Brand-Name Drugs Are Costly
Brand-name drugs are increasingly becoming a consumer luxury as more and more managed care plans start to adopt a three-tier co-payment system.
The system, widely regarded as a mixed blessing for health plan members, gives managed care a tool for passing pharmaceutical costs on to consumers by charging:
- the lowest price for generic drugs;
- a higher price for brand-name drugs that are included on the plan's formulary; and
- the highest price for non-formulary brand-name drugs.
As of this spring, approximately 60 percent of HMOs and pharmacy benefit managers (PBMs) offer this three-tier system, according to the pharmaceutical consulting firm Scott-Levin in Newton, Pa. This is up from 52 percent of plans offering the system in the fall of 1998 and 36 percent offering it in the spring of 1998.
Under this payment arrangement, managed care members pay on average $6.19 for generic drugs, $12.56 for brand-name drugs on formulary and $26.53 for brand-name, non-formulary drugs, according to Scott-Levin's recently released spring 1999 edition of the Managed Care Formulary Audit. Currently, 15 percent of HMOs and PBMs have more than half their members enrolled in three-tier plans.
(Scott-Levin Associates, Peter Nieto, 215/860-0440, http://www.scottlevin.com)
Healthcare IT Vendors Lack Marketing Muscle
If healthcare IT vendors don't do a better job of branding their services they will soon become competitive casualties as a new breed of healthcare technology marketers, like WebMD and Healtheon, take center stage. This is the key finding of a Summer 1999 Trendwatch survey conducted by ARiA Marketing (Analysis Research Insight Advice) in Boston.
The survey highlights the marketing attitudes and goals of 200 marketing executives involved in healthcare technology, high-tech and consulting. It also provides a snapshot of the industry's Web marketing initiatives, best practices and market leaders.
Key findings include:
- Branding is the No. 1 healthcare marketing issue yet is the sixth-ranked budget priority.
- 59 percent of respondents have or are developing new Internet products and services.
- 50 percent are generating sales from the Internet.
- Small healthcare IT vendors spent an average of $1.2 million last year on marketing.
"Most health IT vendors are simply not allocating sufficient funds for branding programs, which can seriously hinder their ability to compete with the new, larger players or to position themselves for a merger or acquisition," says Bruce Jankowitz, ARiA managing partner.
(ARiA, Quentin Homan, 617/457-5787)
Quality Controls Missing In Rural Markets
Quality initiatives are severely lacking in rural areas of the U.S., where managed care is slow to enter and quick to leave, according to a report by the Center for Health Care Quality in St. Louis.
Outreach to this market - which accounts for 25 percent of the country's population - is not being adequately addressed by any of the proposals being considered by Congress. In addition, there is very little data available about the quality of rural healthcare, according to the report, which makes the following recommendations:
- Funding for research on quality improvement in rural areas.
- A stronger emphasis on preventive medicine - rural patients with chronic conditions are less likely to receive care according to the latest health standards.
- Assistance with developing computerized quality improvement systems.
- Promotion of evidence-based clinical practice in rural areas.
(Center for Health Care Quality, Dr. Andrew Balas, 573/882-8416)