Executive Summary

Today, drug companies are experiencing unprecedented success on precisely the terms that managed care should have denied it: robust pricing and profitability and a new definition of success for individual products, the mega-blockbuster. Aggressive direct-to-consumer ad campaigns and the success of new, so-called lifestyle or cosmetic drugs, such as {Viagra}, only underscore the impotence of managed care organizations in their efforts to rein-in pharmaceutifal costs. But there are rumblings in some corners of the industry that drug companies take managed care's impotence for granted at their peril.