Is drug pricing a problem? PHILIP J. SCHNEIDER MS, FASHP, FASPEN, FFIP PROFESSOR AND ASSOCIATE DEAN UNIVERSITY OF ARIZONA COLLEGE OF PHARMACY PHOENIX BIOMEDICAL CAMPUS

Yes! 1.The business community 2.The political arena 3.Payers 4.Health care professionals ◦Physicians ◦AMA ◦Pharmacists ◦APhA ◦ASHP ◦AMCP

Perspective of a pharmacist

Medication-Use System 1.Procurement ◦Integrity of the drug supply ◦Drug shortages 2.Prescribing 3.Transcription 4.Preparation 5.Dispensing 6.Administration 7.Monitoring 4

Balanced Scorecard Effectiveness ◦Treatment outcomes (HbA1C, BP, INR, etc.) Safety ◦Preventable adverse drug events (falls, bleeds, hypoglycemia, etc.) Cost responsibility ◦Cost/patient/month ◦Health care utilization (hospital, ED, office visits, etc.) 5

The Value Network: Medication-Use Who can respond together (profitably) to meet the common needs of customers (patients)? ◦Needs of patients ◦Efficacy ◦Safety ◦Responsible use of limited resources ◦The value of medicines ◦Availability of medicines ◦Integrity of the drug supply ◦Adherence ◦Pharmacovigilence ◦The network ◦Pharmaceutical industry ◦Governments/health insurance payers ◦Employers ◦Healthcare professions and health care providers 6

Conflicting Goals Pharmaceutical industry ◦Maximize profits Ministers of health/health insurance providers ◦Minimize costs Employers ◦Minimize health benefit costs ◦Optimize employee productivity Healthcare professionals ◦Improve health ◦Effectiveness ◦Safety ◦Balancing effectiveness, safety, and cost 7

Value Propositions* Pharmaceutical industry ◦Drug discovery Ministers of health/health insurance providers ◦Regulating and paying for drugs and health services Employers ◦Employee productivity/improved “presenteeism” ◦Managing benefit costs Healthcare professionals ◦Providing health services and improving health ◦Responsible use of medicines ◦Effective ◦Safe ◦Cost-consciousness 8

Summary comments 1.Drug prices are becoming a public policy issue 2.There are some bad players in the industry that do not understand (or appreciate) social responsibility 3.The free market system has resulted in price competition 4.There is a cost of innovation and the willingness to take risk 5.Healthcare professionals should be in a good position to optimize the value of medicines 6.It is not clear that drug prices should be regulated