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Unveiling the Hidden Costs: The Impact of Delayed Pharmac Reimbursement on Chronic Therapy

Writer's picture: Nick LeachNick Leach

Updated: Feb 2, 2024

In my recent collaboration with a company evaluating potential proposals for Pharmac, an essential aspect we discussed revolved around the criticality of prompt reimbursement for chronic therapy. The financial impact of delays in this regard is significant, as any postponement of reimbursement incurs continuous costs year after year. Allow me to illustrate the cost implications through the following example.



Chart demonstrating cost of delay
Cost of delay model

In my experience, the loss in patient numbers due to delays in reimbursement is irrevocable. Consider this model's findings over a three-year period, demonstrating the drastic impact of delays: a 12-month delay results in a 51% reduction in volume, while a 24-month delay escalates this figure to a staggering 176% volume reduction.

It's essential to create these scenarios whenever contemplating reimbursement delays in an attempt to negotiate better pricing. Any potential price adjustment must be substantial enough to offset the continual loss in volume, year after year.

Understanding the long-term consequences of reimbursement delays underscores the significance of having the right partner that can speed up the negotiation process and model scenarios to improve decision-making.


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