Sixty-Five And Up: Pharma’s Fastest Growing Customer Base
By Faiz Kermani, Ph.D. and Pietro Bonacossa.
Medical and technical advances combined with changes in lifestyle have led to dramatic reductions in mortality rates over the past 50 years. According to the Organization for Economic Cooperation and Development (OECD), the life expectancy in many industrialized countries rose from around 40 years in the early 1950s to almost 62 by 1990 (1). A speech by the UK Science Minister, Lord Sainsbury, dramatically illustrated this point with the fact that a person born in the 21st century can now expect to live 30 years longer than someone born in the 19th century (2)
The increase in life expectancy coupled with a decreasing birth rate will place considerable pressure on governments and healthcare providers. For example, in Japan although its population will start to decline after 2006, the elderly population (aged 65 or above) will continue to increase up to 2050 (3). Governments are having to reassess how they allocate their healthcare spending given that on average, the over 65s require four times as much healthcare resources as younger people (4).
The challenge for the pharmaceutical industry
However, it is not only governments that will face challenges due to population ageing. Pharmaceutical companies must take account of the changes in population demographics when developing new drugs. As drug development times lie between the 10 and 12-year range, information on diseases of the elderly will need to be factored in to R&D decision-making.
Demographic and healthcare spending data confirm the importance of reaching seniors (65+) and their healthcare providers with effective marketing. The ageing marketplace still remains a tremendous growth opportunity for an industry seeking to offset losses from lagging late-stage product pipelines. For example, in the US, coronary heart disease accounts for 70-80% of deaths in men and women in adults over 65, and congestive heart failure (CHF), is the most common cause of hospitalization for the elderly (5).
Industry figures regarding drug pipelines show that the pharmaceutical industry has reacted to demographic changes. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), in 2002, 135 biopharmaceutical companies were developing 294 new treatments for such debilitating conditions as Alzheimer’s disease, arthritis, osteoporosis, and Parkinson’s disease (6).
Yet just because there will be large populations at risk from these types of diseases does not mean that the pharmaceutical industry will face an easy time in marketing its products as pricing is becoming a contentious public issue. It has been shown that US consumer spending for prescription drugs increases with age (7). In 1999, spending by the over 65s on prescription drugs was nearly double that of the average spent by all consumers (7). However, it is worth pointing out that the same report showed that compared to other daily expenses such as housing, transportation and food, prescription drugs represented a relatively small part of total consumer household spending (7).
Nevertheless many seniors have criticized the high prices that they pay for prescription drugs and are hoping that the government will help drive down costs. In a 2002 US pre-midterm election survey carried out by Ayres, McHenry & Associates, Inc., healthcare and drug benefits were considered the most important national issue for Americans 65 and older (8).
Ageism in Healthcare?
Part of the problem lies in the fact that seniors often feel discriminated against when it comes to health care benefits. According to a recent report released by the not-for-profit Alliance for Aging Research (AAR), “older people are often excluded from tests for drugs, less likely to receive preventive care, and deprived of professionals trained in their needs” (9). For instance, people older than 65 represent the highest suicide rate in the U.S. but rarely are diagnosed as being depressed. Due to their age, they are also often discouraged from participating in clinical trials even for treatments that they could benefit from. The irony of it is that seniors are often left out of clinical trials for drugs and medical treatments aimed at their age group. They also rarely receive preventative medical screenings.
According to the AAR report – which was presented on May 19th at a hearing of the Senate’s Special Committee on Ageing – at the root of such substandard health care for seniors is the tendency of providers and patients alike to view many serious medical conditions in older people as simply a natural part of getting older. “That attitude results in providers missing out on millions of opportunities every year to prevent, treat and enhance the lives of people over 65”. (10)
Marketers must determine where seniors will use the medication, and then find out who will select the product and where it will be dispensed. Most people over 65 receiving healthcare services are located in community care settings and not in hospitals or nursing homes. Effective marketing campaigns should target decision makers who initiate therapy in hospitals as well as those who prescribe medication in nursing homes, where therapy is often continued. Otherwise, a patient may be started on one agent in the hospital and switched to another upon admission to a nursing home, a loss to that product’s maker.
As populations age, governments will be under pressure to provide adequate healthcare services and to fund new drug treatments. However, equally, pharmaceutical companies will be under pressure to justify the prices they charge for novel medicines. There are several ways to implement a successful marketing strategy to the ageing market: identifying all the decision makers and how they influence care and prescribing; defining the needs of and appropriate messages for those key customers; closely analyzing the potential benefits of any product marketed to the older population and to the providers caring for them; understanding the level of healthcare necessary to this target population.
1. Kermani F. and McGuire S. (2002/2003). TransPharma, Volume 1, Issue 2, pp 34-37. http://www.chiltern.com/press/Articles/TP02Japan.pdf
2. Launch of Ageing Population Panel Report. June 13, 2000. Department of Trade and Industry.
3. Nagae T. (2003). Prediction of the Number of Hypertension Patients in Japan. Pharma Japan No. 1843: 1 – 7.
4. Gerdtham, U-G et al. (1994). Factors affecting health spending: a cross-country econometric analysis. OECD/GD (94) 101.
5. Cardiovascular Disease in the Elderly. Mayo Clinic Rochester. http://www.mayo.edu/geriatrics-rst/index.html
6. New Medicines in Development for Older Americans, 2002. Pharmaceutical Research and Manufacturers of America (PhRMA). http://www.phrma.org/newmedicines/olderamericans/
7. Elderly Spend More on Prescription Drugs to Maintain Health. The Medicare Chartbook. Pharmaceutical Research and Manufacturers of America (PhRMA). http://www.phrma.org/issues/medicare/chartbook/index.cfm
8. Seniors Cite Medicare, Drug Benefit as Top Health Care Concerns (2002). Pharmaceutical Research and Manufacturers of America (PhRMA). Medicare Archives. http://www.phrma.org/mediaroom/
9. Ageism is Pervasive in Health Care? (May 20, 2003).
Jim Abrams, CBSNews.com
10. Alliance for Aging Research Exposes Widespread Ageism in U.S. Healthcare (May 19, 2003)
Author information as of publication date: Dr Faiz Kermani currently works in Business Development at the CRO, Chiltern International, where his role covers bids, proposals and marketing.