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Drug utilization depends as much on price as it does on marketing

BY DSN STAFF

NEW YORK —When drugs lose patent protection, they and their generic counterparts gradually become cheaper. One might expect the lower price to translate into greater utilization, but according to a study by conservative public policy think tank the Manhattan Institute, this is not necessarily the case.

A drug usually loses patent protection 12 years after its introduction onto the market, at which point prices can decline by 61%, according to the study, conducted by Columbia University economist Frank Lichtenberg and Paris School of Economics economist Gautier Duflos, and based on U.S. prescription data between 2000 and 2004 from IMS Health. But even 16 years after the drug’s introduction, the rate of utilization—measured by the number of prescriptions dispensed—remains about the same.

So what happens?

Lichtenberg and Duflos found that decreased utilization of a branded drug offsets the increased utilization of its generic versions. At the same time, the decline in marketing of the drug by the branded drug’s manufacturer offsets the increase in utilization that results from the decline in price.

The authors wrote that utilization of a drug depends as much on the manufacturer’s marketing of it as it does on the drug’s price, and four years after a patent for a drug expires, the drug company typically has reduced spending on advertising by 60% because generic competition reduces the incentive to spend on marketing.

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Hy-Vee names new president

BY Alaric DeArment

WEST DES MOINES, Iowa A 28-year employee of Hy-Vee has become its new president, according to published reports.

The company appointed Randall Edeker as president of the supermarket chain Thursday at the company’s annual meeting, succeeding Ric Jurgens, who had served as president since 2001 and will maintain his position as chairman and CEO.

Edeker had previously served as EVP and COO.

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Tricare expands vaccination coverage to pharmacies, clinics

BY DSN STAFF

NEW YORK Convenience and value. That’s what community pharmacy and their retail clinic partners deliver to their patients. And that’s what the Department of Defense is counting on in covering immunizations at local pharmacies and identifying convenient care clinics as network providers — two separate pieces of news issued within the past month that really underscore the importance of pharmacies and retail clinics in the delivery of health care today.

Prior to these announcements, military personnel interested in getting their flu shots had to schedule an appointment with their doctor, as Tricare only covered the cost of shots delivered in a doctor’s office.

“As a convenient and accessible healthcare provider, pharmacy is uniquely positioned to offer services for patients, such as vaccinations,” stated Steve Anderson, president and CEO for the National Association of Chain Drug Stores. Anderson noted that as of earlier this year, pharmacists have the ability to immunize patients in all 50 states. “[This] presents an important opportunity for pharmacists to counsel patients during their visit, and an additional healthcare provider from which to obtain these vaccinations.”

It’s also quite a bit of opportunity for pharmacy — Tricare provides healthcare coverage for 9.5 million eligible beneficiaries. Those beneficiaries pick up almost 2.3 million prescriptions every week, and 1.2 million of those at retail pharmacies, according to Tricare .

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