Does managed care fuel pharmaceutical industry growth?

Abstract

Managed-care organisations and the pharmaceutical industry have diametrically opposing objectives, though there is hidden common ground. On one hand, most managed-care organisations now want to reduce the cost of drugs or at least maintain drug costs as a hedge against inflation. On the other, the pharmaceutical industry wants to sell more of their often expensive branded drug products in the setting of ever expanding managed care. This has sparked a variety of strategies aimed to meet objectives in what could be an endless game. Presently, this exchange is a dynamic process with shifts of momentum between managed-care organisations and the pharmaceutical industry. Forces that now favour the pharmaceutical industry's growth include movement of prescription payment from out-of-pocket to payment by insurers and the numbers of available innovative drug products. Common ground between managed care and the pharmaceutical industry may be found when more of both of their efforts are invested in investigating the effects of innovative drugs on total healthcare costs of patients. To date, available marketing data indicate that the pharmaceutical industry is fuelled by managed care, which is a somewhat ironic twist.