Payers to Intensify Cost-Containment Measures Targeted at Pharma

Wednesday, February 4, 2009 General News
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The Recession Will Present Particular Challenges for Pharma in the U.S., According to a New Report from Decision Resources

WALTHAM, Mass., Feb. 3 /PRNewswire/ -- Decision Resources, one of the world's leading research and advisory firms focusing on pharmaceutical and healthcare issues, finds that the economic downturn will prompt payers in major markets (U.S., France, Germany, Italy, Spain, United Kingdom and Japan) to intensify cost-containment measures targeted at the pharmaceutical industry. Mandatory price cuts or freezes are the measures that have the most immediate effect: European governments have taken such action in the past and might decide that similar measures are needed in the coming months. Governments that operate reference pricing systems might also elect to expand the scope of these systems or to reduce reference prices sharply. Strategies to stimulate greater use of generics and biosimilars will also remain a favored option, though such initiatives are somewhat slower to yield results.

In the longer term, governments will increasingly rely on health technology assessment to control the reimbursement of high-priced therapies. As a result, pharmaceutical companies may have to adopt more flexible pricing strategies for new drugs, including risk-sharing and cost-sharing agreements with payers.

The new Spectrum report entitled Strategic Overview of Pricing and Reimbursement in the Major Markets also finds that the recession will present particular challenges for the pharmaceutical industry in the U.S. The percentage of nonelderly residents without health insurance increased from 15.5 percent in 2000 to 17.1 percent in 2007 and could rise sharply in coming months, as growing unemployment deprives millions of workers and their dependents of health benefits.

"Extending access to health insurance will be a particular priority for the new U.S. administration, but the economic downturn will make it difficult to fund a major new health plan. The government will seek to eliminate what it considers to be unnecessary expenditures -- for example, by cutting subsidies for Medicare Advantage plans, empowering the Centers for Medicare and Medicaid Services to negotiate Medicare Part D drug prices, authorizing drug reimportation, encouraging the use of generics and creating a regulatory framework for biosimilars," stated Neil Grubert, M.A., Director of Pricing and Reimbursement Research at Decision Resources.

About Spectrum's Strategic Overviews

Spectrum's Strategic Overviews are comprehensive examinations of dynamic biopharmaceutical markets and industry issues. Data analysis, thought-leader consultation and the expertise of the industry-savvy Spectrum staff drive reports that offer breadth of coverage along with depth of strategic insight.

About Decision Resources

Decision Resources ( is a world leader in market research publications, advisory services and consulting designed to help clients shape strategy, allocate resources and master their chosen markets. Decision Resources is a Decision Resources, Inc. company.

About Decision Resources, Inc.

Decision Resources, Inc. is a cohesive portfolio of companies that offers best-in-class, high-value information and insights on important sectors of the healthcare industry. Clients rely on this analysis and data to make informed decisions. Please visit Decision Resources, Inc. at

All company, brand or product names contained in this document may be trademarks or registered trademarks of their respective holders.

For more information, contact: Natalia Morales Elizabeth Marshall Decision Resources Decision Resources, Inc. 781-296-2691 781-296-2563

SOURCE Decision Resources

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