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Pharmaceutical Technology Assessment for Managed Care: Current Practice and Suggestions for Improvement
RAND CORP SANTA MONICA CA
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Increasingly powerful pharmaceuticals are of increasing clinical and economic importance to managed care organizations. Expenditures on pharmaceuticals have also been increasing, a trend driven by a number of factors, including the accelerating development of more-innovative and more- expensive agents rising pharmaceutical prices and higher utilization due to the aging of the population, direct-to-consumer advertising, and other factors. More often today, health plans and provider organizations are responsible for managing and paying for these cost increases, which creates an incentive for them to go beyond a focus on clinical effectiveness and safety to evaluate the cost-effectiveness of new drugs. In addition, the development of drug formularies and the current focus on best practices require that each new drug be assessed relative to available alternatives. The formal controls and guidelines resulting from managed care processes can increase quality and cost efficiency, but can also be a barrier to desirable innovations. Together, these developments have caused managed care organizations to realize that making good decisions on new pharmaceuticals is to their immediate financial and clinical benefit. Accordingly, many have expressed interest in improving their ability to evaluate new pharmaceuticals.
APPROVED FOR PUBLIC RELEASE