Adherence to the Bottom Line
GlaxoSmithKline CEO Andrew Witty heralded “the successful delivery of our diversification strategy” as the path to more sustainable earnings growth when he announced the company’s 2010 first quarter results in April.
It was a theme picked up on by business media around the world. Bloomberg reported GSK’s sales in emerging markets were up by 50 percent, driven by acquisitions and alliances, as well as aggressive pricing aimed at sacrificing margins in order to increase total revenue.
And, in an article entitled Big pharma aims for re-invention, Financial Times reporter Andrew Jack cited Witty’s remarks as giving a sense of how both GSK and the industry as a whole were “responding to structural pressures: diversify to survive.”
Buried at the bottom of Jack’s article was a clear pointer to the potential role improving adherence has to play in ensuring the future financial health of the pharmaceutical industry.
First, Jack noted recent deals linking prices to the performance of the drugs concerned that had been negotiated in Europe and North America by Novartis, Sanofi-Aventis and Merck. To this list could be added the British National Institute for Health and Clinical Excellence’s recent change of heart on recommending Cimzia following UCB's decision to offer the drug for free during each patient's first 12 weeks of treatment, and charge only if patients respond to that first 12 weeks' worth.
He then went on to write that “Others [pharmaceutical companies] are forging partnerships with doctors, nurses, and other specialists to encourage better compliance among patients for whom their medicines do work, but are often not taken as prescribed.”
The link between the two sentences is clear.
If pharmaceutical companies are to have their remuneration so directly linked to the success of the treatments they are marketing, they will have a correspondingly strong interest in ensuring that success. Adherence to treatment is suddenly of tremendous importance to their bottom lines.
The benefit to population health of adherence to treatment is well-established. In a 2001 article for the Cochrane Database of Systematic Reviews, RB Haynes stated that “Increasing the effectiveness of adherence interventions may have a far greater impact on the health of the population than any improvement in specific medical treatments”.
For CEOs such as Andrew Witty - operating in a world where health costs are an ever-increasing part of government spending and cost-effectiveness is as important as medical efficacy - increasing the effectiveness of adherence interventions may have an equally significant impact on the health of their companies, and of their industry as a whole.
