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Finally, a Memorandum of Understanding was signed in 1994 that allows U.S. manufactured products to gain certification in Russia based on their market approval by the FDA. This should speed up product registration in Russia. |
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B. Market Forces Behind Health Economic Issues |
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There is a trend in healthcare toward total drug therapy management and integration of medical data on therapeutic outcomes. There is an increased demand for performance guarantees and an increased role for the pharmacist in disease management. Price regulators care very little whether the price set is sufficient either to provide a reasonable return on past company investment in R & D or to sustain an ongoing research program. |
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Last year was the first year that more than half of all prescriptions were paid by third-party payers, instead of out of pocket by patients. Managed care programs now influence about 80% of the market and therefore, play a critical role in addressing prescription cost containment. |
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Managed care plans negotiate price rebates from manufacturers in exchange for inclusion of their products on the formulary. The growth of managed care and its tendency toward therapeutic equivalence and therapeutic substitution have resulted in fewer new drugs reaching over $100 million in sales. Unfortunately, managed care and other drug insurance programs have sometimes adopted across-the-board controls on utilization where cost-containment stipulations do more to distort than support therapeutic considerations [14]. Patients are switched from one product to another simply because the Health Maintenance Organization (HMO) may obtain a better price from another company [71]. |
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The risk that the corporate negligence doctrine will apply to managed care entities creates a duty on these entities to perform the proper investigation for data to support selection or exclusion of pharmaceuticals on their formularies. Under the theory of liability for utilization management, or Wickline liability as it is commonly called, managed care organizations may face liability for injury resulting from adverse consequences of drugs on the formulary, even if they were carefully selected and monitored. The Wickline case highlights the issues that can arise when a third-party payor imposes utilization and monetary controls [72]. Denial of payment may constitute a denial of the use and medical benefit of a nonformulary drug [73]. |
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Pharmacy benefit management companies (PBMs) have exerted intense scrutiny over the cost of a patient's pharmaceutical care and are becoming more involved with managing outcomes. One PBM executive recently described a scenario of risk sharing with manufacturer's warranting their prod- |
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