Critical Issues for the Pharmaceutical Industry in 2002

1
Critical Issues for the Pharmaceutical Industry
in 2002

• David Ridley, Ph.D.
• The Fuqua School of Business
• http//www.duke.edu/dbr1/Health

2
Medicare

• Do the elderly have insurance for drugs?
• Should Congress pass a Medicare prescription drug
  benefit? How will it affect profits of
  manufacturers, wholesalers, and retailers?
• If Congress does not, do you expect state
  legislatures to do so?
• What will be the impact of pharmaceutical
  manufacturers cards, such as GSKs Orange Card
  or Pfizers Share Card?
• What impact will federal budget cuts have on
  hospitals and their purchase of drugs?

3
Medicaid

• What is Medicaid?
• What rebates must pharmaceutical firms give to
  Medicaid? Can states require additional rebates?
• Should manufacturers be required to open their
  books and disclose their average prices? Some
  manufacturers overstate AWP to payers (Medicare,
  Medicaid, private) so that providers earn a
  higher reimbursement margin and thus have an
  incentive to prescribe more of those products.

4
World Trade

• Why do firms charge different prices in different
  countries? Is legalizing drug re-importation good
  for American consumers? How will it affect the
  pharmaceutical industry?
• Should southern countries respect pharmaceutical
  patents granted in northern countries?

5
Pharmaceutical Benefits Managers

• What are some examples of PBMs?
• How responsive are consumers to changes in
  copayments?
• Is it profitable for pharmaceutical firms to
  increase rebates in exchange for better formulary
  status?
• What will be the impact of Merck-Medcos
  Generics First in which physicians are detailed
  (including samples) for generics?

6
Food Drug Administration

• Is it appropriate for pharmaceutical
  manufacturers to pay user fees to the FDA so that
  the FDA will have more resources and be able to
  review drugs more quickly? Do we want to have
  drugs approved more quickly?
• Should pharmaceutical firms be required to
  include children in clinical trials of drugs that
  might be used on children?
• Should direct-to-consumer advertising be
  curtailed?

7
Other Health Care Issues

• Should a Patients Bill of Rights include a right
  to sue? If so, should damages be capped?
• Are defined contribution health plans a good way
  for employers to control costs?
• How will HIPAA impact patients and providers?

8
Other Health Care Issues

• How should we address disparities in health care
  based on race, age, income, etc. How can we
  increase the number of insured?
• How will the Internet affect the relationship
  between patients, providers, payers? Should
  insurers reimburse patients for e-consultations
  with their providers?
• How should public health officials respond to the
  threat of bioterrism?

9
What other issues do you feel are important?
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For More Information

• bcbshealthissues.com
• www.cnn.com/health
• www.fda.gov/cder
• www.hhs.gov
• www.phrma.org