Chapter 3 - Pharma Customers

DAW stands for "dispense as written." This term is commonly used in the medical field to indicate that a prescription medication should be filled exactly as it is written by the prescribing healthcare professional, without any substitutions or changes.

Direct-to-consumer advertising refers to the practice of pharmaceutical companies using consumer advertising techniques to reach their customer base. This means that instead of solely targeting healthcare professionals, such as physicians, these companies directly promote their products to the general public through various advertising channels. The aim is to raise awareness about specific medications, their benefits, and potential side effects, ultimately influencing consumers to request these products from their healthcare providers. This approach allows pharmaceutical companies to establish a direct line of communication with consumers and potentially increase sales.

The government is considered a unique customer group because it serves special populations and receives favorable pricing. This means that the government can negotiate lower prices for pharmaceutical products, allowing them to provide affordable healthcare to specific groups of people. This special treatment sets the government apart from other customer groups who may not have the same advantages in terms of pricing and access to healthcare.

A Pharmacy Benefit Manager (PBM) is an organization that handles the administration of pharmacy benefits on behalf of healthcare payers. PBMs work with insurance companies, employers, and government agencies to negotiate drug prices, manage formularies, process prescription claims, and provide other services related to pharmacy benefits. They aim to control costs, improve medication adherence, and ensure the safe and effective use of medications. PBMs play a crucial role in the healthcare system by facilitating access to affordable and high-quality prescription drugs for patients.

A written prescription does not include the condition that the drug is supposed to treat. A prescription typically includes information such as the prescribers and patients identities, the product strength and form, and the dispensing instructions. However, the specific medical condition for which the drug is being prescribed is not typically listed on the prescription. This information is usually discussed between the prescriber and the patient during the consultation or visit.

Open formularies provide reimbursement for products that are not on the formulary. This means that even if a medication or product is not listed on the formulary, individuals can still receive reimbursement for it. Open formularies typically offer more flexibility and options for patients, allowing them to access a wider range of medications and treatments.

The main difference between a retail pharmacy and a hospital pharmacy is the customer base. Retail pharmacies accept any valid prescription and cater to a wide range of customers, whereas hospital pharmacies primarily dispense prescriptions to patients being treated within the hospital. This difference in customer base is due to the different roles and functions of these two types of pharmacies within the healthcare system.

Pharmacy and pharmacist licenses are not federally-controlled. Instead, they are regulated at the state level. Each state has its own licensing requirements and regulations for pharmacies and pharmacists, which can vary from state to state. This lack of federal control allows states to tailor their licensing requirements to meet their specific needs and regulations. Therefore, there is no consistency in pharmacy and pharmacist licenses from state to state.

Field Sales, Managed Markets, and Marketing are the three departments of a pharma company that develop strategies to influence the demand of a product. Field Sales is responsible for promoting and selling the product directly to healthcare professionals and customers. Managed Markets focuses on negotiating contracts and pricing with payers and insurance companies to ensure access to the product. Marketing department develops and implements marketing strategies to create awareness, generate demand, and position the product in the market. These three departments work together to drive sales and increase the demand for the company's products.

Pharmacists are sometimes allowed to modify prescriptions because they have the expertise and knowledge to make appropriate changes in certain situations. This could include adjusting the dosage, substituting a generic medication for a brand name, or changing the form of the medication. However, it is important to note that pharmacists must adhere to legal and professional guidelines when making modifications to ensure patient safety and proper treatment.

Pharmacists typically do not have significant influence on drug selection. While they play an important role in dispensing medications and providing information about them, the ultimate decision on drug selection is usually made by the prescribing healthcare provider. Pharmacists may offer recommendations or suggestions based on their expertise, but the final decision rests with the prescriber.

The demand drivers for a pharmaceutical product are the customer groups that influence the demand for the product. In the case of pharmaceutical products, the three customer groups that make up the demand drivers are Authorized Healthcare Professionals/Physicians, Consumers, and Payers. Authorized Healthcare Professionals/Physicians prescribe and recommend the use of pharmaceutical products to their patients, which drives the demand. Consumers, who are the patients themselves, directly influence the demand by seeking and using pharmaceutical products. Payers, such as insurance companies or government healthcare programs, also play a significant role in driving the demand as they cover the cost of the pharmaceutical products.

Adherence refers to the act of following or sticking to something, such as rules, guidelines, or a prescribed course of action. Persistence refers to the ability to continue doing something despite difficulties or obstacles. Compliance, on the other hand, refers to the act of obeying or conforming to a rule or regulation. Therefore, the principles that make up "adherence" are persistence, which involves continued effort, and compliance, which involves following rules or regulations.

The term "payer" refers to the broad array of customers that collectively control reimbursement for drug use. This includes insurance companies, government agencies, and other entities that pay for the cost of medications on behalf of the individual consumer. These payers have the authority to determine which drugs are covered, set pricing and reimbursement rates, and establish policies and guidelines for drug utilization.

The FDA controls how products are promoted to prescribers and consumer advertising. This means they have regulations in place to ensure that pharmaceutical companies are not making false or misleading claims when promoting their products to doctors and consumers. The FDA aims to protect the public by ensuring that the information provided about medications is accurate and unbiased.

A KOL (key opinion leader) is a select group of physicians who held a leadership role in a clinical trial and can influence the adoption of novel products. They are considered experts in their field and have the ability to shape the opinions and decisions of other healthcare professionals regarding the use of new products. Their involvement in clinical trials gives them credibility and influence over the medical community, making them key players in the adoption of innovative treatments and therapies.

Promotional tools and clinical evidence for a pharma product typically do not include a detailed list of the adverse effects of the product. This is because promotional materials are designed to highlight the benefits and positive aspects of the product, rather than focusing on potential negative effects. Including a detailed list of adverse effects may discourage potential customers from using the product. However, it is important for healthcare professionals and patients to have access to this information, which is typically provided in the product's package insert or prescribing information.

Approximately 30% of all drugs prescribed in the U.S. are initiated by consumer request. This suggests that a significant portion of medication prescriptions are a result of patients specifically asking their healthcare providers for certain drugs. This could be due to various reasons such as patients seeking specific medications they have heard about or seen advertised, or patients requesting medication for perceived symptoms or conditions. This statistic highlights the influence of consumer demand on the prescribing practices in the U.S. healthcare system.

Wholesalers in the pharma industry do play a role in assuming risk and responsibility for product supply, managing receivables and credit risk, specializing in distributing pharmaceutical products to pharmacies, hospitals, and clinics, and enforcing regulatory requirements for product handling and distribution. However, they do not play a role in selling their products in bulk at a cost-effective price. This role is typically performed by manufacturers or other intermediaries in the supply chain.

Companies work with each customer group to drive demand for their products by focusing on differentiating their product from others in the market and increasing awareness of a certain disease and its available therapies. This approach allows companies to highlight the unique features and benefits of their product, making it more attractive to customers. Additionally, by creating awareness about a specific disease and its available therapies, companies can position their product as a solution, thereby driving demand. This strategy combines product differentiation and disease awareness to effectively generate demand for the company's products.

Pharmaceutical companies often employ the strategy of offering concessionary pricing or rebates to ensure a position in the formulary. By providing discounts or lower prices for their drugs, these companies can incentivize healthcare providers or insurance companies to include their products in the formulary. This strategy helps the pharmaceutical companies gain market share and increase the accessibility of their drugs to patients.

Pharmacy benefit managers (PBMs) are not relied upon heavily by physicians to stay updated on developments in pharmaceutical therapy. PBMs primarily focus on managing prescription drug programs for health insurance plans, negotiating prices with drug manufacturers, and processing claims. While they play a role in the healthcare system, they do not provide the same level of information and education as continuing education programs, professional publications, product presentations by pharmaceutical sales reps, and journal advertising, which are more commonly used by physicians to stay informed about pharmaceutical therapy.

Manufacturing restrictions are not a utilization control used by payers. Utilization controls are measures implemented by payers to manage and control the use of healthcare services and resources. These controls aim to ensure appropriate and cost-effective utilization of services. Examples of utilization controls include prior authorization requirements, co-pays, educational programs, and utilization "report cards." Manufacturing restrictions, on the other hand, refer to limitations or regulations placed on the production or distribution of goods, which are unrelated to healthcare utilization control.

The most important customer base for almost all prescription products is those with prescribing authority. This is because these individuals, such as doctors and other healthcare professionals, are responsible for writing prescriptions and determining which medications are appropriate for their patients. They have the power to influence the choice of prescription products and are directly involved in the decision-making process. Therefore, pharmaceutical companies and healthcare providers often target and cater to this customer base to ensure the success and widespread use of their prescription products.

Pharmaceutical companies typically divide pharmacies into classes of trade in order to establish appropriate pricing strategies and market priorities. This allows them to tailor their pricing and marketing efforts based on the specific needs and characteristics of each class. By understanding the different market segments and their preferences, pharmaceutical companies can effectively allocate their resources and maximize their sales potential.

Specialty pharmacies are not considered institutional pharmacies because they do not typically provide care within an institutional setting. Institutional pharmacies are usually found in nursing homes, hospitals, and specialty clinics, where they provide medication management services to patients within those facilities. Specialty pharmacies, on the other hand, focus on providing specialized medications and services to patients with complex medical conditions, often outside of an institutional setting. Therefore, specialty pharmacies do not fall under the category of institutional pharmacies.

Regulatory and Business Development is NOT one of the core business areas of full-service pharmaceutical companies. The other three options, Marketing and Sales, Research and Development, and Manufacturing and Operations, are all integral parts of the pharmaceutical industry. Regulatory and Business Development, on the other hand, typically involves activities such as obtaining regulatory approvals and licenses, managing legal and compliance matters, and exploring new business opportunities, which are important but not considered core functions.

General surgery is not a subcategory of "General Practitioner" because it is a separate medical specialty that focuses on surgical procedures and interventions. General practitioners, on the other hand, provide primary healthcare services, including preventive care, diagnosis, and treatment of common illnesses and injuries. While general practitioners may refer patients to general surgeons for surgical interventions, general surgery is not considered a subcategory of general practice.