Quantifying The Economic Burden Of Drug Utilization Management On Payers, Manufacturers, Physicians, And Patients

The continuing launch of innovative but high-price drugs has intensified efforts by payers to manage use and spending and by pharmaceutical manufacturers to support patient access and sales. Payers are restricting drug formularies, requiring more stringent prior authorizations, and raising patient c...

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Bibliographic Details
Published in:Health affairs (Millwood, Va.) Va.), 2021-08, Vol.40 (8), p.1206-17
Main Authors: Howell, Scott, Yin, Perry T, Robinson, James C
Format: Article
Language:English
Subjects:
Access
Administrative expenses
Capitation
Charitable foundations
Consumer Price Index
Cost sharing
Costs
Drug formularies
Drug prices
Estimates
Expenditures
FDA approval
Financial support
Management
Patients
Pharmaceutical industry
Pharmaceuticals
Pharmacy
Philanthropy
Physicians
Prescription drugs
Prices
Sales
Utilization
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Summary:The continuing launch of innovative but high-price drugs has intensified efforts by payers to manage use and spending and by pharmaceutical manufacturers to support patient access and sales. Payers are restricting drug formularies, requiring more stringent prior authorizations, and raising patient cost-sharing requirements. Manufacturers are investing in programs that help patients and physician practices navigate administrative controls and help patients meet sharing Based on a compilation and analysis of the existing peer-reviewed and professional literature, this article estimates that payers, manufacturers, physicians, and patients together incur approximately $93.3 billion in costs annually on implementing, contesting, and navigating utilization management. Payers spend approximately $6.0 billion annually administering drug utilization management, and manufacturers spend approximately $24.8 billion supporting patient access in response. Physicians devote approximately $26.7 billion in time spent navigating utilization management, whereas patients spend approximately $35.8 billion annually in drug cost sharing, even after taking advantage of manufacturer and philanthropic sources of financial support. All stakeholders in the US pharmaceutical system would benefit from a deescalation of utilization management, combining lower drug prices with lower barriers to patient access.
ISSN:0278-2715
1544-5208
DOI:10.1377/hlthaff.2021.00036