HCA 302 Module 5 Lecture Notes The Pharmaceutical Industry and Health Care Workforce

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1 HCA 302 Module 5 Lecture Notes The Pharmaceutical Industry and Health Care Workforce Why are pharmaceuticals important? The Pharmaceutical Industry has influence, in part because it represents 10% of the health care market in the U.S., but also because of its many advances over the last several decades. The pharmaceutical industry is important because it is a major source of medical innovation. The U.S. research-based industry invests about 17% of sales in research and development, and R & D drives performance of individual firms and industry structure. Today, many health problems are prevented, cured, or managed effectively for years through the use of prescription drugs. In some cases, the use of prescription medicines keeps people from needing other expensive health care such as being hospitalized or having surgery. Finally, 90% of seniors and 58% of non-elderly adults rely on a prescription medicine on a regular basis. Market Size The global pharmaceutical market in 2010 grew 8.3% with sales at $875 billion USD, internationally. Currently, the global pharmaceutical market is dominated by the U.S., which accounts for about 28 percent of global sales in 2009 followed by the EU accounting for roughly 15 percent and Japan accounting for 12 percent. Together, these three regions represent nearly 55 percent of the global market. Insurance companies continue to aim for limiting drug expenditure in 2012 and beyond. They limit their insurance plan drug formularies to select drugs and generic drugs to control costs. Global pharmaceutical market sales are expected to grow at 5-8 percent through 2014 and are expected to reach over $1.1 trillion is sales by Source: Kaiser Family Foundation, (2010)

2 Safety Stages of Drug Research Let s take a brief look at the safety stages of drug research. First, during the preclinical assessment, the relative safety of newly-synthesized compounds is initially evaluated in both in vitro (live animals) and in vivo (lab) tests. If a compound appears to have important biological activity and may be useful as a drug, special tests are conducted to evaluate safety in the major organ systems (e.g., central nervous system, cardiovascular, and respiratory systems). Other organ systems are evaluated when potential problems appear. These pharmacology studies are conducted in animals to ensure that a drug is safe enough to be tested in humans. An important goal of these preclinical animal studies is to characterize any relationship between increased doses of the drug and toxic effects in the animals. Development of a drug is usually halted when tests suggest that it poses a significant risk for humans especially organ damage, genetic defects, birth defects, or cancer. Next, is the pre-approval assessment in humans. A drug sponsor may begin clinical studies in humans once the FDA is satisfied that the preclinical animal data do not show an unacceptable safety risk to humans. It takes a few too many years for a clinical development program to gather sufficient data to prepare a new drug a seeking FDA regulatory review to market a new drug. Next, during the FDA review, a sponsor submits an NDA to the FDA for approval to manufacture, distribute, and market a drug in the U.S. based on the safety and efficacy data obtained during the clinical trials. In addition to written reports of each individual study included in the NDA, an application must contain an integrated summary of all available information received from any source concerning the safety and efficacy of the drug. Once a drug has been approved and marketed, post-marketing surveillance occurs. Monitoring and evaluating a drug's safety becomes more complex at this point, because once on the

3 market, a drug will be taken by many more patients than in the clinical trials and physicians are free to use it in different doses, different dosing regimens, different patient populations, and in other ways that they believe will benefit patients. Similarly, they must report all adverse effects caused by the drug. The Health Care Workforce The leader of the health care team in most settings is the physician. Physicians in the U.S. are trained via two schools of approach: allopathic or medical doctor (MD) and osteopathic, doctor of osteopathy (DO). The allopathic approach focuses on providing treatment for a disease or condition, such as giving an antibiotic to treat an infection; the antibiotic treats the underlying cause of the infection so that the patient can get well. The osteopathic approach is considered more holistic, focusing on the body s ability to help heal itself. Osteopaths practice spinal and body manipulation, because they believe that when the musculoskeletal system is in functional alignment, supported by healthy environment, and proper nutrition, the body will be in a state of health. In practice, most osteopathic physicians still use drugs and other therapies to treat patient conditions in a similar way as allopaths; they simply have a more holistic approach. Mid-Level Providers Mid-level practitioners (or physician extenders), such as physician s assistants and nurse practitioners, form a category of health care providers seeing increased use. The term mid-level connotes more education, a higher level of responsibility, and more autonomy than entry level clinicians, but less than the physician. Physician s assistants (PAs) are caregivers who work with a physician who is responsible for supervising their practice. PAs are governed by a state s medical practice act and can only perform procedures under the supervision of a physician at the level stipulated by law. In some states, PAs can write prescriptions acting under physician supervision. PA specialized education is from 2-3 years in length with most graduates earning a bachelor s degree, some a master s. The nurse practitioner (NP) has additional clinical training and experience providing care beyond the traditional role of nursing. Their role can include obtaining patients health histories, developing and managing a plan of care. NPs perform physical exams and can perform some procedures, governed by a state s nursing practice act. Prescription authority is given in some states. NPs are prepared to function independently of physicians, but do consult the physician for assistance when their patients needs go beyond the NPs expertise. Most nurse practitioners receive additional training within a bachelor s degree program and then go on to complete the nurse practitioner program to earn a master s degree. These mid-level roles are designed to extend the role of the primary care or specialty physician, freeing the physician to spend more time with patients having more complex care needs or to cover additional needs in an underserved area.

4 Reimbursement for extender services is evolving. While not all government and private insurers will reimburse for these services, this is expected to continue to grow with the growth of managed care and the pressure to contain costs. While some physicians welcome extenders, in areas where there is an oversupply of physicians, extenders can be viewed as competition. Nurses make up the largest number of health care providers. Hospitals remain the largest employer of nurses, though the numbers are changing as more care moves to outpatient settings. Nurses provide for the physical care of patients, especially in hospitals and also in longterm care settings. In addition, nurses assess patients level of health, and how they are adjusting to the illness or condition they are experiencing and any treatment prescribed. They teach and counsel patients, helping them understand and adjust to their conditions. Here are a few facts about nurses (as of 2010) obtained from the U.S. Department of Labor: Largest health care occupation, with employment of over 2.4 million jobs Women comprised 92.1% of RNs RNs will increase by 27.3% between 2002 and 2012 from 2,284,000 to 2,908,000 U.S. Department of Labor, Women s Bureau (2010). Quick facts on registered nurses. Retrieved from A nurse s practice is governed by the individual state s nursing practice acts. To prepare to practice nursing, education can take three pathways: an associate (2-year) degree, a decreasing number of diploma degree (3-year) programs offered in conjunction with hospitals, or through a baccalaureate (4-year) degree. In addition, both master s degree and doctoral level programs in nursing are available for those who want to specialize in areas such as teaching, administration, or research. The profession has traditionally attracted primarily females, although recently, there has been some growth in numbers of male nurses. As career options for women have increased, the number of women entering nursing has declined. The current and projected future shortage of nurses is reaching an unprecedented level. A study by Deloitte and Touché predicted that in the year 2020, only half of the nurses needed to care for the nation s aged population will be available. The average age of the practicing nurse, according to the American Association of Colleges in Nursing (AACN), is Given the trends and predictions, there are serious times ahead in dealing with the nursing supply shortages. Factors in the Nursing Shortage The U.S. population and labor force is aging. There are fewer potential workers coming behind the aging baby boomer generation. Careers in staff nursing are seen as less attractive to those entering employment. Many nurses have gone into administrative roles. Many nurses are now hitting retirement age, or have retired. There are shortages of nursing schools and nurse educators, which impact how many nurses may be produced per year.

5 The Pharmaceutical Industry and Health Care Workforce The pharmaceutical business is now 10% or more of all medical service spending and is growing. Part of the equation of pharmaceutical research and development is that it has overhead. It may cost millions of dollars in R & D, clinical trials, and the FDA approval process in order to get a drug to market. Once it goes to market, the company must report all benefits and adverse reactions to the FDA. The FDA process of approval is labor intensive. It must be that way, since their mission is to protect the consumer. Besides drugs, the FDA also is responsible for approval of all food items, cosmetics, and medical devices. It is important for any health care administrator that works in health care services to understand how the FDA functions and the laws regulating controlled substances under the Controlled Substances Act of Under this act, physicians, hospitals, manufacturers, pharmacists and any other person who may dispense, prescribe or administer a controlled substance must obtain from the Drug Enforcement Agency (DEA) an approval number. The health care workforce is in dire need of medical personnel. The demand for quality health care services is only going to increase as the baby boomers continue to age, increasing the need for more health care services. Shortages of health care providers will continue, due in part to the amount of time it takes to train a medical provider, but also due to the lack of medical educators, which limits the number of students that may be produced per year. Many nurses, dissatisfied with their role, are transitioning to more administrative roles. Many nurses who are retiring are not being replaced. All of these things have made health care a challenge for our federal and state governments, who seek solutions in health care reform.

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