It is no secret that the baby boomers are moving rapidly into their golden years, bringing with them the attendant rising costs to the healthcare system. As perhaps never before, the issue has captured the interest of presidential contenders for the 2004 contest for the White House, a significant indicator of the growing importance of healthcare on the quality of life in an aging America.

The pharmaceutical industry has been in the forefront of medical advances over the last 100 years, and many of its discoveries are largely responsible for this better and longer lifespan. However, age brings with it a preponderance of diseases requiring a higher consumption of medical goods and services. Simply put, the older we get, the more we use doctors and the more medicines we take. This all costs money, and payors all across the spectrum are feeling the pressure.

Your job as a pharmaceutical sales representative is critical in helping to deliver not only the medications, but information and support, to providers and their aging patients. The better you understand the demographic shift taking place and its effect on the healthcare system, the more effective you will be when you communicate with your providers, all of whom are affected by this trend.

The Demographic Shift

A tremendous demographic shift is underway. The baby boomers are already entering their golden years. The leading edge of the baby boomers, the 76 million people born between 1946 and 1964, will reach 65 in 2010. That means they are already in their late 50s, a point at which healthcare costs are more than twice as high as those for people in the 25-to-34 age bracket. So we’re not just going there, we’ve arrived. In the next 30 years, the elderly population will nearly double from 40 million today to 77 million.

This demographic shift is a tremendous market shift, as well. Older people bring with them specific chronic diseases whose incidence rises with age. For example, accidents, suicide and homicide are the leading causes of death for those 25 to 34 years old, accounting for over half of all deaths. Cancer, heart disease, diabetes, and cerebrovascular disease combined account for only about 20% of all deaths between the ages of 25 and 34. However, for those between 55 and 64, heart disease, cancer, cerebrovascular disease, and diabetes account for about 70% of deaths.

While the benefit of lifesaving drugs is demonstrable, the costs are also prohibitive both to individuals and to the payor systems absorbing them. The better you understand not only the markets for your products, but the impact that costs are having on your customers and their aging patients, the more successful you will be in helping to bring your drugs to where they are needed most.

Your Target Markets

As a pharmaceutical representative working in this environment, your ability to focus on this growing market of the elder and infirm will translate into successful sales results for you and your company. When you are talking to physicians who see these patients, it helps to be aware of who these patients are and the issues that they are facing.

For example, as we just discussed, it is more than likely the older patient has begun to show signs of one or more chronic disease, possibly either hyperlipidemia, hypertension, or even some of the depression that increases with the losses experienced in old age. While their cost of care is rising, it is also more than likely the older patient is no longer fully employed. Older workers comprised only 13% of the workforce in 2000. While some workers are expected to stay in the workforce longer, sometimes due to the need for health benefits, it is more than likely that the older patient has fewer financial resources to meet growing medical needs.

As the retiree population grows, the percent of employers offering retiree benefits is shrinking. From 1993 to 2001, the percentage of large employers offering medical coverage to pre-Medicare retirees declined from 46% to 29%. What this means is that more retirees will be depending on Medicare, and possibly even Medicaid as they become indigent, or will be depleting personal savings to purchase medications and other noncovered goods and services. So as you visit your providers, be aware the patients they are seeing are not only experiencing more chronic and debilitating diseases, they are less likely to be able to pay for treatment and medications than in the past.

Industry Challenges

The healthcare industry as a whole is faced with growing challenges to pay for care for this group of elderly. On any given day in the mainstream press, articles tells us that politicians of every stripe are struggling with how to revamp Medicare and Medicaid, how to meet hospital costs, pay for long-term care, address the physician malpractice crisis and, perhaps most high profile, how to pay for medications for senior citizens. Ideas for solutions abound, but every recommendation has its foes and the battles rage on.

You can be certain the physicians you call on are personally and professionally affected by these issues everyday. They are being squeezed between the costs of malpractice insurance, shrinking reimbursement payments for their Medicare patients and capitations on their services and referrals from health plans. They are also juggling formularies with patient demands for your name-brand drugs. Therefore, every time you present them with a strong price-value equation that can help them reduce referrals, limit the use of other goods and services and cut down on the number of return office visits, you are helping them meet the demand for your drugs while meeting their need to control costs.

As your products continue to improve, your services grow in value as well.

Note that every day:

• Newer formulations of drugs become more patient-friendly with once-daily or even weekly dosing
• Side effect profiles continue to improve
• Therapies become even more targeted to battle diseases in more specific ways

Keeping abreast of all the information about your company’s newest drugs and the benefits of the latest formulations makes you a welcome partner in healthcare because you will be able to bring even more cost-effective means of treating diseases quickly to your providers and their aging patients.

Battling Drug Costs and Your Role as a Brand-Name Advocate

The public battle over the cost of name-brand pharmaceuticals is being fought on several fronts. 
Two of the most noteworthy are the move to purchase drugs outside the U.S., particularly from Canada, and the push to bring generic formulations to market more quickly. In your role as a pharmaceutical sales representative, you can bring your company’s message to providers to help keep the brand-name, research-based business strong and the supply system at home.

As always, you will want to work within your company’s medically and legally approved language and sales format when you discuss your products with providers. You will want to reinforce any strong formulary positions for your products, and be able to advocate for your products that are third tier or NDC blocked by telling providers how they can still make your brand-name products available to their aging patients despite their disadvantaged position.

In the context of your messages, you can keep foremost in your discussions:

• The superior effectiveness and favorable side-effect profile of your products
• The reliability of the brand-name medications your company has provided over the years through dependable and safe channels such as the local chain or independent pharmacy
• The value of novel therapies your company is bringing to market

Age-Driven Long-Term Care Markets

Besides the obvious growing geriatric market for pharmaceuticals, physician services, hospital care, and diagnostics, the long-term care market also is preparing to absorb the burgeoning numbers of elderly. The 85 and older cohort, which uses the most long-term care, is the fastest growing segment of the population. Because they are most frail and need the most help with activities of daily living, such as toileting, bathing, and dressing, long-term care options will be needed in an ever-greater way.

Today, our 1.6 million skilled nursing facility beds in the U.S. serve patients who are much older and sicker than in decades past. Therefore, those elderly patients who are less acute but still frail are in other settings. Home healthcare is the fastest growing arm of long-term care. Assisted living facilities are springing up as interim semi-independent living options as people transition from their own homes and need assistance. Because the incidence of poverty rises with age, many patients in long-term care settings are funded by either Medicare for their acute medical needs, or Medicaid assistance if they are in a nursing home.

When you call on providers who have a large geriatric population, be aware that many of their patients may be in some sort of long-term care setting, which can impact the formularies for the drugs they prescribe and the way in which they are paid. Long-term care presents its own sales challenges, so it is important to be aware that both formularies and funding streams may be different for patients receiving home healthcare, those in a skilled nursing facility, and those in assisted living.

Briefly:

• Those in a skilled nursing facility may either be private pay or, more likely, Medicaid recipients affected by Medicaid formularies
• Those receiving home healthcare services are funded by Medicare and receive services for a bundled rate, including infusion and injectable drugs
• Those in assisted living facilities are usually self-pay and their medications are usually covered out-of-pocket or through any private retiree or supplemental health insurance, the same as elderly still living independently

Where the Future Lies

The aging population is your fastest growing market. You will provide the greatest service to your customers and their patients when you become familiar with their unique medical needs, the settings in which they are cared for, and the payor mechanisms that affect the goods and services they need.

In summary, be aware your providers are providing care to an aging patient who:

• May have one or more chronic diseases
• Is likely to have trouble paying for needed medications
• May eventually need long-term care
• Is more likely to be using multiple medications
• Benefits substantially from the new medications you offer
• Is likely to have some brand-name loyalty for your products

Remember, the aging patient is the ultimate beneficiary of all the information and assistance you give the physicians you call on. In turn, those physicians are able to provide your medications to help their elderly patients live longer and healthier lives.