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Health Exchanges Drive Change In MCO Strategies And Physician Prescribing Decisions; Impact On Pharma Mixed
Date:7/31/2014

BURLINGTON, Mass., July 31, 2014 /PRNewswire/ -- Decision Resources Group's experts are scoping healthcare funding changes brought about by the Affordable Care Act (ACA), which has affected both reimbursement and prescribing of pharmaceutical therapies. The ACA altered how Managed Care Organizations (MCOs) cover beneficiaries through new regulations and expanded access via government-supported programs. Dynamic change is occurring in the health exchanges—state-based marketplaces set up by states or the federal government that allow individuals to shop for subsidized coverage—where benefit design and physician behavior result in an altered prescribing environment. A new Executive Briefing examines the key trends driven by the launch of health insurance exchanges and how they will impact the pharmaceutical industry over the next few years.

Key Facts

  • Decision Resources Group's newest Executive Briefing, entitled Health Exchanges: What This New Channel Unlocks for Branded Agents, highlights the motivations of MCOs operating in the health insurance exchanges and outlines how their decisions affect prescribing and uptake.
    • MCOs are increasingly participating in the exchanges. Some MCOs that sat out 2014, such as UnitedHealthcare, indicated they may be entering the market for 2015.
    • MCOs are leveraging narrow networks. In a survey of 40 MCO pharmacy and medical directors that employ narrow networks, 65 percent cited the desire to reduce drug costs and 58 percent pointed to reducing medical costs as the key drivers.
    • At least in the exchanges, the era of open formularies appears to be closing. In a recent survey of 44 MCOs that offer products on the exchange, fewer than half offered an open formulary—choosing instead either a closed, or partially closed, formulary.
    • MCOs are placing higher out-of-pocket costs on exchange-based plans. Individuals covered by exchange-based plans are likely facing a deductible of at least $1,500. Surveyed plans with a deductible reported deductibles ranging from $1,600 to nearly $2,000 for an individual based on the value of the plan.
    • Physicians will react to higher cost shares by prescribing lower cost drugs, hurting branded agents. With electronic health records systems and e-prescribing, physicians understand patient formularies better than before.
  • To download the Executive Briefing, click here.

Quote

  • Roy Moore, Principal Director at Decision Resources Group, comments: "Health insurance exchanges represent the biggest opportunity for the drug industry since the launch of Part D a decade ago, but this new market is not without challenges. Health plans' desire to control cost and utilization has resulted in new hurdles to access, which ultimately affect the actual drug prescribed. Drug firms must understand the intricacies of specific exchange-based plans to devise successful strategies that will work in this new channel."

About Physician & Payer Forum: Understand Healthcare Reform's Impact by Therapy

Decision Resources Group conducts primary research with physicians, MCO pharmacy directors and MCO medical directors—and leverages expert analysis—to find unique insights.

2014 coverage includes the following titles:

Find out more about Physician & Payer Forum here.

About Decision Resources Group

Decision Resources Group offers best-in-class, high-value information and insights on critical issues within the healthcare industry. Clients rely on this analysis and data to make informed decisions. Find out more at www.DecisionResourcesGroup.com.

All company, brand or product names contained in this document may be trademarks or registered trademarks of their respective holders.

For more information, contact:
Chris Comfort
Decision Resources Group
781-993-2597
ccomfort@dresourcesgroup.com

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