Sale of Cardiology Practices to Hospitals Challenges Marketers of Branded Therapies

Hospital-Owned Practices Increase Adherence to Hospital Formulary, Which Strongly Favor Generics Over Brands, According to a New Report from Decision Resources

Sep 10, 2013, 10:30 ET from Decision Resources

BURLINGTON, Mass., Sept. 10, 2013 /PRNewswire/ -- Decision Resources, one of the world's leading research and advisory firms for pharmaceutical and healthcare issues, finds that the decision by cardiology practices to be sold to hospitals is changing which formulary physicians follow and, as a result, is influencing which therapies they prescribe. As hospitals buy up cardiology practices, these physicians are increasingly adhering to hospital formularies instead of managed care organizations' (MCOs) formularies, resulting in prescribing decisions for acute coronary syndrome (ACS) and atrial fibrillation that are different in comparison to cardiologists at independent practices who follow MCO formularies. As a result, hospital formulary decision-makers have greater power to influence prescribing and drug marketers must therefore tailor their messaging to physicians based on the practice's ownership status.

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The U.S. Physician and Payer Forum report entitled Payer Strategies and Access: Narrow Networks and Practice Ownership's Impact on Prescribing Decisions for Cardiologists – Acute Coronary Syndrome and Atrial Fibrillation finds that cardiologists are selling their practices to MCOs because of falling payer reimbursement, increasing costs and uncertainty over healthcare reform. Both MCOs and physicians report that hospital ownership is allowing for cardiologists to bill payers more because of existing reimbursement contracts between hospitals and insurers. In fact, 18 percent of cardiologists at independent practices anticipate they will be owned by a hospital in the next 12 months. However, this financial benefit to cardiologists is threatening drug marketers as hospital-owned cardiologists report greater reliance on generic therapies than branded options in treating patients with ACS and atrial fibrillation. For instance, 28 percent of cardiologists indicated they prescribe Bristol-Myer Squibb/Pfizer's Eliquis less often because of hospital ownership. Furthermore, cardiologists at hospital-owned practices will be slower to add emerging therapies such as Daiichi Sankyo's edoxaban—an oral factor Xa inhibitor that is expected to launch in 2014—to their armamentarium than cardiologists at independent practices.

"Hospital acquisition of cardiology practices has surged in recent years as physician groups seek the financial security of being part of a larger system," said Decision Resources Senior Director Roy Moore. "However, we are now seeing that this trend is changing treatment decisions, requiring the drug marketers to place more emphasis on their negotiations with hospital formulary decision-makers. We are already seeing that some branded drugs and emerging therapies are threatened by hospital ownership, so drug marketers must respond now to this trend or they risk reduced physician uptake in a rapidly growing part of the cardiology market."

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