Pharma's non-adherence problem is growing

Dive Brief:

  • Pharmaceutical companies could have lost an estimated $637 billion in global revenues last year due to patient non-adherence to medications for chronic illnesses, according to a report from HealthPrize Technologies and Capgemini Consulting.
  • The eye-watering figure was a significant increase from the previous estimate of $564 billion in 2012, and accounted for over a third of annual potential revenue, the report said, suggesting pharma could juice top-line revenue by tackling non-adherence.
  • The report estimated U.S. based revenue loss at $250 billion in 2015, up from $188 billion in 2012 — assuming medication adherence rates have remained at similar levels over that period.

Dive Insight:

The health impact of non-adherence to medications for chronic diseases is well known, with poorer outcomes likelier for patients. While there have been studies on the economic outcomes for healthcare providers, such as the costs of increased levels of hospitalization and re-admission, there have been fewer looking at the financial repercussions on pharmaceutical companies.

“Medication nonadherence is a serious global health issue that needs to be addressed immediately,” said Tom Kottler, CEO of HealthPrize Technologies, in a statement.

“It also happens to be a critical business issue for pharmaceutical companies, and represents the ‘final frontier’ for them — the only area of their business where they can generate significant top- and bottom-line growth, improve outcomes, and create substantial savings for the healthcare system — all at the same time.”

Increasing the adherence rate by just 10 percentage points could lead to an increase in revenue of $41 billion in the U.S. and $124 billion globally, according to the report.

The authors suggest that improving adherence could be a more attractive channel for pharma companies to grow revenue than relying on steady price increases, which have become more toxic in some areas.

While the report acknowledges the difficulties involved in extrapolating from figures published in studies, its findings powerfully illustrate the threat non-adherence poses to pharma's bottom line.

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Filed Under: Corporate News
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