Healthy Skepticism Library item: 8576

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Rucker TD.
Role of the pharmaceutical industry in a dynamic health care system
Drugs Health Care 1975; 2:(2):86-95

Abstract:

The potential status of the pharmaceutical industry is assessed by noting the various forces that will probably shape the health care system. Drug industry performance in the future will be influenced by underlying trends in the health care system generally. These trends include quality assurance mechanisms, the development of broadly conceived preventive measures, rationalization of health care resources, construction of reimbursement policies to achieve basic economic ends, public accountability and the institutionalization of these forces through national health insurance. The widespread use of prescription drug therapy and technological and economic problems in administering a large drug program are discussed. Since slow growth is foreseen for health maintenance organizations, industry performance will depend primarily on the provisions governing health insurance coverage. Factors are identified which will tend to decrease as well as increase prescription drug utilization under a comprehensive insurance scheme. On balance, it is anticipated that induced utilization will bring about a minimum, increase in demand of 10-15%. A somewhat greater adjustment, however, is anticipated in the sales volume of selected products marketed by a number of leading firms. Reimbursement for drug product cost is examined in terms of reducing supplier expenses for functions manifesting little social value, and, as a last resort, profit controls through enforced price reductions. Patent reform is viewed as a technique for enhancing the development of products with high therapeutic utility not as a means of encouraging price competition. A profile for identifying superior performance by manufacturing firms is presented and 2 models are suggested for estimating industry performance under changing conditions.