Medication non-adherence is a $188-billion revenue gap for pharma, says CapGemini

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New study magnifies the lost opportunity for industry sixfold; the global gap is $564 billion

Non-adherence-not taking the drugs that have been prescribed by physicians, or not taking them as per their recommended regimen—is a longstanding, well-recognized problem in healthcare. Most recently, healthcare providers, spurred by provisions of the Affordable Care Act, now have incentives to improve the quality of their care of Medicare/Medicaid patients, and better adherence is one of the measures of that performance. Now, a new study from Capgemini Consulting (New York), with support from a medication-adherence technology developer, HealthPrize Technologies (www.healthprize.com) posits that non-adherence costs industry nearly three-fifths of the revenue it could have.

“The revenue that pharma leaves on the table due to lack of adherence to prescription medications is much higher than usually thought,” explains Thomas Forissier, principal at Capgemini Consulting. “In addition, many people don't realize that a 10% boost in adherence could increase revenue by much more than 10%. That 10% loss is based on the higher revenue amount that could have materialized, not on actual revenue earned.” (For example, if adherence for a $1 drug went from 50% to 60%, the increase in revenue would be 10/50, or 20%.)

One of the most prominent statistics of non-adherence originated with the New England Healthcare Institute, which calculated a $290-billion cost to healthcare overall due to non-adhernece. But that’s a healthcare cost, not an industry revenue figure. Various estimates, ranging from $30 billion to $100 billion, have been cited as a loss in revenue to industry; it has been likened to the “hidden blockbuster” within each company. Pharma companies usually have adherence programs as part of their disease-management services, but the programs tend to be relatively small, and tend to peter out over time.

The study is available here.

Capgermini went through the literature on many adherence studies of recent years, finding that lost revenue (subdivided between “primary” or first prescription, and then “secondary” or refills) ranges widely, from over 200% for respiratory agents, to 10% for oncologics. Totaling up the lost revenue by therapy class, and comparing that to actual revenue, produces the $188-billion figure. The average lost-revenue percentage for all drugs is 59%.

“Medication non-adherence is one of the most serious problems in healthcare, posing a heavy financial impact on all constituencies,” commented Katrina Firlik, MD, co-founder and chief medical officer of HealthPrize, in a press release. “For insurers, employers, and patients, non-adherence significantly increases healthcare costs as a result of disease-related complications. For pharmaceutical companies, pharmacies, and pharmacy benefits managers, non-adherence significantly erodes profit due to prescriptions never filled and medications not taken often enough. Given the significant potential to enhance revenue and lower cost to the overall healthcare system, programs to address medication adherence should be a top priority to the pharmaceutical industry.”

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