The U.S. pharmaceutical industry loses an estimated $188 billion a year from nonadherence to medications for chronic disease, according to a study by Capgemini Consulting.


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Study: Nonadherence costs pharma industry billions in revenue

November 26th, 2012

NORWALK, Conn. – The U.S. pharmaceutical industry loses an estimated $188 billion a year from nonadherence to medications for chronic disease, according to a study by Capgemini Consulting.

The consultancy said Monday that extrapolated to the global pharmaceutical industry, the sector's revenue losses swell to an estimated $564 billion.

Capgemini's study, titled "Estimated Annual Pharmaceutical Revenue Loss Due to Medication Non-Adherence" and conducted with HealthPrize Technologies, also noted that the worldwide figure is much higher than the $30 billion global revenue loss often quoted to date from a 2004 Datamonitor study and is higher than many pharmaceutical executive estimates.

According to the study, the revenue loss accounts for 59% of all pharmaceutical revenues, which totaled $320 billion in the United States and $956 billion globally in 2011 (based on IMS Health data), and 37% of potential total annual revenue, which would be $508 billion in the United States and $1.52 trillion globally.

Although achieving 100% medication adherence isn't likely, even a 10-percentage-point gain in adherence could spur pharmaceutical revenue, along with improved health outcomes and lower health care spending, the report indicated.

In the U.S. diabetes market alone, the revenue loss is estimated at $11.4 billion.

"The revenue that pharma leaves on the table due to lack of adherence to prescription medications is much higher than usually thought," stated Thomas Forissier, principal at Capgemini Consulting. "In addition, many people don't realize that a 10% boost in adherence could increase revenue by much more than 10%. That 10% loss is based on the higher revenue amount that could have materialized, not on actual revenue earned."

In addition, the study underscored that medication nonadherence is a problem across almost all chronic conditions, not only for primary care conditions such as diabetes, hypertension and high cholesterol but also for such serious conditions as HIV, oncology, transplants and glaucoma.

"Medication nonadherence is one of the most serious problems in healthcare, posing a heavy financial impact on all constituencies," commented Katrina Firlik, M.D., co-founder and chief medical officer of HealthPrize. "For insurers, employers and patients, nonadherence significantly increases health care costs as a result of disease-related complications. For pharmaceutical companies, pharmacies and pharmacy benefits managers, nonadherence significantly erodes profit due to prescriptions never filled and medications not taken often enough. Given the significant potential to enhance revenue and lower cost to the overall health care system, programs to address medication adherence should be a top priority to the pharmaceutical industry."

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