I am all for finding methods for bending the healthcare cost curve down. I understand the unsustainable position that our nation faces if we don’t succeed in containing costs. The use of generic drugs is an area that has proven to show great savings as evidenced by a recent study released by The Generic Pharmaceutical Association.

There is no doubt in my mind that generic drug usage will continue to increase and that payers will continue to offer incentives to convert consumers to the use of generic drugs. So we know that generic drugs can create significant cost savings but I can’t help but wonder if the use of generic drugs is stifling innovation of new drugs?

Several articles from the Wall Street Journal and First Word recently reported that spending for healthcare actually decelerated in 2007. Although health care costs are still exploding at an aggregately unsustainable rate,and at a pace that is higher than economic and wage growth the data does provide support for the notion that generic prescriptions can and will have an impact in containing the cost of medicines.

A summary of the key points of the articles include:

- the pace of prescription-drug spending slowed to its lowest rate in 45 years, climbing 4.9%,
compared with an 8.6% increase in 2006.
- 67% of retail prescription drugs sold in 2007 were generic medications, up from 63% in 2006.
- government also is picking up more of the nation’s health-care tab
- Medicare Part D cost the government $40.5 billion in 2006 and $47.6 billion in 2007.
- Health spending was highest for hospital expenses, which grew 7.3% to $697 billion, and
physician spending, up 6.5% to $479 billion

Given the current economic conditions and the continued focus on reducing the healthcare costs in this country, it is not a surprise to see that generics have assumed a large proportion of filled prescritions this past year. That trend is likely to continue which may leave branded pharmaceutical companies feeling the effects for quite some time.

A challenge that pharmaceutical companies continue to have in adherence programs that they bring to the market is driving initial participation and ongoing engagement in their programs without “inducing” the patient. Traditionally, adherence programs have been run through a combination of interventions that include the use of alternative coupons and vouchers, samples, patient starter kits, and loyalty programs. These programs have not been extremely successful as adherence continues to be a challenge. Part of the reason, I believe is that not enough patients are motivated by a co-pay deduction or a seven-day free trial of a drug to actually take action. In addition, adherence programs are front-loaded with communication when a patient initially opts-in, but then the communication all but disappears (I know this because I am enrolled in several adherence programs).

Similar to today’s wellness programs, pharma companies have to begin understanding the catalysts that will truly motivate patients to participate and engage in adhering to their medication. They need to find methods that tap into the intrinsic motivators that engage patients.

Companies should consider a more integrated adherence program that incorporates more of a loyalty premise that enable patients by offering a choice of rewards for staying adherent – ideas such as offering patients points for persistency. While there may be some discussion around getting close to the line of an inducement, the idea is that providing patients with points that they can then redeem for health related rewards offers what we call at Maritz “purposeful choice.” It essentially allows the patient to choose from rewards that are personally meaningful and may further engage them in maintaining adherence to their medication regime. Rewards could include items such as debit cards to be used on prescription refills or may include merchandise that helps them better manage their life around the disease they have.

Or better yet, why don’t health plans, who are actively initiating wellness programs, consider working with pharma or adopting these programs under their larger wellness strategy?

The discussion on wellness has reached a crescendo pitch. From bulletin boards, to hospital outreach, to employer and health plan sponsored programs, wellness initiatives represent a strategy for recalibrating how consumers think, act and decide about their healthcare activities. For some, it is a term that conjures up images of slow deep breaths, brilliant skin and tight abs. For others, it is just another thing to be added to the already long list of things to get done. So what exactly is wellness?

Physician Halbert L. Dunn first coined the phrase in 1961 in the publishing of a small book entitled “High Level Wellness.” Dr. Dunn saw wellness as a life-style approach to achieving an optimal state of physical and mental well-being. The philosophy he embraced was based on principles of personal responsibility and environmental awareness.

Beyond what I believe are the no-brainer activities around wellness: maintain a healthy weight, don’t smoke, exercise regularly, reduce stress and eat right, there are other behaviors that are not so obvious. Some of these are: taking vitamin supplements, regular check-ups, get plenty of sleep, mental health, and while it may sound strange, taking your medication as prescribed.

But wait a minute! Doesn’t it mean if I am on medication I am not well? If I was well, I wouldn’t be on medication. Makes sense, right? Not necessarily.

Medications are prescribed for a multitude of chronic medical conditions. The most prevalent are hypertension, high cholesterol and diabetes. Patients are told that they should take their medication as directed and for as long as medically necessary. Who could possibly want a stroke, heart attack or blindness? No one comes to mind, yet millions of people are acting in ways that could trigger one of these devastating medical events because they self-medicate or in situations where they have an asymptomatic disease, they may stop taking medication all together.

There have been many industry studies completed that have gained insight on why patients discontinue their medication for chronic medical conditions. Financial hardship, no prescription plan, negative side-effects, laziness, patients reported feeling better and even denial that it is needed. Without the medications, these patients are no longer healthy. Decreased medication adherence increases hospitalizations and total costs of care. They have not achieved an optimal state of physical or mental health as called for by Dr. Dunn.

Not taking medication correctly or self-medicating actually impacts the full benefits that patients derive when taking their medication correctly and it can’t be underscored the importance that medicines play in helping to control and maintain health. In order to understand how they relate to an individual’s personal responsibility in their overall wellness, one must look at the definitions. Compliance and adherence is defined as the extent to which a patient’s behavior coincides with medical advice. This behavior includes modifying habits, taking medications, attending clinics or health fairs, changing eating habits and nutrition. Persistence is the continuation over time of the medication therapy. In other words, is the patient taking the medication for as long as medically necessary?

From these definitions, one can see the role personal responsibility has in medication therapy and its overall contribution to a person’s state of wellness. Regardless of whether the medication is needed due to poor habits or is hereditary in nature, taking it as prescribed, and for as long as necessary, will play a large role in whether a patient is on the path to wellness.

I recently read an interesting post on Fierce Healthcare regarding why people hate pharmaceutical companies so much. The gist of the article is that consumers hate pharma companies because their mishandling of current safety issues around Vioxx, Vytorin and Avandia – to name a few – has shattered public trust. The post also references an Adweek article that says consumers love to hate pharma because they don’t want to be sick enough to need drugs. In addition, negative attention aimed at pharma’s marketing practices has further eroded trust in the industry.

Despite all the criticism, I continue to believe that pharma plays a vital role in our health system and as a former pharma employee, I see the good things that pharma companies do everyday to extend and enhance the health and wellness of our society.

Undeniably, as industry continues to mishandle situations, public distrust and negative perception of the pharma industry will thrive. That said, I am amazed at the fierce level of anger and disgust that seems to exist about pharma companies. You know it’s bad when companies that were long held as gold standards in ethics and integrity are now being equated to used car salesmen, as evidenced in this Pharma Marketing Blog post

While the industry needs to do a better job of improving public trust and reassuring the public when news begins to leak around safety and efficacy issue, I believe that an argument can be made that the benefits derived from the products and services that pharma companies bring to the public far outweigh the periodic issues that occur when a drug is found to have risks that were not previously identified.

Where would we be without companies that have invested hundreds of millions of dollars in developing drugs that continue to extend and enhance human life, continue to help mitigate the risks of chronic diseases and in some instances find cures for diseases once thought incurable? Think about this … a child suffering from Hodgkin’s disease 20 years ago may not have lived, but with pharma’s continuing efforts to bring new products to market, that child today has an opportunity to live a long and healthy life. Also, pharma provides many subsidies to the uninsured population through patient assistance programs and samples of drugs that many physicians give to their patients who can’t afford medicine.

Furthermore, our healthcare system is reaching a crisis mode with escalating healthcare costs and an ever increasing unhealthy population. With the growing focus on preventative medicine and proactive wellness initiatives in reducing healthcare costs, pharma will continue to play an important role in preventing illness from occurring, managing those already sick and curing diseases that we could never fathom curable a decade ago.