Disease management has been marketed by healthcare industry providers as a
way of improving resource allocation in healthcare and containing costs. Ho
wever, to achieve improved efficiency in healthcare requires the guidelines
and protocols in the disease management process to be based on sound evide
nce of effectiveness and cost effectiveness. This has not always been the c
ase. The approach itself has an inadequate evidence base in terms of random
ised controlled trials, other rigorous methods of evaluation and the result
s of economic evaluation. Disease management can be viewed as an attempt by
pharmaceutical companies to undertake forward vertical integration into ot
her parts of the healthcare process. This could reduce uncertainty for purc
hasers and reduce transaction costs, thereby potentially facilitating both
healthcare expenditure control and efficiency. However, such cost savings m
ay be outweighed by a concentration of power in disease management (pharmac
eutical) companies, and the exploitation of such power to inflate expenditu
re and misallocate resources. Disease management must be appraised with car
e.