NEW YORK – In recent years, costs for new prescription drugs in the United States have skyrocketed 60%, and elected officials regularly call for measures to bring down prices. But behind the soaring prices for new medicine, patients are demonstrating a stronger commitment to treatment protocol. New research from Columbia Business School Cain Brothers & Company Professor of Healthcare Management Frank Lichtenberg finds that patients are 2.5% more likely to start and stay on a course of treatment for every 10-year decrease of a drug’s time on the market – equivalent to a 0.35 USD reduction in copayment for each day of a patient’s therapy.
Nonadherence – when patients do not fill or take prescriptions as advised by doctors – costs the US healthcare system $100 billion every year in hospital and other medical expenses. With the average age of drugs on the market hovering at about 30 years old, the potential to reduce costs – and increase patient health outcomes – is enormous.
The new research, co-authored with University of Duisburg-Essen (Germany) Professor Katharina E. Blankart, finds that when patients are prescribed newer drugs, they are more likely to adhere to their course of treatment. The researchers control for patients’ conditions, education level, and socioeconomic status in examining data from the Truven Health Marketscan database, which provides complete pharmacy and medical claims data for about 50 million insured employees and their family members, finding that biomedical innovation contributes to overall improved health outcomes for chronic disease sufferers. Innovation, then, could be said to improve adherence – a key determinant of patients’ health.
While higher adherence levels may contribute to an initial spike in costs – with newer, more expensive drugs higher in demand – overall healthcare costs could be reduced due to the overall impact of newer drugs on patients’ health. Going forward, prescribers and pharmacy benefit managers should be aware that it may be in their best interest – and that of their patients – to spring for a newer, potentially more expensive drug. Doing so could improve both costs and patient health outcomes.
The study, Are Patients More Adherent to Newer Drugs? is available online here.
To learn more about the cutting-edge research being conducted at Columbia Business School, please visit www.gsb.columbia.edu.
About the researcher
Frank R. Lichtenberg is Cain Brothers & Company Professor of Healthcare Management in the Faculty of Business Economics at the Columbia University Graduate School...Read more.