Healthcare in a Recession (OTC, Generics, Out of Pocket Spending, Healthcare Legislation, Retail Clinics, Outsourcing and Other Topics)

• Publication date: March 2009

Current economic conditions dominate business strategies. While healthcare has fared better than other industries, it will not be immune from the effects of the current recession. But what aspects of healthcare will be impacted? How much of spending will be out of the consumer's pocket? How will some novel trends (retail clinics, medical tourism) fit into this economy? It is commonly asserted that OTC and generic drugs sales will be boosted....

Current economic conditions dominate business strategies. While healthcare has fared better than other industries, it will not be immune from the effects of the current recession. But what aspects of healthcare will be impacted? How much of spending will be out of the consumer's pocket? How will some novel trends (retail clinics, medical tourism) fit into this economy? It is commonly asserted that OTC and generic drugs sales will be boosted. Will this pan out? What will be the possible effects of various types of healthcare plans that might be implemented?

In Healthcare in a Recession,Kalorama Information has examined all of the key medical markets in the past and has witnessed change and in some sector's profits due to economic conditions. Kalorama has consulted its experts in key areas and asked about the effect of the recession. This report takes a broad look at the healthcare market in a recession from the many areas of healthcare that Specifically the report address:

• The State of the Pharmaceutical Industry


• Outsourcing and Offshoring


• Generic Drugs: A Coming Boom?


• Over the Counter Drugs


• Possible impact of Healthcare Legislation


• Out of Pocket Healthcare Spending: Current and Future


• The Retail Clinic Phenomenon


• Availability of Health Insurance


• Medical Tourism: Boom or Bust?


• Influential Pharmacists

Healthcare Industry in the United States

CHAPTER ONE: EXECUTIVE SUMMARY

Out of Pocket Spending

Healthcare Legislation

State of the Pharmaceutical Industry, 2009 • Meeting Investor Expectations • Erosion of Blockbuster Sales • Increased Generic Competition • Pricing Pressures • Pipeline Output Slowing Compared to ROI • Mergers &Aquisitions

Retail Clinics

OTC/Generic Drugs

CHAPTER TWO: INTRODUCTION

The U.S. Healthcare System Today

Overview THE NEED FOR ALTERNATIVES

High Cost of Care

Healthcare Reform

CHAPTER THREE: OUT-OF-POCKET EXPENDITURES: THE MARKET IN 2009

Types of Expenditures

Insurance Co-Payments

Direct Payments

Premiums and Plan Fees

Cash or Check

Credit Cards

Loans and Lines of Credit

Flexible Spending Accounts

Health Savings Accounts

Medical Financing

Elective Procedures

Non-Elective Procedures and Prescription Drugs Consumers Who Pay Out Of Pocket

The Uninsured and Underinsured

Medicaid Recipients

The Disabled

Senior Citizens

The Mentally Ill

The Obese

Persons with Chronic Conditions

CHAPTER FOUR: OUT-OF-POCKET EXPENDITURES: THE MARKET IN 2009 - 2013

Out-of-pocket Expenditure Growth Drivers

Payment Methods

Consumers Who Pay Out-of-pocket

CHAPTER FIVE: OVER THE COUNTER DRUGS: IN POSITION

United States Market

OTC and Recession: Avoiding the Copay

Behind the Counter Drugs?

CHAPTER SIX: INFLUENTIAL PHARMACISTS

Markets - Pharmacists Impact

The Prescribing Pharmacist

Main Drivers For Increased Pharmacist Prescription Authority

CHAPTER SEVEN: MEDICAL TOURISM: BOOM OR BUST?

Motivations for Medical Tourism

Impact of Recession

True Medical Tourism vs. All Healthcare for Foreigners

CHAPTER EIGHT: STATE OF THE PHARMACEUTICAL MARKET: OFFSHORING AND OUTSOURCING

Meeting Investor Expectations

Erosion of Blockbuster Sales

Increased Generic Competition

Pricing Pressures

Pipeline Output Slowing Compared to ROI

M&A Offshoring Clinical Trials

Size and Growth of the Market

Outsourcing: No Longer Optional For Pharma

Strategic Outsourcing

Outsourcing Manufacturing Operations

CHAPTER NINE: GENERIC DRUGS: COMING BOOM?

Overview

Issues in Generics

CHAPTER TEN: RETAIL CLINICS

Retail Clinics Business

Competition with Primary Care Providers

Regulation

CHAPTER ELEVEN: IMPACT OF HEALTHCARE LEGISLATION

Overview

Change for Pharma

Focus on Cost - Cutting

Healthcare Reform

CHAPTER TWELVE: COMPANY PROFILES

APFUSA

Atlantic Care

Aurora Quick Care

Capitol One Healthcare Finance

Care Credit

Cerner Corporation

Products and Service

Key Competitors

Credit Medical

CSI Financial Services

E- Financing Solutions

GlaxoSmithKline

History and Lines of Business

Strategic Alliances

Vaccine Products

OTC Products

Financial Information

Hospira Inc.

Med Basics

McKesson Corporation

Company Overview

Products and Service

Medco Health Solutions, Inc.

Merck & Co. Inc

History and Lines of Business

Strategic Alliances

Vaccine Products

Financial Information

Med choice Financial

MedDirect

Minute Clinic

Novartis

History and Lines of Business

Strategic Alliances

Vaccine Products

My Healthy Access

Now Medical Centers

Pfs

Quick Health

Rediclinic

Reliance Medical Finance

Solantic

Take Care Health Systems

Target Clinic Medical Associates

TEVA Pharmaceutical Industries, Ltd.

Wyeth (Pfizer)

History and Lines of Business

Vaccine Products

OTC Products

Financial Information

Siemens Medical Solutions

Key Competitors

Growth Strategy

Locations

Wal - Mart

LIST OF EXHIBITS

CHAPTER TWO: INTRODUCTION

Figure 2-1:National Health Expenditures (NHE) and NHE as a Percent of GDP, 1980 - 2013

Figure 2-2: Unnecessary Deaths Resulting From Variations in Health Care Quality, by Condition (Prenatal Care, Diabetes Care, Beta Blocker Treatment, Breast Cancer Screening, Cholesterol Management, High Blood Pressure, Diabetes)

Figure 2-3:HEDIS Scores by Quality of Health Care Plan, 2008

Table 2-1: U.S. Health Care Coverage by State, 2008

CHAPTER THREE: OUT-OF-POCKET EXPENDITURES THE MARKET IN 2009

Figure 3-1:Premium Increases vs. Increases in Workers Earnings and Prices, 1989 - 2008

Figure 3-2: Consumer Out-of-pocket Health Care Expenditures,

Figure 3-3:Consumer Out-of-pocket Health Care Expenditures by Payment Type,2008

Table 3-1: Credit Card Debt of Consumers With Medical Debt, 2007

Table 3-2: Credit Card Debt of Consumers With Medical Debt, 2007

Table 3-3: Main Business Activities of Selected Medical Financing Companies,

Figure 3-4:by Percentile of Total Health Spending,

Figure 3-5:Methods of Financing Elective Procedures,

Figure 3-6: Average Share Paid Out-of-pocket by U.S. Residents with Health Care Spending by Type of Service, 2008

Figure 3-7: by Percentile of Total Health Spending and Type of Service, 2008

Figure 3-8: Distribution of Out-of-pocket Spending on Non-Elective Procedures for the Average Person, 2008

Figure 3-9: Distribution of Out-of-pocket Spending for the Average Person, by Spending Level, 2008

Figure 3-10: Drug Cost Coverage by Payor Type (Public, Private, Cash) 1965, 1986, 2000, 2004, 2008

Table 3-4: Obesity in the United States, 1980 - 2013

Figure 3-11: Proportion of Adults Under Age 65 With Chronic Conditions, 2008

CHAPTER FOUR: FORECASTED OUT-OF-POCKET EXPENDITURES: THE MARKET IN 2009 - 2013

Table 4-1: Selected Rx-to-OTC Switches in the United States, 1990 - Present

Table 4-2: Rx-to-OTC Switch Candidates in the United States, 2009 - 2013

Table 4-3: Consumer Out-of-pocket Expenditures per Worker 2003-2013 (in $)

Table 4-4: Consumer Out-of-pocket Expenditures by Type, 2003-2013

Figure 4-1: Proportion of Consumer Out-of-pocket Spending by Type of Health Care Expenditure

Table 4-5: Consumer Out-of-pocket Expenditures by Type, 2001-2011

Figure 4-2: Proportion of Consumer Out-of-pocket Spending by Payment Type, 2003, 2008, 2013

Table 4-6: Amount of Consumer Out-of-pocket Expenditures for Elective Procedures That Are Financed, 2003-2013

Table 4-7: Amount of Consumer Out-of-pocket Expenditures for Non-Elective Procedures That Are Financed, 2001-2011

Figure 4-3: Proportion of Consumer Out-of-pocket Spending for Elective ProceduresThat is Financed (All Methods),

Figure 4-4: Distribution of Out-of-pocket Spending on Non-Elective Procedures for the Average Person, 2008, 2013

Figure 4-5: Proportion of Consumer Out-of-pocket Spending for Non-Elective Procedures That is Financed (All Methods),2008 - 2013

Table 4-8: Size of High Risk Groups for High Out-of-pocket Health Care Expenditures, 2003-2013 (Millions of Persons)

CHAPTER FIVE: OVER THE COUNTER DRUGS: IN POSITION

Table 5-1: Projected US OTC Revenues 2008-2012

CHAPTER SIX: INFLUENTIAL PHARMACISTS

Figure 6-1: Declining Drug Purchases Not Influenced By Pharmacists, 2006-2012

Table 6-1: Pharmacists Influence in Drug Selection and/or Therapy Aspect: 2007 and 2012

Table 6-2: States Likely to Implement Independent Prescribing First

CHAPTER SEVEN: MEDICAL TOURISM: BOOM OR BUST?

Table 7-1: Cost Savings From Medical Tourism For Various Procedures, 2008

Figure 7-1: US ‘True Medical Tourism’ Revenues, 2008, 2010

CHAPTER EIGHT: STATE OF THE PHARMACEUTICAL MARKET,: OFFSHORING AND OUTSOURCING

Table 8-1: Clinical Trial Market in Select Countries 2006-2012

Table 8-2: Global Prescription Pharmaceutical Contract Manufacturing Market Primary, Secondary and Biomanufacturing 2003-2013

CHAPTER NINE: GENERIC DRUGS: COMING BOOM?

Table 9-1: US Generic Drug Market 2008-2012

CHAPTER TEN: RETAIL CLINICS

Figure 10-1: Growth of U.S. Retail Clinic Services

CHAPTER ELEVEN: IMPACT OF HEALTHCARE LEGISLATION

Table 11-1: Likely Impact of Events and Proposed Legislation (Propsed Change, Probability, Positive Impact, Negative Impact)

CHAPTER TWELVE: COMPANY PROFILES