Tackling the Prior Authorization Challenge

The commercial dynamics facing the pharmaceutical industry have shifted in recent years.  It is no longer sufficient to market pharmaceutical products based solely on efficacy and side effect profile, or to contract with managed care for formulary positions. It has become vitally important for pharma to help physicians navigate the complex maze of patient access due to managed care restrictions, in order to help patients receive the best treatment for their condition.

In perspective, the industry’s challenges are significant. As older drugs go off patent, the challenge of commercializing innovative medicines is daunting. The Tufts Center for the Study of Drug Development published a 2014 study showing the true cost to develop a new product to be nearly $2.6 billion. In addition, when a product is approved, it can cost tens of millions of dollars to build or retool manufacturing facilities.

Furthermore, approval can be contingent on post marketing surveillance and Risk Evaluation and Mitigation Strategies (REMS) programs that need to be established in advance of launch.

In anticipation of launch, brands must engage in significant premarketing activities in order to demonstrate the product is best suited to treat certain therapeutic conditions. In the first few years after launch, pharma companies often spend up to hundreds of millions of dollars in promotional costs, including advertising, sales, training, samples, conferences, and DTC advertising.

Complexities of Prior Authorization

These steps may lead a physician to write a prescription, yet there is no guarantee that the product will be dispensed. These investments can be for naught if the managed care plan imposes restrictions that prevent the patient from getting the medication.

Prescription prior authorization (PA) is a restriction by managed care organizations that requires a prescriber to seek approval for a specific drug by completing and submitting information before a drug can be dispensed.

Certain clinical criteria must be met. The incidence and complexity of PAs is increasing, affecting more and more medications.

When a PA is required, less than half of all patients obtain the originally prescribed drug. This is bad for pharma, frustrating to prescribers and even worse for patients who don’t get the medication that could best treat their condition, and often don’t get any therapy at all.

At this time, most major branded medicines face PA requirements across multiple managed care plans. With so many products requiring PA, there is a “backlash cost” to the healthcare system, resulting from patients who abandon therapy when confronted with PA requirements.

Studies have shown that when a prescription is denied at the pharmacy due to prior authorization, approximately 70 percent of those patients never receive the originally intended medication.1 Furthermore, upwards of 40 percent of patients abandon therapy altogether when their initial prescription is denied, requiring a PA.2

Multi-Step Process Can Be a Deterrent

The PA process can involve several steps for a physician practice: Finding the appropriate form, filling out the form with the required information, appending information with clinical documentation in certain instances, submitting the form to the plan, and often completing and submitting a “follow-up, patient specific” form. 

If the practice needs to call the plan either for clarification or to follow up on a submitted request, telephone “hold times” can be 20 or more minutes. Most physicians will tell you that the overall process can take 30-45 minutes for each PA submission.

For many practices, the time burden associated with the PA process causes them to abandon a preferred therapy in favor of a different formulary medication, even if they believe that the original medication is better for their patient. 

In addition, the process is becoming increasingly difficult for practices. PA forms can be complex and are frequently being changed, and PA forms vary significantly by both medication and by plan.

PA’s are not new, and pharmaceutical companies have tried a number of approaches to managing the PA challenge:

  • Giving physicians a copy of PA forms or putting them on their web site: This tactic can result in physician practices becoming inundated with multiple PA forms from multiple pharma companies for many different products; many abandon the process as burdensome and confusing.
  • Relying on third party “forms clearinghouses”: In this approach, pharma companies partner with third party service providers who offer web sites maintaining a library of various PA forms for multiple products and plans.  Practices often find it cumbersome to find the correct form and to complete it accurately.
  • Utilizing services to “push” electronic PA forms from pharmacies to physician offices: While this service eliminates the need for practices to search for the appropriate PA form, our experience shows that well more than half of these forms are neglected by the practice and never completed or submitted. Providing a PA form is merely a first step in helping to manage the complex PA process.

Most Effective Solutions

What more pharmaceutical companies are learning is that the most effective PA solutions must include several aspects:

  • Make it easy. A solution should include elements such as a universal PA form, making it quick and easy to provide the required information.  A strong PA solution should save time for the practice by managing the process in its entirety, making required follow up calls to plans, and providing timely status updates.
  • Eliminate denials for non-clinical reasons. A good PA service can eliminate administrative denials due to reasons such as illegible or incomplete information, by employing a simple to complete electronic format that includes “drop-down menus” and radio dial buttons to prevent submission without all required fields being completed.
  • No more calls! It is typical for plans to have telephone hold times of anywhere from 20 to 40 minutes before a practice can speak with a live person. A PA service that calls plans to follow up on PAs or provide additional information is very well received by prescribers.
  • Rely on professionals. The ideal PA solution should engage professionals such as pharmacy technicians, nurses, and medical assistants. It is important that the people who call the plans and the physician practices can “speak the language” when discussing clinical information.
  • Time matters. The PA process should be expedited wherever possible. A PA service that submits PAs promptly and follows up with plans on a timely basis can result in faster PA approvals, leading to quicker patient initiation of the “preferred” therapy.

‘Total Office Call’ for Success

While the physician decides which product to prescribe, usually an office staff member is responsible for submitting and managing PAs. A “total office call” by a pharma representative can be very beneficial in showing staff members how a service can save them time, letting them focus their resources on more valuable activities for the practice.

A successful PA “pull-through” strategy can generate real results for pharmaceutical companies. As one example out of many in my experience, a sales representative took over a territory that had severe PA restrictions. While physicians preferred her product, they frequently switched to other formulary drugs to avoid the hassle of prior authorization. 

At the outset, this territory ranked 141st in sales out of 150 territories nationally. After introducing practices to a PA service, this representative was able to increase sales while building strong relationships with practices, resulting in a climb to the 6th ranked territory in the U.S.

Pharma company pipelines are full of expensive specialty medications that will in all likelihood require PAs once approved. The “patent cliff” of the 2000s has resulted in low-cost generic medications that populate the favorable formulary tiers of most managed care plans. Because of this, pharmaceutical companies need to invest in PA programs that prescribers will actually use. 

By improving patient access to prescribed medications, pharmaceutical companies realize more sales, prescribers can utilize medications that they deem most appropriate for their patients, and most importantly, patients receive the treatments that their doctors determine are best for their conditions, leading to improved outcomes.

Although it happens one prescription at a time, the cumulative effect of PAs can be devastating. Pharmaceutical leaders need to look closely at their PA strategies and what they are getting from their PA initiatives. Focusing their sales representatives on PAs is an effective approach to saving the prescription and handling one of the most frequent and important barriers to physician prescribing.


1 Point of Care Partners. Electronic Prior Authorization for Medications: The Time is Right for Plans, PBMs and Other Payers. February 2012. Hanson, KA. Journal of Managed Care Pharmacy. An Analysis of Antihypertensive Use Following Initially Rejected Pharmacy Claims for Aliskiren. September 2009: Vol. 15, No. 7, pg 573-574.

2 Point of Care Partners. Electronic Prior Authorization for Medications: The Time is Right for Plans, PBMs and Other Payers. February 2012. Hanson, KA. Journal of Managed Care Pharmacy. An Analysis of Antihypertensive Use Following Initially Rejected Pharmacy Claims for Aliskiren. September 2009: Vol. 15, No. 7, pg 573-574.


(Dan Rubin became President and CEO at PARx Solutions in mid-2012. In his role, Dan is responsible for helping to set the company’s strategic direction while working closely with key clients and strategic partners.)