http://www.forbes.com/sites/johnlechleiter/2013/07/21/medicine-is-most-expensive-when-its-not-taken-at-all/
Medicine Is Most Expensive When It's Not Taken At All

If you want to know the real value of medicines, some of the best
evidence comes from studies of what happens when people don’t take
them.  Recent research highlights the importance of adherence – the
extent to which patients stick to their course of therapy – for
realizing that value.
Conventional wisdom holds that pharmaceutical treatments are a major
cause of high health care costs, but the fact is, medicines account
for only about 10 percent of health care spending, and they’re often
the most cost-effective means of preventing and treating disease.
So making sure to take your medicine is good not just for individuals,
but for the health care system as a whole.
An independent study released in June by the IMS Institute for
Healthcare Informatics estimated that the U.S. health care system
could save $213 billion annually if medicines were used properly.
The IMS study identified six factors in avoidable costs.  The largest
factor by far is nonadherence, accounting for nearly half of the
potential savings – $105 billion, including $72 billion for hospital
care. IMS studied the impact of nonadherence for six specific
conditions – high cholesterol, diabetes, hypertension, osteoporosis,
HIV, and congestive heart failure – and therefore underestimates
avoidable costs for all diseases.  But even this conservative estimate
clearly shows that ensuring patients take their medicines can
dramatically cut health care costs – not to mention the benefits to
health and quality of life.
By comparison, total U.S. spending on pharmaceuticals in 2012 was $325
billion. If we can avoid costs equal to one third of that total simply
by improving adherence for just six conditions, it’s evident that
medicines more than pay for themselves in the health care system.
An article in the July issue of Health Affairsechoes the IMS findings.
 A study of patients with diabetes, heart failure, and pulmonary
disease who were enrolled in the Medicare Part D prescription drug
program found that poor adherence was related to otherwise unnecessary
medical and hospital services under Medicare Parts A and B costing
from $49 to $840 per beneficiary per month.
Another study of adherence among patients with several chronic
vascular conditions, published in Health Affairs in 2011, concluded
“that despite higher pharmacy spending, medication adherence by
patients with chronic vascular disease provides substantial medical
savings, as a result of reductions in hospitalization and emergency
department use.”
Annual net savings per person amounted to nearly $8,000 for congestive
heart failure and nearly $4,000 for hypertension and diabetes.  The
study found that increased pharmacy spending for adherence produced
average benefit-cost ratios as high as 10:1 for these diseases.
The recent studies add to a growing body of research demonstrating
that the effective use of medicines can reduce spending on other
medical services, particularly in Medicare:
The Congressional Budget Office has found that a 1 percent increase in
the number of prescriptions filled would lead to a 0.20 percent
decrease in overall medical spending among the Medicare population.
And a 2011 study of Medicare Part D, published in the Journal of the
American Medical Association, found that older Americans who
previously lacked comprehensive drug coverage saved about $1,200 in
medical costs the year they signed up for the program.
The good news from the IMS report is that we’re making progress on
adherence among patients with chronic conditions in the U.S.  And the
report highlights six innovative and effective programs – in the
public, private, and non-profit sectors – to promote appropriate use
of medicines.
IMS also points out that the growing availability of generic medicines
has helped increase adherence.  According to IMS, the rate of generic
utilization in the U.S. – 84 percent – is higher than in any other
country.  But it’s important to note that these generics are the
legacy of huge investments to find and develop new innovative
medicines in the first place.  And the research on adherence points to
the urgency of developing more new medicines to address needs that are
not met by therapies currently available.
For example, Alzheimer’s disease is expected to cost the United States
more than $200 billion this year. Yet you don’t find AD in the studies
of potential savings from increased adherence … because there is as
yet no medicine available to slow or stop the progression of this
disease.  But what if there were?
The adherence gap for diabetes also highlights the need for new
medicines that are easier to take and better help patients manage
their condition.
The stubborn problem of nonadherence makes it clear that medicines are
not enough.  Our health care system – including the companies that
make medicines – must find new ways to help patients maintain their
course of therapy.  As part of those efforts, the pharmaceutical
industry is committed to helping ensure that all U.S. citizens are
able to access the medicines they need.
But the research on adherence also makes crystal clear the value of
medicines in holding down health care costs for everyone – when
they’re properly used.  It’s further evidence that medicines – far
from being the problem – are a big part of the solution.


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