Pharmaceutical consultancy is emerging as a way for manufacturers to manage the increasing pressures of rising costs, heavier regulatory compliance, and stiffer competition. Although a relatively new area of expertise, pharmaceutical consultants are proving to be a valuable asset to both pharmaceutical manufacturers facing rising costs of R&D, production, and distribution, as well specialized healthcare services trying to control their own rising costs. Everyone is finding themselves in the position of having to do more with less, and a little expert help along the way can be a valuable resource.
Consider the decline in funding growth for biomedical research. Annual funding for research increased from $75.5 billion to $101.1 billion from 2003 to 2007, an annual growth rate of 3.4% after adjusting for inflation. In 2008, however, funding dropped to an estimated $88.8 billion. This could easily be interpreted as a major hurdle for continued progress in research and innovation, or it could be viewed as a great opportunity for pharmaceutical companies and those in life sciences consulting to enter into a beneficial partnership.
Pharmaceutical consulting firms, in general, offer a broad range of services. These services include, among others, identifying core activities, finding areas for effective cost cutting, conducting quality analyses, building relationships with vendors, conducting negotiations, creating medication-management solutions, managing outpatient prescription benefits, and managing inpatient medications, as well as managing related costs such as those connected with radiology. Many consulting firms do specialize, though, and the area of specialty usually falls at one end of the services spectrum or the other – for instance, either the R&D/manufacturing/distribution end or the patient/healthcare-facility/healthcare-provider end.
For example, one of the specialized offerings of some pharmaceutical consultants is specialty drug management. Specialty medications are administered by physicians in outpatient settings, and they constitute one the largest of the “hidden” costs in medicine today. The rate of spending on specialty drugs rose from 12.4% in 2007 to 15.8% in 2008. Because the cost of the medication is frequently “hidden” in the claim, payers find it difficult to determine exactly what they are paying for. Pharmaceutical consultants can be a valuable asset in cutting costs by conducting specialty drug management audits to identify the “hidden” medical pharmacy costs, and then determine areas where costs can be reduced through effective negotiations and implementing innovative strategies.
Although a growing number of healthcare providers are utilizing integrated billing systems, some segments of the billing process are still unmanaged, and cost-savings opportunities are overlooked. What a consulting firm can do here is to analyze the health plan claims process a company has in place. After conducting a thorough analysis of the claims process, the firm will then be armed with the information they need to suggest and assist in implementing changes in the process that will result in improved efficiency and noticeable cost savings. A consulting firm can also discover practicable ways to automate, or even outsource, portions of the billing process.
Pharmaceutical consulting, although relatively new, is proving to be just what the doctor ordered along the entire spectrum of companies involved in the pharmaceutical industry.