White Paper

A Look At Exchanges And What They Mean For Pharma

Source: Health IT Outcomes

The advent of health insurance exchanges this fall is unlikely to be as significant for the pharmaceutical industry as for other parts of the healthcare sector, such as insurers and hospitals. There will be modest financial gain for drugmakers from previously uninsured individuals receiving subsidized coverage through exchanges. Any potential gain driven by new sales will likely be offset by new rebates and discounts the industry must pay under the Affordable Care Act (ACA). However, the impact will vary by company based on its product portfolio and how each state marketplace operates. Drugmakers need a detailed state-by-state analysis to fully understand the impact of the new exchanges on their bottom line.

How will the new health insurance exchanges impact pharmaceutical companies financially?

The impact of exchanges on drugmakers will depend on a number of factors that will evolve over time, such as:

  • The number of plans participating in each exchange
  • What kind of drug coverage is provided under each plan, including how preferred drug lists known as formularies and cost-sharing requirements are structured
  • The value of rebates or discounts that drug companies negotiate with each plan
  • The number of people enrolled in a given plan, their health status, and drug utilization
  • The types of drugs a pharmaceutical company offers

Drugmakers need to conduct a thorough assessment to understand the new landscape—and where opportunities or threats may exist. Companies should continue to monitor exchanges as enrollment grows and the number and design of participating health plans evolve.

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