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

Area of Science:

• Health Economics
• Pharmaceutical Policy
• Healthcare Management

Background:

• The launch of high-cost drugs prompts payers to manage spending and manufacturers to support patient access.
• Payers implement formulary restrictions, prior authorizations, and increased patient cost-sharing.
• Manufacturers develop programs to assist patients and physicians with administrative hurdles and cost obligations.

Purpose of the Study:

• To estimate the total annual costs associated with utilization management in the US pharmaceutical system.
• To quantify the financial burden on payers, manufacturers, physicians, and patients.
• To explore the benefits of deescalating utilization management.

Main Methods:

• Compilation and analysis of existing peer-reviewed and professional literature.
• Estimation of annual costs incurred by different stakeholders.
• Assessment of costs related to implementing, contesting, and navigating utilization management.

Main Results:

• The total annual cost of utilization management is approximately $93.3 billion.
• Payers spend $6.0 billion on administration; manufacturers spend $24.8 billion on patient support.
• Physicians incur $26.7 billion in time costs, and patients face $35.8 billion in cost-sharing.

Conclusions:

• Utilization management imposes substantial financial burdens across the pharmaceutical system.
• Deescalating utilization management, coupled with lower drug prices, can benefit all stakeholders.
• Reducing barriers to patient access is crucial for a more efficient system.