One high-impact area in the healthcare space that often finds its place in the backseat is – patient noncompliance. A term that is commonly used in regard to ‘a patient who does not take a prescribed medication or follow a prescribed course of treatment.’ It comes with a steep price, for causing serious adverse impact not just on human health and health system, but also in the pharma business. Intriguingly, such incidents are still not scientifically monitored enough and vigorously acted upon, both globally and locally.
The World Health Organization (W.H.O) has also flagged it as a huge problem, as it reports, 10 percent to 25 percent of hospital and nursing home admissions result from patient noncompliance. Furthermore, about 50 percent of prescriptions filled for chronic diseases are not taken correctly, with 40 percent of patients not adhering to the treatment regimen.
In this article, just after giving a flavor to its financial cost to patients, I shall dwell mostly on its impact on the pharma players, as overcoming this important problem doesn’t generally fall in the area of strategic focus for most of them. Finally, I shall explore how drug manufacturers can translate this problem into an opportunity – as the third growth driver for business, creating a win-win situation for all.
Economic and health impact on patients:
Noncompliant patients suffering from both acute and chronic ailments, pay a heavy price, not just in terms of longer suffering arising out of complications, but also incurring significantly more health expenditure for treatment of the same diseases. According to IMS Institute for Healthcare Informatics, on average, less than 40 percent of patients around the world are fully complying with their treatment instructions.
Even in the Indian context, the problem is no different. Let me illustrate the point with the example of a chronic disease, such as Asthma. The article published on June 26, 2018 in ‘Lung India’ – the official publication of Indian Chest Society reported: “The mean annual direct costs among compliant and non-compliant patients were ₹14, 401 and ₹24, 407, respectively. Percentage of hospitalization was less among the compliant group (6 percent) when compared with noncompliant group (17 percent).”
The study concluded, asthma is not only associated with patient-specific impairment, but also creates a significant economic burden for the family and society. The major contributors to the burden are the medication cost and hospital admissions. Patient compliance with prescribed drugs can help keep asthma under control, thereby decreasing the economic burden and emergency hospital admissions – avoiding the economic risk from ill health with high out of pocket payments. Productivity loss is another under-appreciated source of economic loss contributing to indirect cost. The rising costs of investigations, interventions, and treatment of chronic diseases further complicate the problem.
Economic impact on pharma business:
According to November 16, 2016 report, published by Capgemini and HealthPrize Technologies, globally, annual pharmaceutical revenue losses had increased from USD 564 billion in 2012 to USD 637 billion due to non-adherence to medications for chronic conditions. This works out to 59 percent of the USD 1.1 trillion in total global pharmaceutical revenue in 2015.
The report highlights, besides medication nonadherence being a serious global health issue that needs to be addressed immediately, it also happens to be a critical business issue for pharmaceutical companies. Thus, it is the only area of their business where a sharp strategic focus “can generate significant top – and bottom-line growth, improve outcomes, and create substantial savings for the healthcare system – all at the same time.”
Major reasons for patient noncompliance:
Several reasons are commonly attributed to patient-noncompliance to medicines, such as:
- Lack of knowledge of its health and economic impact
- Importance of completing the full-course of the drug and dosage regimen for long-term remission, following immediate relief
- Untoward side-effects and other inconvenience
- Forgetting therapy because of preoccupation
- Financial inability to complete the prescribed treatment regimen due to the high cost of drugs.
Nevertheless, the 9th Edition of Global Research Report by Capgemini Consulting underscores that reality is more complex. Patient adherence initiatives, if any, when undertaken, even by pharma companies, often lack a thorough understanding of the root causes of discontinuing treatment and failure to effectively engage patients with a holistic approach to the issue. It also emphasizes: “Individual tactics are tried by different brands and then discontinued as budgets and priorities shift, before their impact is known. Successes are seldom pulled through and expanded across the organization.”
Using it as the third major growth drivers for pharma:
The two primary factors that drug manufacturers are leveraging to boost growth of the organization are:
A. New product introduction – gradually extending to line extensions and new indications. One such illustration is the cholesterol-fighting drugLipitor of Pfizer. The lifetime sales of this brand as of the end third quarter 2017 generated a stunning USD 150.1 billion of business for the company. Incidentally, Lipitor patent expired in 2011. There are many similar examples, including Humira of AbbVie.
B. Regular and hefty price increases for already marketed products, for various reasons, but almost regularly. According to this 2019 report, percentage price increases, on a huge base, of some of the world’s top pharma brands were as follows:
- AbbVie: Humira, a blockbuster drug with USD 15 billion in sales in the first 9 months of 2018: +6.2%
- Allergan: Many of its brand-name drugs, including dry-eye medication Restasis: +9.5%
- Biogen: Multiple sclerosis drug Tecfidera: + 6%
- Bristol-Myers Squibb: Eliquis, a drug that prevents blood clots and is on pace for USD 6 billion in sales in 2018: + 6%
- Eli Lilly: Type 2 diabetes medication Jardiance: + 6%
Many studies have captured the importance of regular price increase, as a key pharma strategy, not only to drive the internal growth, but also to keep their investors, as well as, the stock market on the right side. There are examples that for some of the top global pharma players, this strategy was directly responsible for 100 percent of earnings-per-share growth in 2016, and more than 20 percent of the revenue made in the first three quarters of 2018.
On the other hand, some top analysts’ findings highlight that drug companies serious strategic focus just on the issue of patient noncompliance with novel tactical measures, could fetch as much as a 30 percent increase in annual earnings per share for many players, even in India.
This brings up to the point – can strategic focus to minimize patient’s non-compliance, supported by adequate resources, be the third growth driver for drug companies?
Can focus on patient noncompliance be the third growth driver for pharma?
For a moment, leaving aside the above two primary growth drivers, if we look at the estimates, as quoted above, well over 50 percent to 60 percent of a brand’s potential sales is wasted due to patient noncompliance. Isn’t it huge? Can this be ignored? Obviously not. Instead, why not pharma converts this problem into an opportunity, with a sharp strategic focus, leveraging technology.
Translating this potential opportunity into reality is neither very easy nor is every company’s cup of tea. But the reward for the winners is indeed phenomenal. To chart on this frontier, one of the toughest barriers, besides a winner’s mindset, is getting access to credible and meaningful patient-data, for various reasons. On the other hand, it isn’t an insurmountable problem, either – especially, with today’s rapidly progressing technology.
Some companies have started the long march:
According to the review article, published in the New England Journal of Medicine: ‘The ability of physicians, to recognize non-adherence is poor, and interventions to improve adherence have had mixed results. Furthermore, successful interventions generally are substantially complex and costly.’
Realizing that it as a potential opportunity – disguised as a problem, several pharma players have started thinking about exploring this not much charted territory, confirm reports coming from different countries of the world. To give an illustration, November 22, 2016 edition of Fierce Pharma reported: ‘Pharma companies have more recently joined the conversation with partnerships and programs that include adherence aims.’
It is generally believed today that rapid ascendency of modern technology, and its strong influence on people, will help create a new awareness of its current adverse impact both on patients and the drug companies.
What else could be done in a much wider scale?
Digital interventions, such as smartphone apps, are becoming an increasingly common way to support medication adherence and self-management of chronic conditions. In this regard, the May 14, 2018 study titled, ‘Smartphone apps for improving medication adherence in hypertension: patients’ perspectives’, published in the journal of Patient Preference and Adherence, concluded as follows:
‘These data showed that patients can identify the benefits of a medication reminder and recognize that self-monitoring their blood pressure could be empowering, in terms of their understanding of the condition and interactions with their general practitioners.’ But some loose knots are still to be tightened.
Tightening the loose knots:
Having leveraged the state of the part digital technologies to tighten the loose knots in this area,a host of AI-enabled smartphone health and diagnostic apps, capturing patient compliance details, especially in chronic disease areas, are fast coming up. Most of these are being developed by large, small and medium sized non-pharma pure tech companies, including startups. For example, according to reports: ‘With the release of the Apple Health Record and Apple Watch with a single-lead ECG, it’s evident that Apple has officially entered the healthcare space.’
A good number of these apps have received even the US-FDA approval, such as: MyDose Coach - a reliable dose calculating app for type 2 diabetic patients who take insulin once-daily in concert with physician guided insulin recommendations. Or, GoSpiro – a home spirometer, to measure air output from the lungs for COPD patients and connects wirelessly to provide hospital-quality data regarding breathing.
That many non-pharma entities are trying to create a space for themselves in a high-tech, but non-drug treatment segment within the pharma space, has prompted, several drug manufacturers to rewrite their marketing playbook, incorporating this ‘new notation’.
It’s real now…for some:
As the above Fierce Pharma article reported: ‘Pharma companies have more recently joined the conversation with partnerships and programs that include adherence aims; efforts from Verily and Sanofi and IBM and Novo Nordisk have recently made the news.’Further, on November 07, 2018, in another report it brings to the fore that Geisinger Health System has developed mobile apps to manage asthma with AstraZeneca, and a wearable app to manage pain with Purdue. It also joined forces with Merck to develop tools for patients and caregivers to improve care coordination and medication adherence.
Moreover, on February 09, 2019, Japanese drug major Astellas and WiserCare - a company that develops healthcare decision support solutions, announced a collaboration that includes improving patient adherence to care plans, and improve the overall care experience.
‘Acquiring new customers is important, but retaining them accelerates profitable growth,’ is the theme of an article, published in Forbes on June 08, 2016. Therefore, just as any other business, this dictum applies to the pharma industry, as well, especially in context of patient noncompliance to medicines, with a clear strategic focus to minimize its impact on performance.
The major reasons for patient noncompliance ranges from ignorance of its adverse impact on health to side effects, forgetfulness and right up to inability to afford full-course of the prescribed drug treatment. Despite its continuity over decades, adversely impacting patients, health system and the pharma players, it won’t be prudent to infer that no attempt was being made in the past, to address this critical issue. Nevertheless, those measures have not worked, for many reasons, as we see today from various research studies in this area, even in the Indian context.
Once again, intervention of technology to make patients compliant to medicine, is showing promise for following it up more vigorously. That some global drug majors are entering into collaborative arrangements with non-pharma, technology companies of various sizes, sends a signal of the emergence of a third major growth driver for pharma, as discussed above.
This issue is so important, especially considering that the low hanging fruits of R&D have mostly been plucked, just as regular hefty increases of drug prices are meeting with tough resistance, squarely. In this scenario, a robust strategic focus on patient compliance would not only boost pharma sales but would also reduce the disease burden of a large section of people significantly. This will benefit all and harm – none.
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.