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Internet’s IMPACT ON MEDICAL DECISIONS IS GROWING
The Internet is having a significant impact on medical decisions, according to a survey of 400 U.S. physicians.The vast majority of doctors use the Inter net as a tool for enriching their medical knowledge, and the medical information these doctors are find ing on the Internet is influencing — in many cases significantly — the types of diag noses they are making and the kinds of medications they are pre scribing. Those are the findings of a recent study on ehealth conduct ed by the Boston Consulting Group in conjunction with Harris Interactive. The study — Doctors Say E Health Delivers — also finds that about onethird of doctors are adopting or planning to adopt Internet technologies that enhance the care they deliver to patients. The doctors who have already adopted electronic medical records, electronic pre scribing, online communication with patients, and remote dis ease monitoring say these online patientcare tools have boosted their efficiency and the quality of care. Those who have not yet done so plan to adopt these tools in the future at relatively aggressive rates — from about 10% to 20% depending on the tool — greatly bolstering the e health channel in the next year and a half. The study explores physicians’ use of ehealth tools and examines the sectorspecific implications for pharmaceutical companies, managedcare orga nizations, and healthcaredelivery systems. Findings indicate that ehealth is poised to quietly transform the economics of healthcare as well as the methods used to influence decision makers in the industry. “Many industry experts expected that, at best, the Inter net would prove a diversion for doctors who had light clinical practices or a serious interest in computers,” says Carina von Knoop,a BCGVP and coleader of the firm’s ehealth initiative. “But our interviews indicate that 89% of physicians use the Internet and that virtually all of these doc tors have migrated some of their medical knowledgeenrichment activities online.Fully 90% of doc tors online research clinical infor mation on the Internet.” Findings also concluded that the busiest clinicians are most likely to turn to the Web to enrich their professional knowledge. These are the doctors who spend more time with patients and who therefore have more oppor tunities to diagnose conditions, manage patient care, select treat ments, and write prescriptions. Quite simply, they are the very doctors that healthcare organiza tions target as they seek to influ ence the delivery of healthcare. These and other findings from the study have significant implications for healthcare players, explains Ms. von Knoop.“Last year, the pharmaceuti cal industry in the U.S. alone spent $13 billion to reach doctors, but spent only 1% of this amount on Internet channels. These same companies continue to rely on drug reps as the preferred medium for physician education, but the average doctor spends PHARMA TRAX SALES, MARKETING, AND R&D TRENDS AFFECTING THE HEALTHCARE INDUSTRY 26% of physicians have online communication with patients 22% of physicians rely on electronic medical records 11% of physicians are prescribing drugs electronically 5% of physicians monitor patients’health electronically About onethird of the 400 doctors surveyed by BCG now use or plan to use at least one of the first three tools, and a smaller percentage plan to adopt remote disease monitoring; planned adoption would roughly triple these percentages in the next 18 months. TOOLSTHATOFFERTHE GREATEST POTENTIALTO PHYSICIANS # # # # R&D FUNDING FOR 2002 BUFFETED BY POLITICAL CHANGE, ECONOMY, AND TERRORISM.Total R&D expenditures in the U.S. are expected to increase about 3.5% to $285.6 billion in 2002, according to the annual Battelle R&D Magazine research and development fore cast. Three significant factors have combined to exert influence on the state of R&D funding for the upcoming year — the change in White House administration, the faltering economy,and the events and aftermath of the Sept. 11 terrorist attacks. “The effects of these are not simply isolated and cumulative,” says Dr. Jules Duga, a Battelle senior researcher and coauthor of the report. “It is clear that there are interactions among the three, and — when superimposed upon what one might consider a `nor mal’set of circumstances of change — their effects are somewhat more dif ficult to deal with.” The impact of significant external forces cannot be underestimated. “In previous years, the analysis of the emerging patterns of R&D could readily accommodate almost any singular disruption and could present a reasonable picture of the anticipated effects,” Dr. Duga says. “However, the concurrent triplewhammy experienced over the past few months creates a degree of uncertainty that is higher than usual and adds a layer of complexity to the forecast.” POLITICAL AND ECONOMICCLIMATETO IMPACT 2002 R&D SPENDING PROJECTED FUNDING OF R&D FOR 2002 $200 $150 $100 $50 $0 Note:$ are in billions Industry Federal Universities & Government Other Non profit $194.69 (68.6%) $75.5 (26%) $15.36 (5.4%) Source:BattelleR&D Magazine The federal government is expected to spend $75.5 billion on research and development in 2002, which is a 4.7% increase over 2001 Industry continues to lead in the number of dollars funding R&D with about $195 billion expected to be spent in 2002, which is a 3.2% increase Academia and nonprofits provide the other significant portion of national R&D funding, which is expected to be $15.4 billion, about 3% more than was com mitted in 2001 R&DHIGHLIGHTS FOR 2002 # # # Source: BattelleR&D Magazine less than one hour a week with reps compared with about three hours a week seeking medical information online.This disparity suggests that com panies that don’t reallocate some of their marketing investments may soon find themselves under investing in a highly promising new channel.” The study also found that the vast majority of doctors who visit healthrelated Web sites — rang ing from 70% to 90% — report that the information they find online has an impact on medical decisions about diagnoses and treatment. Roughly onethird of these same doctors report that the information they find on the Internet has a major impact on the way they interact with patients; around 20% say it has a major impact on their knowledge of symp toms and diagnoses,as well as on the way they inter act with patients; and 13% say it has a major impact on the drugs they prescribe. More than twothirds of physicians surveyed behave like online consumers, returning regularly to between two and five sites.Doctors who visit at least one site regularly named WebMD, Medscape, and Physicians’Online as their top three destinations. “Although it is relatively easy to find doctors online, it will be challenging for healthcare organiza tions to market to them,” Ms. von Knoop says. “It is important to remember that the sites to which doc tors return most frequently place strict limits on sponsorship and content.Therefore,healthcare orga nizations will need to focus on devising unique and customized ways to get their messages to doctors.” According to Ms.von Knoop,“Already most users in our survey report that online patientcare tools have improved their overall efficiency,enabled them to deliver better care, increased patient satisfaction, and, in some cases, saved their practices money.The early successes with patientcare tools illustrate the depth and breadth of the opportunities they pre sent to doctorsand healthcare players.” DTC advertising HELPS IMPROVE COMPLIANCE Directtoconsumer advertising of prescription drugs helps patients more actively participate in their healthcare, increasing the likelihood that they will follow their treatment regimen, according to a study conducted by RxRemedy Inc. and released by Pfizer Inc. “DTC advertising helps solve one of the biggest problems facing doctors — how to get people to take their medication,” says Dorothy Wetzel, senior director, group leader, of the consumer marketing group at Pfizer. “When about 40% of patients don’t take their medicines as directed, encouraging patients to get involved in treatment decisions is crit ical.This study shows that drug ads play a role in yield ing a better bottom line for patients: good health.” An analysis of five medical conditions — nasal allergies, arthritis, depression, high cholesterol, and diabetes — shows that patients who involve them selves in their healthcare by asking their doctor for a prescription drug are more likely to take their medi cation than those who do not.The study, based on a nationally representative database of 25,000 patient participants collected and analyzed by RxRemedy, further shows that compliance is greatest among patients who asked for a medicine because they were prompted by seeing a DTC advertisement. “It’s common sense — if patients work with their doctor to decide what treatment is right for them, they are more likely to stick with that treatment,”Ms. PHARMA trax 77 PharmaVOICE M a r c h 20 02 PEOPLE WITH NASAL ALLERGIES — more than twice as likely to stay on their medication ARTHRITIS PATIENTS — 75% more likely to stay on their medication PEOPLE WITH DEPRESSION — 37% more likely to stay on their medication HIGH CHOLESTEROL SUFFERERS — 16% more likely to stay on their medication PATIENTS WITH DIABETES — 10% more likely to stay on their medication PATIENTS, WITH SPECIFIC DIAGNOSED CONDITIONS, ARE MORE LIKELY TO REQUEST A SPECIFIC DRUG AS A RESULT OF SEEING ADTCADVERTISEMENT # # # # # 600+ Participants and November 2001 event! Revamped Program and Speaker Panel Expanded Exhibit Hall Outstanding Networking Opportunities PHARMA trax 78 M a r c h 200 2 PharmaVOICE Wetzel says. “DTC ads help patients to stay on their treatments longer.” Following treatment regimens can help decrease the burden on the nation’s healthcare sys tem. According to the Journal of Research in Phar maceutical Economics, 5.5% of all hospital admis sions are due to noncompliance, which results in $8.5 billion in unnecessary hospital expenditures each year, plus another $17 billion to $25 billion in estimated indirect costs. According to the study, patients diagnosed with nasal allergies who request a specific drug as a result of seeing a DTC advertisement are more than twice as likely to stay on their medication. Similar results were found for other conditions.Arthritis patients are 75% more likely to stay on their medication. People with depression are 37%more likely,high cholesterol sufferers are 16% more likely, and those with dia betes are 10% more likely to remain on their medi cation if they requested a specific drug as a result of a DTC advertisement. “This could be especially good for men,” says Dr. Jean Bonhomme of the Men’s Health Network, who notes that men are difficult to engage in their healthcare. “Despite a traditional reluctance to visit the doctor or take their medications, men who are motivated by advertisements may become more active participants in their own healthcare, which can potentially have very beneficial effects.” GEOGRAPHY HAS IMPACT on prescriptiondrug use A comprehensive statebystate study of pre scription drug use suggests that it is no longer just a patient’s age and gender, but also where they live that can determine which and how many medica tions they use. That is the finding in the study released by Express Scripts Inc. According to the study, the per cent of adult beneficiaries obtaining at least one pre scription in 2000 ranged from a high of 71% in Kansas to a low of 58% in California. The average numberof prescriptions per memberper year varied from 8.3 in New York to 12.2 in Kentucky. Generally, prescription drug use was lower in the Northeast and West, and higher in the South and Midwest. For children, the percentage receiving at least one prescription varied from a high of 64% in Louisiana to a low of 48% in Arizona,with use higher in the Midwest and West South Central and lower in the West. The Express Scripts research team, led by Brenda Motheral, RPh, MBA, Ph.D., tracked age and gender adjusted prescription drug use for a random sample of commercially insured Express Scripts members who were continuously enrolled throughout 2000. The study sample consisted of 527,512 adults and 194,538 children, with more than 700 different client groups represented. “Even greater variation was found when we examined prevalence of prescription drug use for 23 of the most commonly prescribed therapy cate gories,” Dr. Motheral says. For example, use of gas trointestinal drugs was greatest in the South, while antiasthmatic use was lower in the South. Estrogen use was lowest in the Northeast. On a statebystate basis,Kentucky,Louisiana,and Mississippi ranked in the top five in usage for more than 10 of the 23 therapy classes. Among the states with the lowest prescription use were Colorado,Min nesota,Oregon andVermont,which appeared in the bottom five 12 times or more and never appeared among the top five for any therapy class. The study found that variation in nonchronic therapy classes was greatest for cough/cold/allergy medications and in chronic classes such as for calci um channel blockers. Louisiana had the highest prevalence of use of cough/cold/allergy medications, with 23% of respondents using at least one prescription, while Vermont had the lowest prevalence of use at 7.5%. For calcium channel blockers, usage ranged from a high of 5.3% in South Carolina to a low of 1.3% in Oregon. “The variation in calcium channel blocker use could reflect uncertainty regarding diagnosis and treatment,” explains Dr. Motheral, noting that the National Institutes of Health and the American Heart Association had issued statements cautioning physi cians about the use of certain shortacting calcium channel blockers in specific patient groups. “For cough/cold/allergy medications, there are a number of potential explanations for the high degree of variability,”Dr.Motheral says.“Among these are climate differences and physicians’propensity to recommend nonprescription, overthecounter cough/cold products, as well as the influence of directtoconsumer advertising on patient prefer ences for nonsedating allergy and decongestant combinations available by prescription.” Among children, the greatest variation was found for cough/cold/allergy products — 26.7% in Louisiana compared with 3.5% in Maine — followed by stimulant therapy for attention deficit hyperactiv ity disorder — 6.5% in Louisiana versus 1.9% in Col orado — and antibiotic cephalosporins — 19.5% in Louisiana versus 7.2% in Washington. “The higher variation for use of ADD stimulants likely reflects the uncertainty around the diagnosis and treatment of ADHD, while the variation in cephalosporin use may relate to differences in physi cians’ propensity to reserve these medications for secondline use, although differences in bacterial resistance cannot necessarily be ruled out,” Dr. Motheral says. REDUCINGTHE COSTS of prescription medications is a leading health concern Respondents to a survey said reducing the costs of prescription medications is their leading health concern.The AmerisourceBergen Index polled 1,039 people nationwide on a range of topics. The quar terly survey was conducted by Opinion Research Corporation International on behalf of Amerisource Bergen, the largest phar maceutical services com pany in the U.S. dedicated solely to the pharmaceu tical supply chain. The survey also looked at the issue of selecting a pharmacy. As in past AmerisourceBer gen indexes conducted in 2001, convenience beat out other options, with 34% of respondents say ing availability was a top priority.Next were accept ing a person’s insurance card, 25%; competitive pricing, 14%; and staff availability and knowl edge,13%.And while con sumers expressed confi dence about the quality of the medications pur chased in the U.S., their faith did not carry over to prescription products purchased outside the country via the Internet. Nearly 9 out of 10 respondents,87%,said they would not purchase prescription drugs from another coun try over the Internet. The majority of consumers expressed confi dence in generic medications, with more than threequarters of respondents saying they are just as effective as their brandname counterparts. The same held true for storebrand nonprescription products. More than half the survey respondents, 56%, said they would choose a lowerpriced, store brand medication over a brandname overthe counter product. KENTUCKY LOUISIANA MISSISSIPPI Ranked in top five in usage for more than 10 of the 23 therapy classes COLORADO MINNESOTA OREGON VERMONT Appeared in the bottom five 12 times or more and never appeared among the top five states for any therapy class STATEBYSTATE STUDY REVEALS THAT GEOGRAPHY PLAYS A ROLE IN RX DRUG USE BYTYPE ANDQUANTITY # # 63% of respondents said a prescription drug benefit program for seniors should be paid for by drug manu facturers, pharmacies, insurance companies, and taxpayers 32% of respondents said the government should address the issue of drug costs in 2002 25% of respondents were concerned with universal health insur ance 25% of respondents wanted a prescription drug benefit program for seniors CONSUMERS RANKTOP HEALTH ISSUES FOR 2002 # # # # 79 PharmaVOICE M a r c h 2 002 PHARMA trax Lastly, consumers were asked what screening programs they would like to see at their local phar macies. Blood pressure and cholesterol screenings led the list at 27% and 22%, respectively. Next were diabetes screenings,16%;vision or glaucoma exams, 10%;and bonedensity screenings, 7%. Copays record BIGGEST INCREASES IN FOURYEARS Managedcare organizations report the largest increases in prescription copays since 1998,accord ing to the Pharmaceutical RiskSharing Audit and Forecast 2002 from Market Measures Interactive LP. Based on telephone interviews with executives in 100 HMOs, the study reveals that, on average, man agedcare organizations have raised copays for thirdtier products almost $5 since last year. They have also boosted secondtier copays by almost $2. While HMOs are increasing prescription copays, they are also starting to offer members a wider vari ety of copay designs with greater flexibility. Although fourtier, fivetier, and variable copay ben efits remain rare, they are expected to become more common.The higher tiers would allow the inclusion of lifestyle drugs that are not medically necessary, as well as of biological or injectable agents that tend to be extremely expensive. “The vast majority of managedcare organiza tions already offer threetier plans to their HMO members, and now we also are seeing increases in the number of HMOs offering threetier benefits to their PPO, POS, and indemnity members,” says Chris Droukas, senior director of managedcare services at MMI.“Clearly, managedcare organizations view pre scription copays as relatively effective costcontain ment tools and continue to use them more fre quently than any other risksharing approach.” In addition, the study provides profiles of phar macy benefit designs in the top20 HMOs and an assessment of threetier structures in leading thera peutic categories. “ This highvalue information is a powerful resource for guiding pharmaceutical companies in building more effective managedcare pricing,nego tiating and contracting strategies,”Ms. Droukas says. MMI’s Pharmaceutical RiskSharing Audit and Forecast helps pharmaceutical manufacturers understand and track managed care’s move to high ertier copays.The audit examines where the man agedcare industry is headed in 2002, as it comes under increasing pressure to reduce costs.Now in its third year, MMI’s Pharmaceutical RiskSharing Audit and Forecast presents costcontainment success stories,and illuminates actual experiences with high er copays, including cost savings versus revenue as well as the programs managedcare organizations are using to supplement or replace threetier co pays and the products already subject to variable co pays, fourthtier position, or other riskshare approaches. Worldwide bioinformatics market EXPECTEDTO REACH $1.7 BILLION by 2006 The worldwide market for bioinformatics is expected to reach $1.7 billion by 2006, driven by bioinformatic technologies that decrease the time and money required for drug discovery and devel opment. Emerging bioinformatic applications could reduce the cost of drug discovery by 33% and also accelerate the process by two years, according to a new Front Line Strategic Market report entitled Bioinformatics, A Strategic Market Analysis. Consisting of the content, analysis software, and IT infrastructure provider segments, bioinformatics will grow at a compound annual growth rate of 20%, with the largest growth in the analysis software seg ment. Largevolume data mining and the need for analysis and visualization tools to support complex analysis, such as relationship modeling,will drive the $202 million analysissoftware segment to grow to $634 million in 2006. One of the biggest questions facing users of bioinformatics is whether to purchase content or technologies from commercial vendors, or to devel op tools inhouse to meet the company’s specific needs. Front Line estimates that pharmaceutical and biotechnology companies will continue to allocate 60% of their total bioinformatics spending to com mercial vendors, totaling $1.1 billion in 2006.Current ly, companies allocate the largest share of their bioin formatics budgets to content, spending $225 million in 2001, and doubling to $445 million in 2006 as the availability of comprehensive and annotated data sets increases.Leading content suppliers include Cel era, which provides genome data for DNA sequenc ing,and Incyte,which provides geneexpression data. While genomics currently represents the largest application segment for bioinformatics spending, the most significant growth opportunities are pre sented in proteomics and pharmacogenomics, which will account for $469 million and $351 million in 2006, respectively. Specifically, proteomics will grow at a 39% CAGR through 2006, given that it is the most direct wayof identifying and studying drug targets. In addition, pharmacogenomics will grow at a 38% CAGR, enabling the development of thera peutics tailored to patients’ genetic profiles.Temper ing the growth will be a lack of standard data for mats, the lack of common protocols, and interoperable technologies.This will present a signif icant barrier for endusers when it comes time to integrate data from various sources. Nonetheless,pharmaceutical and biotechnology companies will continue to seek tools to aid them in identifying relationships across biological data types. As bioinformatics is more widely applied to discov ery and development,endusers will adopt solutions that streamline the access, tracking, interpretation and sharing of data from disparate sources and data types, with minimal impact on resources. AMERISOURCEBERGEN,Valley Forge,Pa., is the largest pharmaceutical services company in the U.S. dedicated solely to the pharmaceutical supply chain. For more information,visit amerisource.com. BATTELLE,Columbus,Ohio, serves indus try and government in the areas of tech nology development, laboratory manage ment,and technology commercialization. For more information,visit battelle.org. THE BOSTONCONSULTING GROUP, Boston, is a general management consult ing firm. For more information, visit bcg.com. EXPRESS SCRIPTS INC., St. Louis, is one of the largest pharmacy benefit manage ment companies in North America.For more information, visit express scripts.com. FRONT LINE STRATEGIC CONSULTING INC., Foster City, Calif., offers strategic busi ness intelligence through exclusive con sulting engagements and essential indus try reports in the lifesciences and con sumer industries. For more information, visit frontlinesmc.com. MARKETMEASURES INTERACTIVE L.P., East Hanover,N.J., is a NOPWorld Health company,and a leading supplier of prima ry research to the global healthcare com munity.For more information, visit mmi research.com. PFIZER INC., NewYork,discovers,devel ops,manufactures,and markets leading prescription medicines, for humans and animals, and consumer products.For more information, visit pfizer.com. RXREMEDY INC.,Westport,Conn., is a leader in healthinformation services, pro ducing largescale research and marketing projects for clients in the pharmaceutical, managed care and other healthrelated industries. For more information, visit rxris.com. Follow up