus on costs and generic prescribing targets could harm branded therapies, but a push for drug compliance and screenings may increase the number of patients taking specific medications.”
This environment is making it more challenging for the branded drugs, such as Eli Lilly’s Effient, AstraZeneca’s Brillinta, Sanofi’s Multaq, and Pfizer/Bristol-Meyers Squibb’s Eliquis, to compete. Branded pharmaceutical marketers are trying to protect their market share by emphasizing the clinical advantages of their branded therapies over generic alternatives. If their drugs can keep patients out of the hospital or make them more compliant with drug regimens, that aligns with the ACO’s goals of increasing compliance, reducing hospital readmissions, and improving health outcomes.
“Most MCOs and cardiologists expect these organizations to take on more of the financial risk, including prescription drugs,” said Lewis. “Given that MCOs expect more ACOs to eventually develop separate drug formularies, it behooves drug marketers to start laying the groundwork for preferred product placement, including homing in on the clinical advantages that enhance compliance and keep patients out the hospital.”