The Pharmaceutical Revenue Opportunity from Medication Adherence
Two recent studies conducted in 2018, one by Credit Suisse and the other by HealthPrize Technologies and CEEK Enterprises, found that improved medication adherence has the potential to be one of the pharmaceutical industry’s most important growth drivers.
Partial List of Percentage Revenue Increases from Higher Adherence
Credit Suisse senior pharmaceutical research analyst Vamil Divan, M.D. and colleagues noted that “relatively modest increases in adherence could meaningfully increase … sales and earnings going forward, with the DCF valuations for some of our companies increasing by as much as 20 percent, depending on the product portfolio at a given company.”
“A dollar in revenue from increased drug utilization represents one of the highest-margin dollars the pharmaceutical industry can generate.”
Pharmaceutical companies that take a strategic, enterprise approach to patient support with a focus on medication adherence are uniquely positioned to grow revenue and increase earnings per share (EPS), all while improving outcomes and reducing the overall cost of healthcare.
Adherence’s ability to address the pharmaceutical triple aim is particularly important as the industry faces pressure to justify drug pricing with health outcomes data. And in today’s highly charged political environment, adherence programs become a powerful and non-controversial tool to drive business growth.
Full list of companies analyzed:
Bristol Myers Squibb
Johnson & Johnson