Secular Trends in the Cost of Immunosuppressants after Solid Organ Transplantation in the United States

BACKGROUND AND OBJECTIVES

Immunosuppressive medications are critical for maintenance of graft function in transplant recipients but can represent a substantial financial burden to patients and their insurance carriers.

DESIGN, SETTING, PARTICIPANTS, & MEASUREMENTS

To determine whether availability of generic immunosuppressive medications starting in 2009 may have alleviated some of that burden, we used Medicare Part D prescription drug events between 2008 and 2013 to estimate the average annualized per-patient payments made by patients and Medicare in a large national sample of kidney, liver, and heart transplant recipients. Repeated measures linear regression was used to determine changes in payments over the study period.

RESULTS

Medicare Part D payments for two commonly used immunosuppressive medications, tacrolimus and mycophenolic acid (including mycophenolate mofetil and mycophenolate sodium), decreased overall by 48%-67% across organs and drugs from 2008 to 2013, reflecting decreasing payments for brand and generic tacrolimus (21%-54%), and generic mycophenolate (72%-74%). Low-income subsidy payments, which are additional payments made under Medicare Part D, also decreased during the study period. Out-of-pocket payments by patients who did not receive the low-income subsidy decreased by more than those who did receive the low-income subsidy (63%-79% versus 24%-44%).

CONCLUSIONS

The decline in payments by Medicare Part D and by transplant recipients for tacrolimus and mycophenolate between 2008 and 2013 suggests that the introduction of generic immunosuppressants during this period has resulted in substantial cost savings to Medicare and to patients, largely reflecting the transition from brand to generic products.

Pharmacy Benefit Managers: Practices, Controversies, and What Lies Ahead

ISSUE

Pharmacy benefit managers (PBMs) are responsible for negotiating payment rates for a large share of prescription drugs distributed in the U.S. Recently, policymakers have expressed concern that certain PBMs' business practices may not be consistent with public policy goals to improve the value of pharmaceutical spending.

GOAL

We sought to explain key controversies related to PBM practices and their roles in driving value in the pharmaceutical market.

METHODS

Literature review and feedback from top experts on PBM business practices and potential policy solutions.

KEY FINDINGS AND CONCLUSION

In some cases, PBMs' use of rebates has contributed to high pharmaceutical costs, yet proposed solutions to the rebate controversy--including passing the rebate through to payers or patients--will not on their own reduce overall pharmaceutical spending without other policies that drive toward value. Policymakers seeking to reform pharmaceutical reimbursement beyond the practice of rebates will need to consider these changes in light of the recent mergers between PBMs and insurers and the entry of new market competitors.

Comparison of healthcare resource utilization and costs in patients with type 2 diabetes initiating dapagliflozin versus sitagliptin

AIMS

To compare healthcare costs and utilization in patients with type 2 diabetes (T2D) who initiated dapagliflozin (DAPA) with costs and utilization in those who initiated sitagliptin (SITA) in a real-world setting.

MATERIALS AND METHODS

This was a retrospective study of health plan enrollees in two US commercial claims databases or Medicare Part D. The study population comprised adult patients with T2D who initiated DAPA or SITA between January 1, 2014 and April 30, 2015. DAPA and SITA initiators were propensity-score-matched, and healthcare utilization and costs during the 1-year follow-up period were compared. Analyses were conducted separately for patients with evidence of oral antidiabetic drug (OAD) monotherapy use at baseline.

RESULTS

A total of 2722 patients were included in each matched cohort. Follow-up unadjusted all-cause costs ($16 065 and $17 281; P = 0.135) and diabetes-related costs ($9697 and $9354; P = 0.539) were similar in the DAPA and SITA cohorts. Higher office and outpatient visit costs in the SITA group were offset by higher pharmacy costs in the DAPA group. In the subgroup of 1804 patients with OAD monotherapy use at baseline, patients in the SITA group had higher total all-cause costs compared with those in the DAPA group ($14 884 vs. $12 353; P = 0.026).

CONCLUSION

Patients who initiated DAPA or SITA had similar all-cause and diabetes-related healthcare costs over 1 year of follow-up. In the subgroup of patients treated with OAD monotherapy at baseline (84% metformin monotherapy), those who initiated DAPA as add-on therapy had lower costs than patients who added SITA.

Payments from drug companies to physicians are associated with higher volume and more expensive opioid analgesic prescribing

BACKGROUND

While the rise in opioid analgesic prescribing and overdose deaths was multifactorial, financial relationships between opioid drug manufacturers and physicians may be one important factor.

METHODS

Using national data from 2013 to 2015, we conducted a retrospective cohort study linking the Open Payments database and Medicare Part D drug utilization data. We created two cohorts of physicians, those receiving opioid-related payments in 2014 and 2015, but not in 2013, and those receiving opioid-related payments in 2015 but not in 2013 and 2014. Our main outcome measures were expenditures on filled prescriptions, daily doses filled, and expenditures per daily dose. For each cohort, we created a comparison group that did not receive an opioid-related payment in any year and was matched on state, specialty, and baseline opioid expenditures. We used a difference-in-differences analysis with linear generalized estimating equations regression models.

RESULTS

We identified 6,322 physicians who received opioid-related payments in 2014 and 2015, but not in 2013; they received a mean total of $251. Relative to comparison group physicians, they had a significantly larger increase in mean opioid expenditures ($6,171; 95% CI: 4,997 to 7,346), daily doses dispensed (1,574; 95%CI: 1,330 to 1,818) and mean expenditures per daily dose ($0.38; 95% CI: 0.29 to 0.47). We identified 8,669 physicians who received opioid-related payments in 2015, but not in 2013 or 2014; they received a mean total of $40. Relative to comparison physicians, they also had a larger increase in mean opioid expenditures ($1,031; 95% CI: 603 to 1,460), daily doses dispensed (557; 95% CI: 417 to 697), and expenditures per daily dose ($0.06; 95% CI: 0.002 to 0.13).

CONCLUSIONS

Our findings add to the growing public policy concern that payments from opioid drug manufacturers can influence physician prescribing. Interventions are needed to reduce such promotional activities or to mitigate their influence.

Paying for Drugs After the Medicare Part D Beneficiary Reaches the Catastrophic Limit: Lessons on Cost Sharing from Other US Policy Partnerships Between Government and Commercial Industry

In 2018, the Medicare Part D catastrophic threshold is $5000 in out-of-pocket total drug spending incurred by the beneficiary. Above this, Medicare pays 80%, prescription drug plans (PDPs) pay 15%, and beneficiaries pay a 5% copay. However, recent growth in catastrophic spending is caused by expensive specialty drugs. The 5% copay, on top of out-of-pocket spending, could result in beneficiaries not accessing specialty drugs. To assist beneficiaries, the Medicare Payment Advisory Commission (MedPAC) proposes to eliminate beneficiary catastrophic cost sharing, while PDPs pay 80% and Medicare pays 20%. Our objective was to assess other government cost-sharing approaches and consider how they would affect pharmaceutical access, PDP Part D incentives, and pharmaceutical innovation. We reviewed published literature and government reports on cost sharing between US government divisions or between government and private commercial entities. We discussed their cost-sharing applicability to Part D. We found that the US government has utilized numerous cost-sharing approaches to enhance public-private partnerships. We reviewed four cost-sharing arrangements and their applicability to Medicare: the Byrd-Bond Amendment to the Clean Air Act-Medicare bulk purchases drugs costing $8000 + ; North Atlantic Treaty Organization (NATO)-cost sharing based on high-risk markets; the Ryan White Ryan White Comprehensive AIDS Resources Emergency (CARE) Act-grants to PDPs in high-risk markets and grants to beneficiaries who cannot afford drugs; and the Department of Veterans Affairs-drug price negotiation for expensive drugs. In conclusion, a variety of federal cost-sharing approaches provide precedent for altering PDP cost sharing. The government tends to prefer options that have been tried elsewhere.

Association between Higher Generic Drug Use and Medicare Part D Star Ratings: An Observational Analysis

BACKGROUND

Increasing generic drug use, due to potential for cost savings and drug access, is a viable consideration for Medicare prescription drug plans to achieve high star ratings and improve quality of plan offerings for Medicare beneficiaries.

OBJECTIVE

To examine the association between contract-level proportion of generic drugs dispensed (pGDD) and Medicare Part D star ratings.

METHODS

This was a retrospective study of linked 2011 Medicare Part D star rating data with contract-level pGDD data. A total of 477 individual Medicare prescription contracts were included, representing 75% of total Prescription Drug Plans and more than 65% of total Medicare Advantage Prescription Drug Plans available by the end of 2010. Primary outcomes were Medicare Part D summary and domain star ratings (1-5 indicating lowest to highest performance), incorporating a range of quality measures for access, cost, beneficiary satisfaction, and health services outcomes and processes. Ordinal logistic regression models were used to examine associations between pGDD and Medicare Part D summary and domain star ratings, controlling for contract type and number of beneficiary enrollment.

RESULTS

Higher pGDD was associated with higher summary star ratings (adjusted odds ratio 1.08 with 95% confidence interval 1.04-1.12) and higher "member experience with drug plan" domain ratings (adjusted odds ratio 1.07 with 95% confidence interval 1.03-1.11).

CONCLUSIONS

Prescription formulary benefit design targeting increasing generic drug use appears to be associated with improved member experience and higher plan star ratings. Consideration may be given to incorporating pGDD into Medicare Part D star rating measures to improve quality of prescription plans.

Medicare Spending on Brand-name Combination Medications vs Their Generic Constituents

IMPORTANCE

Brand-name combination drugs can be more expensive than the sum of their components, especially when the constituent products are available as generic medications. The potential savings that could be achieved using generic components is not known.

OBJECTIVE

To estimate the additional cost to Medicare of prescribing brand-name combination medications instead of generic constituents.

DESIGN, SETTING, AND PARTICIPANTS

Retrospective analysis for 2011 through 2016 using the Medicare data set of Part D beneficiaries prescribed any of the 1500 medications that accounted for the highest total spending in 2015. Brand-name combination drugs that had identical or therapeutically equivalent generic constituents were included.

EXPOSURES

Brand-name, oral combination medications with constituents available either as generic drugs or therapeutically equivalent generic substitutes.

MAIN OUTCOMES AND MEASURES

The estimated difference between the amount spent by Medicare on brand-name combination drugs and the estimated amount that would have been spent on substitutable generic components.

RESULTS

Among the 1500 medications evaluated, 29 brand-name combination medications were separated into 3 mutually exclusive categories: constituents available as generic medications at identical doses (n = 20), generic constituents at different doses (n = 3), and therapeutically equivalent generic substitutes (n = 6). For the constituents available as generic medications at identical doses category, total spending by Medicare in 2016 on the brand-name combination products was $303 million and the estimated spending for the generic constituents would have been $68 million, which is an estimated difference of $235 million. For the generic constituents at different doses category, total spending by Medicare in 2016 on the brand-name combination products was $232 million and the estimated spending for the generic constituents would have been $13 million, which is an estimated difference of $219 million. For the therapeutically equivalent generic substitutes category, total spending by Medicare in 2016 on the brand-name combination products was $491 million and the estimated spending for the generic constituents would have been $20 million, which is an estimated difference of $471 million. In 2016, the estimated spending for the generic constituents for these 29 drugs would have been $925 million less than the estimated spending for the brand-name combinations. For the 10 most costly combination products available during the entire study period, the listed Medicare spending could have been an estimated $2.7 billion lower between 2011 and 2016 if the generic constituents had been prescribed.

CONCLUSIONS AND RELEVANCE

In 2016, the difference between the amount that the Medicare drug benefit program reported spending on brand-name combination medications and the estimated spending for generic constituents for the same number of doses was $925 million. Promoting generic substitution and therapeutic interchange through prescriber education and more rational substitution policies may offer important opportunities to achieve substantial savings in the Medicare drug benefit program.

Relationship between patient copayments in Medicare Part D and vaccination claim status for herpes zoster and tetanus-diphtheria-acellular pertussis

OBJECTIVE

To assess the relationship between copay amount and vaccination claim submission status for tetanus-diphtheria-acellular pertussis (Tdap) and herpes zoster (GSK study identifier: HO-14-14319).

METHODS

Retrospective analyses were performed using vaccination administrative claims data in patients aged ≥65 years with ≥1 claim for Tdap or zoster vaccines between 2012 and 2014. To avoid confounding by other financial responsibility, analyses were conducted among patients in the copayment phase of insurance. The impact of patient copay amount on vaccination claim status ("canceled" vs. "paid") was evaluated by logistic regression separately for Tdap and zoster, adjusting for patient and provider characteristics.

RESULTS

A total of 81,027 (39.2% with canceled claims) and 346,417 patients (56.8% with canceled claims) were included in the Tdap and zoster analyses, respectively. Mean (standard deviation) copay for canceled vs. paid claims was $37.2 (18.4) vs. $31.1 (20.1) for Tdap and $64.9 (36.9) vs. $53.5 (38.8) for zoster. The adjusted odds ratios (ORs) for a canceled Tdap vaccine claim, compared with $0 copay, were 1.19 ($1-25 copay), 1.76 ($26-50 copay), 2.42 ($51-75 copay) and 2.40 ($76-100 copay), all p < .001. The adjusted ORs for a canceled zoster vaccine claim, compared with $0 copay, were 1.02 ($1-25), 1.39 ($26-50), 1.66 ($51-75), 2.07 ($76-100) and 2.71 (>$100), all p < .001 except for $1-25 (p = .172).

CONCLUSIONS

High patient copay is a barrier to Tdap and zoster vaccinations in Medicare Part D patients. Providing vaccines at low or no copay may improve vaccination rates in these adults. GSK study identifier: HO-14-14319.

Industry Payments to Physician Specialists Who Prescribe Repository Corticotropin

Importance

Despite great expense and little evidence supporting use over corticosteroids, prescriptions for repository corticotropin (H. P. Acthar Gel; Mallinckrodt Pharmaceuticals) have increased markedly. Aggressive sales tactics and payments from the manufacturer may influence prescribing behavior for this expensive medication.

Objective

To characterize industry payments to physician specialists who prescribe corticotropin in the Medicare program.

Design, Setting, and Participants

This study was a cross-sectional analysis of Centers for Medicare & Medicaid Services 2015 Part D prescribing data linked to 2015 Open Payments data. Nephrologists, neurologists, and rheumatologists with more than 10 corticotropin prescriptions (frequent prescribers) in 2015 were included.

Exposures

Frequency, category, and magnitude of corticotropin-related payments from Mallinckrodt recorded in the Open Payments database.

Main Outcomes and Measures

Frequency, category, and magnitude of corticotropin-related payments from Mallinckrodt, as well as corticotropin prescriptions and expenditures for Medicare beneficiaries.

Results

Of the 235 included physicians, 65 were nephrologists; 59, neurologists; and 111, rheumatologists. A majority of frequent corticotropin prescribers (207 [88%]) received corticotropin-related payments from Mallinckrodt. The median (range) total payment for 2015 was $189 ($11-$138 321), with the highest payments ranging from $56 549 to $138 321 across the specialties. More than 20% of frequent prescribers received more than $10 000 and the top quartile of recipients received a median (range) of $33 190 ($9934-$138 321) in total payments per prescriber. Payments for compensation for services other than consulting contributed the most to the total amount. Mallinckrodt payments were positively associated with greater Medicare spending on corticotropin (β = 1.079; 95% CI, 1.044-1.115; P < .001), with every $10 000 in payments associated with a 7.9% increase (approximately $53 000) in Medicare spending on corticotropin. There was no association between corticotropin-related payments and spending on prescriptions for synthetic corticosteroids.

Conclusions and Relevance

In this study, most nephrologists, neurologists, and rheumatologists who frequently prescribe corticotropin received corticotropin-related payments from Mallinckrodt. These findings suggest that financial conflicts of interest may be driving use of corticotropin in the Medicare program.

Impact of formulary restrictions on medication intensification in diabetes treatment

OBJECTIVES

To explore formulary restrictions on noninsulin antihyperglycemic drugs (NIADs) in Medicare Part D plans and to estimate the impact of formulary restrictions on use of NIADs among low-income subsidy (LIS) recipient enrollees with type 2 diabetes (T2D) undergoing treatment intensification.

STUDY DESIGN

Retrospective cohort study.

METHODS

A cohort of 2919 LIS enrollees with T2D receiving metformin monotherapy during the first quarter of 2012 who intensified treatment later in the year was tracked to assess selection of and days' supply with sulfonylureas, dipeptidyl peptidase-4 (DPP-4) inhibitors, and other NIADs. We tested whether being enrolled in a Part D plan with significant formulary restrictions on sole-source brand name NIADs reduced the likelihood of receiving such agents and, if so, what the impact was on days of therapy with the second agent. A 2-part regression model was estimated with explanatory variables for plan-level restrictions and individual covariates.

RESULTS

We found that 63% of study subjects initiated a sulfonylurea, 25% a DPP-4 inhibitor, and 12% another NIAD. Greater restrictions on DPP-4 inhibitors as a class were associated with small reductions in initiation of DPP-4 inhibitors and a concomitant increase in use of sulfonylureas, but neither effect was statistically significant. For individual DPP-4 inhibitors, step therapy requirements on sitagliptin and formulary exclusion of saxagliptin resulted in significant reductions in uptake of the specific drugs but had no significant impact on total days' supply of antihyperglycemic therapy.

CONCLUSIONS

Part D formulary restrictions on sole-source brand name NIADs had little impact on patterns of treatment intensification for T2D among LIS recipients enrolled in Medicare Part D plans in 2012.

Awareness of the Medicare Part D Low-Income Subsidy among Older non-Hispanic Blacks and Hispanics

Using nationally representative data from the Health and Retirement Study, this study examined (1) whether awareness of the Medicare Part D Low-Income Subsidy (LIS) varies by race and ethnicity among beneficiaries age 65 and older (N = 1,504), and (2) the impact of factors associated with health benefits knowledge and need for assistance on LIS awareness. Logistic regression results showed that compared with older non-Hispanic Whites, older non-Hispanic Blacks (odds ratio [OR] = .61, p < .001) and Hispanics (OR = .55, p < .01) were less likely to be aware of the LIS. Ethnic differences in LIS awareness were largely explained by language or Spanish-speaking preference (OR = 1.07, p = .808). However, accounting for demographics, health and socioeconomic status, and language did not reduce racial disparities (OR = .63, p < .01). Differences in LIS awareness among racial and ethnic minority groups highlight the need for culturally and linguistically sensitive community-based education, communication, programs, and services that increase knowledge of and access to this critical support.

The Association Between Local Economic Conditions and Opioid Prescriptions Among Disabled Medicare Beneficiaries

BACKGROUND

This paper concerns public health crises today-the problem of opioid prescription access and related abuse. Inspired by Case and Deaton's seminal work on increasing mortality among white Americans with lower education, this paper explores the relationship between opioid prescribing and local economic factors.

OBJECTIVE

We examined the association between county-level socioeconomic factors (median household income, unemployment rate, Gini index) and opioid prescribing.

SUBJECTS

We used the complete 2014 Medicare enrollment and part D drug prescription data from the Center for Medicare and Medicaid Services to study opioid prescriptions of disabled Medicare beneficiaries without record of cancer treatment, palliative care, or end-of-life care.

MEASURES AND RESEARCH DESIGN

We summarized the demographic and geographic variation, and investigated how the local economic environment, measured by county median household income, unemployment rate, Gini index, and urban-rural classification correlated with various measures of individual opioid prescriptions. Measures included number of filled opioid prescriptions, total days' supply, average morphine milligram equivalent (MME)/day, and annual total MME dosage. To assess the robustness of the results, we controlled for individual and other county characteristics, used multiple estimation methods including linear least squares, logistic regression, and Tobit regression.

RESULTS AND CONCLUSIONS

Lower county median household income, higher unemployment rates, and less income inequality were consistently associated with more and higher MME opioid prescriptions among disabled Medicare beneficiaries. Geographically, we found that the urban-rural divide was not gradual and that beneficiaries in large central metro counties were less likely to have an opioid prescription than those living in other areas.

Association of high cost sharing and targeted therapy initiation among elderly Medicare patients with metastatic renal cell carcinoma

High out-of-pocket costs may limit access to oral therapies covered by patients' prescription drug benefits. We explored financial barriers to treatment initiation in patients newly diagnosed with metastatic renal cell carcinoma (mRCC) by comparing Medicare Part D patients with low out-of-pocket costs due to receipt of full low-income subsidies (LIS beneficiaries) to their counterparts who were responsible for more than 25% cost sharing during Medicare's initial coverage phase (non-LIS beneficiaries). We used 2011-2013 100% Medicare claims for non-LIS and LIS beneficiaries newly diagnosed with metastases in the liver, lung, or bone to examine targeted therapy treatment initiation rates and time to initiation for (1) oral medications (sorafenib, sunitinib, everolimus, pazopanib, or axitinib) covered under Medicare's prescription drug benefit (Part D); (2) injected or infused medications (temsirolimus or bevacizumab) covered by Medicare's medical benefit (Part B); and (3) any (Part D or Part B) targeted therapy. The final sample included 1721 patients. On average, non-LIS patients were responsible for out-of-pocket costs of ≥$2,800 for their initial oral prescription, as compared to ≤$6.60 for LIS patients. Compared to LIS patients, a lower percentage of non-LIS patients initiated oral therapies (risk-adjusted rates, 20.7% vs. 33.9%; odds ratio [OR] = 0.49, 95% CI: 0.36-0.67, P < 0.001) and any targeted therapies (26.7% vs. 40.4%, OR = 0.52, 95% CI: 0.38-0.71, P < 0.001). Non-LIS patients were also slower to access therapy. High cost sharing was associated with reduced and/or delayed access to targeted therapies under Medicare Part D, suggesting that financial barriers play a role in treatment decisions.

Effects of Transitioning to Medicare Part D on Access to Drugs for Medical Conditions among Dual Enrollees with Cancer

OBJECTIVES

To evaluate the impact of transitioning from Medicaid to Medicare Part D drug coverage on the use of noncancer treatments among dual enrollees with cancer.

METHODS

We leveraged a representative 5% national sample of all fee-for-service dual enrollees in the United States (2004-2007) to evaluate the impact of the removal of caps on the number of reimbursable prescriptions per month (drug caps) under Part D on 1) prevalence and 2) average days' supply dispensed for antidepressants, antihypertensives, and lipid-lowering agents overall and by race (white and black).

RESULTS

The removal of drug caps was associated with increased use of lipid-lowering medications (days' supply 3.63; 95% confidence interval [CI] 1.57-5.70). Among blacks in capped states, we observed increased use of lipid-lowering therapy (any use 0.08 percentage points; 95% CI 0.05-0.10; and days' supply 4.01; 95% CI 2.92-5.09) and antidepressants (days' supply 2.20; 95% CI 0.61-3.78) and increasing trends in antihypertensive use (any use 0.01 percentage points; 95% CI 0.004-0.01; and days' supply 1.83; 95% CI 1.25-2.41). The white-black gap in the use of lipid-lowering medications was immediately reduced (-0.09 percentage points; 95% CI -0.15 to -0.04). We also observed a reversal in trends toward widening white-black differences in antihypertensive use (level -0.08 percentage points; 95% CI -0.12 to -0.05; and trend -0.01 percentage points; 95% CI -0.02 to -0.01) and antidepressant use (-0.004 percentage points; 95% CI -0.01 to -0.0004).

CONCLUSIONS

Our findings suggest that the removal of drug caps under Part D had a modest impact on the treatment of hypercholesterolemia overall and may have reduced white-black gaps in the use of lipid-lowering and antidepressant therapies.

The Role of Medical Expenditure Risk in Portfolio Allocation Decisions

Economic theory suggests that medical spending risk affects the extent to which households are willing to accept financial risk, and consequently their investment portfolios. In this study, we focus on the elderly for whom medical spending represents a substantial risk. We exploit the exogenous reduction in prescription drug spending risk because of the introduction of Medicare Part D in the U.S. in 2006 to identify the causal effect of medical spending risk on portfolio choice. Consistent with theory, we find that Medicare-eligible persons increased risky investment after the introduction of prescription drug coverage, relative to a younger, ineligible cohort. Copyright © 2016 John Wiley & Sons, Ltd.

Cost savings impact of a pharmacist-initiated teleservice program for Medicare Part D reviews

OBJECTIVES

To (a) determine potential cost savings of a pharmacy outreach teleservice program conducting Medicare Part D plan reviews for a large population of beneficiaries allowing for comparison of multiple preferences; and (b) explore client demographic comparisons, plan features, and stratification by cost and number of medications.

METHODS

Retrospective cohort evaluation of a Medicare D review service during open enrollment period (October 15 to December 7, 2012). Reviews were conducted at a university-based pharmacy outreach program in Massachusetts and completed by pharmacists (17%), case managers (52%), and students (31%). Recommendations were created by entering medication regimens into the Medicare.gov plan finder, and factors including deductible, premium, and copayment or coinsurance, formulary restrictions, secondary assistance, and annual cost were considered. A comparison of the overall cost of the client's 2012 plan in 2013 with that of a lower-cost plan in the 2013 benefit year determined potential cost savings.

RESULTS

Demographic data were available for 1062 individuals, with the majority being women (66%), an overall mean age of 73 years, and most living in a single household. Clients (75%) were taking 5 or more medications. Lower-cost plans were recommended for 61% of clients with a median cost savings valued at $538 per member, per year. Cost was the leading consideration for plan change (87.4%), followed by deductible (32.7%) and premium (30.1%). Cost savings were analyzed by evaluating current plan versus alternate plan by sex, age, client type (repeat vs. referred vs. new), and according to number of medications. Lower-cost plans were identified for 75% of new members. Individuals taking 0-14 medications had a cost savings of approximately $833 per client per year.

CONCLUSION

Teleservice pharmacy outreach programs create value by identifying therapeutically comparable alternative plans and reducing plan spending while efficiently consulting for a large number of Medicare Part D beneficiaries statewide.

Subsidies for Oral Chemotherapy and Use of Immunomodulatory Drugs Among Medicare Beneficiaries With Myeloma

Purpose The low-income subsidy (LIS) substantially lowers out-of-pocket costs for qualifying Medicare Part D beneficiaries who receive orally administered chemotherapy. We examined the association of LIS with the use of novel oral immunomodulatory drugs (IMiDs; lenalidomide and thalidomide) among beneficiaries with myeloma, who can receive either orally administered or parenteral (bortezomib-based) therapy. Methods Using SEER-Medicare data, we identified Part D beneficiaries diagnosed with myeloma in 2007 to 2011. In multivariable models adjusted for sociodemographic and clinical characteristics, we analyzed associations between the LIS and use of IMiD-based therapy, delays between IMiD refills, and select health outcomes during the first year of therapy. Results Among 3,038 beneficiaries, 41% received first-line IMiDs. Median out-of-pocket cost for the first IMiD prescription was $3,178 for LIS nonrecipients and $3 for LIS recipients, whereas the respective median costs for the first year of therapy were $5,623 and $6, respectively. Receipt of the LIS was associated with a 32% higher (95% CI, 16% to 47%) probability of receiving IMiDs among beneficiaries age 75 to 84 years and a significantly lower risk of delays between refills in all age groups (adjusted relative risk, 0.54; 95% CI, 0.32 to 0.92). Duration of therapy did not significantly differ between LIS recipients and nonrecipients (median, 7.6 months). Patients treated with IMiDs had significantly fewer emergency department visits and hospitalizations compared with patients receiving bortezomib (without IMiDs), but 1-year overall survival and cumulative Medicare costs were similar. Conclusion Medicare beneficiaries with myeloma who do not receive LISs face a substantial financial barrier to accessing orally administered anticancer therapy, warranting urgent attention from policymakers. Limiting out-of-pocket costs for expensive anticancer drugs like the IMiDs may improve access to oral therapy for patients with myeloma.

In-gap discounts in Medicare Part D and specialty drug use

OBJECTIVES

Specialty drugs can bring significant benefits to patients, but they can be expensive. Medicare Part D plans charge relatively high cost-sharing costs for specialty drugs. A provision in the Affordable Care Act reduced cost sharing in the Part D coverage gap phase in an attempt to mitigate the financial burden of beneficiaries with high drug spending. We examined the early impact of the Part D in-gap discount on specialty cancer drug use and patients' out-of-pocket (OOP) spending.

STUDY DESIGN

Natural experimental design.

METHODS

We compared changes in outcomes before and after the in-gap discount among beneficiaries with and without low-income subsidies (LIS). Beneficiaries with LIS, who were not affected by the in-gap discount, made up the control group. We studied a random sample of elderly standalone prescription drug plan enrollees with relatively uncommon cancers (eg, leukemia, skin, pancreas, kidney, sarcomas, and non-Hodgkin lymphoma) between 2009 and 2013. We constructed 4 outcome variables annually: 1) use of any specialty cancer drug, 2) the number of specialty cancer drug fills, 3) total specialty drug spending, and 4) OOP spending for specialty cancer drugs.

RESULTS

The in-gap discount did not influence specialty cancer drug use, but reduced annual OOP spending for specialty cancer drugs among users without LIS by $1108.

CONCLUSIONS

In-gap discounts in Part D decreased patients' financial burden to some extent, but resulted in no change in specialty drug use. As demand for specialty drugs increases, it will be important to ensure patients' access to needed drugs, while simultaneously reducing their financial burden.

Impact of formulary restrictions on medication use and costs

OBJECTIVES

To evaluate the effects of formulary restrictions on utilization and costs of oral hypoglycemic agents (OHAs), statins, and renin-angiotensin system (RAS) antagonists among low-income subsidy (LIS) recipients in Medicare Part D plans.

STUDY DESIGN

We analyzed a 5% sample of 2012 Medicare data from the Chronic Conditions Data Warehouse together with a customized dataset capturing beneficiaries' histories of plan assignment.

METHODS

We constructed 3 nonexclusive study cohorts comprising of users of OHAs, statins, and RAS antagonists. Eligible study subjects were LIS recipients randomized to benchmark plans. Formulary restrictions of interest were noncoverage, prior authorization, and step therapy. Study outcomes included generic dispensing rate (GDR), mean cost per prescription fill, and medication adherence based on proportion of days covered (PDC). Random intercept regression models were performed to estimate the effects of formulary restrictions on the study outcomes by drug class.

RESULTS

After covariate adjustment, beneficiaries who were subject to formulary restrictions on brand name pioglitazone and single-source brand name dipeptidyl peptidase-4 inhibitors (saxagliptin, sitagliptin, and sitagliptin-metformin) had a GDR 3 percentage points higher and a cost per prescription fill $10.8 less, but similar PDC compared with those who faced no restrictions. Restricting access to brand name atorvastatin and single-source brand name statins (rosuvastatin and ezetimibe-simvastatin) was associated with a GDR 14.9 percentage points higher and a cost per prescription fill $29.6 less, but with no impact on PDC. Restricting use of single-source brand name RAS antagonists (olmesartan, valsartan, and valsartan-hydrochlorothiazide) was associated with a GDR 15.0 percentage points higher, a cost per prescription fill $27.2 less, and a PDC 1.3 percentage points lower.

CONCLUSIONS

Placing formulary restrictions on brand name drugs shifts utilization toward generic drugs, lowers the overall cost per prescription fill, and has minimal impact on overall adherence for OHAs, statins, and RAS antagonists among LIS recipients.

Does the offer of free prescriptions increase generic prescribing?

OBJECTIVES

To test if offering zero generic co-pays for oral antidiabetic drugs (OADs) and statins increases generic dispensing for low-income subsidy (LIS) recipients with diabetes enrolled in Medicare Part D.

STUDY DESIGN

We analyzed a natural experiment in which LIS recipients were randomized to Part D plans in 2008. Some plans placed selected generic OADs and statins on zero co-pay tiers whereas others did not. Randomization eliminated selection effects which could bias the study findings.

METHODS

We analyzed a 5% random sample of Medicare beneficiaries with diabetes from the Chronic Condition Data Warehouse using Part D claims, formulary provisions, and co-pay tiers together with a special file prepared by CMS that identified all randomly assigned LIS recipients in 2008. We calculated proportions using generic drugs in the 2 classes and annual days' supply among users in plans with and without zero co-pay tiers for the country as a whole and California (where zero co-pay plans were particularly popular).

RESULTS

We found that the demand for generic OADs was not significantly different in plans with and without zero co-pay tiers. By contrast, a large difference was observed in the percent of LIS recipients using generic statins in plans with zero co-pay tiers (61.4% vs 54.6%; P <.01). However, the difference disappeared once we controlled for formulary restrictions on the most popular brand statin at the time (Lipitor).

CONCLUSIONS

This cautionary tale suggests that policy makers should give greater consideration to formulary provisions when evaluating the effects of free generics in value-based insurance designs.

Myopic and Forward Looking Behavior in Branded Oral Anti-Diabetic Medication Consumption: An Example from Medicare Part D

We evaluate consumption responses to the non-linear Medicare Part D prescription drug benefit. We compare propensity-matched older patients with diabetes and Part D Standard or low-income-subsidy (LIS) coverage. We evaluate monthly adherence to branded oral anti-diabetics, with high end-of-year donut hole prices (>$200) for Standard patients and consistent, low (≤$6) prices for LIS. As an additional control, we examine adherence to generic anti-diabetics, with relatively low, consistent prices for Standard patients. If Standard patients are forward looking, they will reduce branded adherence in January, and LIS-Standard differences will be constant through the year. Contrary to this expectation, branded adherence is lower for Standard patients in January and diverges from LIS as the coverage year progresses. Standard-LIS generic adherence differences are minimal. Our findings suggest that seniors with chronic conditions respond myopically to the nonlinear Part D benefit, reducing consumption in response to high deductible, initial coverage and gap prices. Thus, when the gap is fully phased out in 2020, cost-related nonadherence will likely remain in the face of higher spot prices for more costly branded medications. These results contribute to studies of Part D plan choice and medication adherence that suggest that seniors may not make optimal healthcare decisions. Copyright © 2016 John Wiley & Sons, Ltd.

Did Medicare Part D reduce mortality?

We investigate the implementation of Medicare Part D and estimate that this prescription drug benefit program reduced elderly mortality by 2.2% annually. This was driven primarily by a reduction in cardiovascular mortality, the leading cause of death for the elderly. There was no effect on deaths due to cancer, a condition whose drug treatments are covered under Medicare Part B. We validate these results by demonstrating that the changes in drug utilization following the implementation of Medicare Part D match the mortality patterns we observe. We calculate that the value of the mortality reduction is equal to $5 billion per year.

Issues Confronting Rural Pharmacies after a Decade of Medicare Part D

Purpose. The RUPRI Center for Rural Health Policy Analysis has been monitoring the status of rural independent pharmacies since the implementation of Medicare Part D in 2005. After a decade of Part D, we reassess in this brief the issues that concern rural pharmacies and may ultimately challenge their provision of services. This reassessment is based on survey responses from rural pharmacists. Key Findings: (1) Rural pharmacists indicated that two challenges--direct and indirect remuneration (DIR) fees, and delayed maximum allowable cost (MAC) adjustment--ranked highest on scales of both magnitude and immediacy. Nearly eighty (79.8) percent of respondents reported DIR fees as a very large magnitude challenge, with 83.3 percent reporting this as a very immediate challenge. Seventy-eight percent of respondents reported MACs not being updated quickly enough to reflect changes in wholesale drug costs as a very large magnitude challenge, with 79.7 percent indicating it as a very immediate challenge. (2) Medicare Part D continues to be a concern for rural pharmacies--58.8 percent of pharmacists said being an out-of-network pharmacy for Part D plans was a very large magnitude challenge (an additional 29.0 percent said large magnitude) and 60.5 percent said it was a very immediate challenge (an additional 28.1 percent said moderately immediate). (3) Pharmacy staffing, competition from pharmacy chains, and contracts for services for Medicaid patients were less likely to be reported as significant or immediate challenges.

Anticipatory Behavior in Response to Medicare Part D's Coverage Gap

Under the standard Medicare Part D benefit structure, copayments for medications change discontinuously at certain levels of accumulative drug spending. Beneficiaries pay 25% of the cost of medications in the initial phase, 100% in the coverage gap, and 5% in the catastrophic phase. We examine whether individuals anticipate these copayment changes and adjust their consumption in advance. We use variation in birth-months of beneficiaries who enroll in Part D plans when they first turn 65. Birth-months generate exogenous variation in the end-of-year price because those who enroll earlier in the year are more likely to reach the coverage gap than those who enroll later. We study the impact of variation in end-of-year price on the first three months of medication use immediately following enrollment. We use difference-in-differences to adjust for seasonal trends in use, by comparing our main study group with those who receive low-income subsidies, and therefore do not face a coverage gap. We find strong evidence of anticipatory behavior, with an implied elasticity with respect to future prices ranging from -0.2 to -0.5. In addition, we find that beneficiaries modify their consumption by changing the quantity of prescriptions filled, instead of switching between brand-name and generic drugs. Copyright © 2016 John Wiley & Sons, Ltd.

Reducing out-of-pocket cost barriers to specialty drug use under Medicare Part D: addressing the problem of "too much too soon"

OBJECTIVES

Medicare Part D specialty drug users not qualifying for low-income subsidies (non-LIS beneficiaries) face high and variable cost sharing during the calendar year. We examined their out-of-pocket (OOP) cost patterns under the existing Part D cost-sharing policies and proposed changes to these policies.

METHODS

Using 100% Medicare claims data from 2012, we examined mean annual and monthly OOP drug costs for Medicare Part D patients who were full-year users of Part D specialty drugs for rheumatoid arthritis (RA) (n = 1063), multiple sclerosis (MS) (n = 2256), or chronic myeloid leukemia (CML) (n = 1135) under existing policy. Using the same data, we simulated costs under both proposed Medicare Payment Advisory Commission (MedPAC) policy recommendations and our own recommendations.

RESULTS

In 2012, our sample faced mean annual cumulative OOP drug costs (for all medications) of $3949 (RA), $5238 (MS), and $6322 (CML). Mean OOP costs were $977 (RA), $1613 (MS), and $2456 (CML) in January alone. A substantial proportion of total annual OOP prescription spending also occurred during the catastrophic coverage phase (RA: $1229 [31%]; MS: $2456 [47%]; CML: $3546 [56%]). Under proposed MedPAC changes, patients would have faced maximum annual OOP spending of $4700, but mean OOP costs in January and February would have been higher compared with the existing policy. Under our proposed strategy, OOP costs would have been spread evenly over 12 months (≤$392 per month). The potential incremental costs of our proposed strategy would have been $23.55 per non-LIS Part D beneficiary per year.

CONCLUSIONS

The existing Part D cost-sharing structure creates a substantial financial burden for specialty drug users, especially early in the year. Implementing both annual and monthly OOP maximum spending limits would result in lower, more consistent OOP costs, potentially increasing patients' ability to access treatments for life-threatening, chronic, and rare diseases.

Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures. Final rule

This final rule revises the procedures that the Department of Health and Human Services (HHS) follows at the Administrative Law Judge (ALJ) level for appeals of payment and coverage determinations for items and services furnished to Medicare beneficiaries, enrollees in Medicare Advantage (MA) and other Medicare competitive health plans, and enrollees in Medicare prescription drug plans, as well as appeals of Medicare beneficiary enrollment and entitlement determinations, and certain Medicare premium appeals. In addition, this final rule revises procedures that the Department of Health and Human Services follows at the Centers for Medicare & Medicaid Services (CMS) and the Medicare Appeals Council (Council) levels of appeal for certain matters affecting the ALJ level.

Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements. Final rule

This major final rule addresses changes to the physician fee schedule and other Medicare Part B payment policies, such as changes to the Value Modifier, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This final rule also includes changes related to the Medicare Shared Savings Program, requirements for Medicare Advantage Provider Networks, and provides for the release of certain pricing data from Medicare Advantage bids and of data from medical loss ratio reports submitted by Medicare health and drug plans. In addition, this final rule expands the Medicare Diabetes Prevention Program model.

Impact of Cost Sharing on Therapeutic Substitution: The Story of Statins in 2006

BACKGROUND

Cost sharing is widely used to encourage therapeutic substitution. This study aimed to examine the impact of increases in patient cost-sharing differentials for brand name and generic drugs on statin utilization on entry into the Medicare Part D coverage gap.

METHOD AND RESULTS

Using 5% Medicare Chronic Condition Warehouse files from 2006, this quasi-experimental study examined patients with hyperlipidemia who filled prescriptions for atorvastatin or rosuvastatin between January and March 2006. Propensity score matching and difference-in-difference regressions were used to compare changes in statin utilization for the study group (patients who were not eligible for low-income subsidies [non-LIS] and had generic-only gap coverage) to those of a control group (LIS patients who faced the same cost sharing before and during the Part D coverage gap). In the final sample, 801 patients in the study group were matched to 801 patients in the control group. We found that, compared to the control group, the study group had a larger decline in any monthly brand-name statin use (-0.24 30-day fills, P<0.001). This was only partially offset by increased monthly generic statin use (+0.06 30-day fill, P<0.001), with an overall drop in any monthly statin use (-0.18 30-day fills, P<0.001). Overall adherence with statins declined (OR 0.81, P<0.001), and statin discontinuation increased (OR 1.62, P<0.001) in the study group as compared to the control group.

CONCLUSIONS

Increases in cost-sharing differentials for brand name and generic drugs on coverage gap entry were associated with discontinuation of statins in Medicare Part D patients with hyperlipidemia.

The anticipatory effects of Medicare Part D on drug utilization

While health care policies are frequently signed into law well before they are implemented, such lags are ignored in most empirical work. This paper demonstrates the importance of implementation lags in the context of Medicare Part D, the prescription drug benefit that took effect two years after it was signed into law. Exploiting the differential responses of chronic and acute drugs to anticipated future prices, I show that individuals reduced drug utilization for chronic but not acute drugs in anticipation of Part D's implementation. Accounting for this anticipatory response substantially reduces the estimated total treatment effect of Part D.

Association between payments from manufacturers of pharmaceuticals to physicians and regional prescribing: cross sectional ecological study

OBJECTIVE

 To examine the association between payments made by the manufacturers of pharmaceuticals to physicians and prescribing by physicians within hospital referral regions.

DESIGN

 Cross sectional analysis of 2013 and 2014 Open Payments and Medicare Part D prescribing data for two classes of commonly prescribed, commonly marketed drugs: oral anticoagulants and non-insulin diabetes drugs, overall and stratified by physician and payment type.

SETTING

 306 hospital referral regions, United States.

PARTICIPANTS

 45 949 454 Medicare Part D prescriptions written by 623 886 physicians to 10 513 173 patients for two drug classes: oral anticoagulants and non-insulin diabetes drugs.

MAIN OUTCOME MEASURES

 Proportion, or market share, of marketed oral anticoagulants and non-insulin diabetes drugs prescribed by physicians among all drugs in each class and within hospital referral regions.

RESULTS

 Among 306 hospital referral regions, there were 977 407 payments to physicians totaling $61 026 140 (£46 174 600; €54 632 500) related to oral anticoagulants, and 1 787 884 payments totaling $108 417 616 related to non-insulin diabetes drugs. The median market share of the hospital referral regions was 21.6% for marketed oral anticoagulants and 12.6% for marketed non-insulin diabetes drugs. Among hospital referral regions, one additional payment (median value $13, interquartile range, $10-$18) was associated with 94 (95% confidence interval 76 to 112) additional days filled of marketed oral anticoagulants and 107 (89 to 125) additional days filled of marketed non-insulin diabetes drugs (P<0.001). Payments to specialists were associated with greater prescribing of marketed drugs than payments to non-specialists (212 v 100 additional days filled per payment of marketed oral anticoagulants, 331 v 114 for marketed non-insulin diabetes drugs, P<0.001). Payments for speaker and consulting fees for non-insulin diabetes drugs were associated with greater prescribing of marketed drugs than payments for food and beverages or educational materials (484 v 110, P<0.001).

CONCLUSIONS AND STUDY LIMITATIONS

 Payments by the manufacturers of pharmaceuticals to physicians were associated with greater regional prescribing of marketed drugs among Medicare Part D beneficiaries. Payments to specialists and payments for speaker and consulting fees were predominantly associated with greater regional prescribing of marketed drugs than payments to non-specialists or payments for food and beverages, gifts, or educational materials. As a cross sectional, ecological study, we cannot prove causation between payments to physicians and increased prescribing. Furthermore, our findings should be interpreted only at the regional level. Our study is limited to prescribing by physicians and the two drug classes studied.

Association of Part D coverage gap with COPD medication adherence

OBJECTIVES

This study assessed the association of the Medicare Part D coverage gap with medication adherence among beneficiaries with chronic obstructive pulmonary disease (COPD).

STUDY DESIGN

Retrospective observational study based on Medicare claims data.

METHODS

A 5% random sample of Medicare claims data (2006-2010) was used in this study. Beneficiaries diagnosed with COPD and treated with long-acting bronchodilators (LABDs) were assigned to an exposure cohort (at risk of the coverage gap) or a control cohort (otherwise). The exposure and control cohorts were matched using high-dimensional propensity scores. Adherence was defined as ≥80% of the proportion of days covered by LABDs. Logistic regressions controlling for unbalanced covariates post matching were applied to assess the association of the coverage gap with adherence.

RESULTS

The final matched exposure and control cohorts each included 4147 patient-year observations with about 42% and 46% of them adherent to LABDs, respectively. About 17% of the exposure cohort hit the coverage gap after October 31. Logistic regression showed that, compared with the control cohort, the beneficiaries in the exposure cohort had a significantly lower likelihood of being adherent if they hit the coverage gap later in the year (odds ratio [OR], 0.603; 95% CI, 0.493-0.738), or had a lower likelihood without statistical significance if otherwise (OR, 0.931; 95% CI, 0.846-1.024).

CONCLUSIONS

The findings suggest that the Part D coverage gap was associated with lower adherence in patients with COPD, which may serve as evidentiary support for phasing out the coverage gap by 2020.

Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance

We study choice over prescription insurance plans by the elderly using government administrative data to evaluate how these choices evolve over time. We find large "foregone savings" from not choosing the lowest cost plan that has grown over time. We develop a structural framework to decompose the changes in "foregone welfare" from inconsistent choices into choice set changes and choice function changes from a fixed choice set. We find that foregone welfare increases over time due primarily to changes in plan characteristics such as premiums and out-of-pocket costs; we estimate little learning at either the individual or cohort level.

Review of outcomes associated with restricted access to atypical antipsychotics

OBJECTIVES

Cost containment policies, such as prior authorization (PA), have increasingly been used by formulary decision makers to manage drug spending of the atypical antipsychotic (AAP) drug class. However, these drug cost containment policies may result in cost shifting rather than cost savings. Given the interest in coordination of care, the objective of this study was to evaluate the impact of restricted access to AAPs on healthcare costs and health outcomes in individuals with schizophrenia or bipolar disorder.

STUDY DESIGN

Narrative literature review.

METHODS

A literature search was conducted using MEDLINE (via PubMed) for studies published between January 1993 and December 2013.

RESULTS

A total of 15 published studies were identified that evaluated restricted access to AAPs in regard to healthcare costs or health outcomes: 11 studies assessed PAs, 2 studies assessed carve-outs, 1 study assessed a payment limit (cap), and 1 study assessed Medicare Part D cost sharing. Among 8 studies evaluating changes in pharmacy costs and clinical outcomes, 5 studies reported that formulary restrictions were associated with pharmacy cost savings and increases in healthcare utilization or treatment discontinuation. Of the 4 studies that measured overall cost changes, 3 studies reported increases in overall cost burden and 1 study showed modest cost savings associated with formulary restrictions.

CONCLUSIONS

Study findings revealed there exists a gap in the literature as to whether restricted access to AAPs results in overall cost savings or, rather, shifts the cost burden from pharmacy spending to other parts of the healthcare system, such as service utilization.

How Did Medicare Part D Affect Racial and Ethnic Disparities in Drug Coverage?

OBJECTIVE

To examine the effect of Medicare Part D on racial/ethnic disparities in having any drug coverage and in sources of payment for drug expenditure.

METHODS

We used nationally representative data on whites, African-Americans, and Hispanics aged 55 and older from the 2002-2009 Medical Expenditure Panel Survey to analyze disparities in having any drug coverage and in sources of coverage for individuals aged 65 and older as compared with those for adults aged 55-63 without Medicare.

RESULTS

There was no disparity in the probability of drug coverage for African-American or Hispanic compared to white Medicare beneficiaries, before or after 2006. There were, however, differences in the sources of coverage. African-Americans and Hispanics over the age of 65 had lower rates of private coverage than whites. This disparity in private coverage was completely offset by minorities' higher rates of drug coverage through Medicaid before 2006 and through Part D since 2006. In contrast, among individuals aged 55-63, there are large and persistent disparities in the probability of having drug coverage throughout the period.

DISCUSSION

Pronounced racial/ethnic disparities in drug coverage in the years just before Medicare eligibility are eliminated by access to public coverage at age 65. This was true even before the introduction of Part D.

Determinants of U.S. Prescription Drug Utilization using County Level Data

Prescription drugs are the third largest component of U.S. healthcare expenditures. The 2006 Medicare Part D and the 2010 Affordable Care Act are catalysts for further growths in utilization becuase of insurance expansion effects. This research investigating the determinants of prescription drug utilization is timely, methodologically novel, and policy relevant. Differences in population health status, access to care, socioeconomics, demographics, and variations in per capita number of scripts filled at retail pharmacies across the U.S.A. justify fitting separate econometric models to county data of the states partitioned into low, medium, and high prescription drug users. Given the skewed distribution of per capita number of filled prescriptions (response variable), we fit the variance stabilizing Box-Cox power transformation regression models to 2011 county level data for investigating the correlates of prescription drug utilization separately for low, medium, and high utilization states. Maximum likelihood regression parameter estimates, including the optimal Box-Cox λ power transformations, differ across high (λ = 0.214), medium (λ = 0.942), and low (λ = 0.302) prescription drug utilization models. The estimated income elasticities of -0.634, 0.031, and -0.532 in high, medium, and low utilization models suggest that the economic behavior of prescriptions is not invariant across different utilization levels.

Medicare Part D and Portfolio Choice

This study evaluates the impact of medical expenditure risk on portfolio choice among the elderly. The risk of large medical expenditures can be substantial for elderly individuals and is only partially mitigated by access to health insurance. The presence of deductibles, copayments, and other cost-sharing mechanisms implies that medical spending risk can be viewed as an undiversifiable background risk. Economic theory suggests that increases in background risk reduce the optimal financial risk that an individual or household is willing to bear (Pratt and Zeckhauser 1987; Elmendorf and Kimball 2000). In this study, we evaluate this hypothesis by estimating the impact of the introduction of the Medicare Part D program, which significantly reduced prescription drug spending risk for seniors, on portfolio choice.

Coverage for hepatitis C drugs in Medicare Part D

OBJECTIVES

The recent arrival of new hepatitis C virus (HCV) drugs has brought fiscal pressures onto Medicare Part D; spending on HCV drugs in Part D jumped from $283 million in 2013 to $4.5 billion in 2014. We examined the current benefit designs for HCV drugs in Part D plans and analyzed patients' financial burden for those drugs.

STUDY DESIGN

A cross-sectional analysis of CMS' July 2015 Part D Plan Formulary File and the Wolters Kluwer Health Medi-Span Electronic Drug File v.2.

METHODS

We analyzed the type and amount of cost sharing for HCV drugs and the extent to which plans apply utilization management tools. We then estimated total out-of-pocket spending for beneficiaries to complete a course of treatment.

RESULTS

All Part D plans covered at least 1 recently introduced HCV drug, as of July 2015. Nearly all plans charged relatively high coinsurance and required prior authorization for new HCV drugs. For enrollees with no subsidy, the mean out-of-pocket spending needed to complete a course of treatment is substantial, ranging from $6297 to $10,889. For enrollees with a low-income subsidy, out-of-pocket spending varies between $10.80 and $1191.

CONCLUSIONS

Under the current Part D benefits, HCV drug users with no subsidy face sizable financial burdens, even with catastrophic coverage and the recent in-gap discount for brand name drugs. As baby boomers-the group most likely to have HCV-join Medicare, efforts should be made to ensure patient access to these needed drugs.

High cost sharing and specialty drug initiation under Medicare Part D: a case study in patients with newly diagnosed chronic myeloid leukemia

OBJECTIVES

Specialty drugs often offer medical advances but are frequently subject to high cost sharing. This is particularly true with Medicare Part D, where after meeting a deductible, patients without low-income subsidies (non-LIS) typically face 25% to 33% coinsurance (initial coverage phase with "specialty tier" cost sharing), followed by ~50% coinsurance (coverage gap phase), and then 5% coinsurance (catastrophic phase). Yet, no studies have examined the impact of such high cost sharing on specialty drug initiation under Part D. Oral tyrosine kinase inhibitors (TKIs) have revolutionized the treatment of chronic myeloid leukemia (CML), making it an apt case study.

STUDY DESIGN

A retrospective claims-based analysis utilizing 2011 to 2013 100% Medicare claims.

METHODS

TKI initiation rates and time to initiation were compared between fee-for-service non-LIS Part D patients newly diagnosed with CML and their LIS counterparts who faced nominal cost sharing of ≤ $5.

RESULTS

The first 30-day TKI fill "straddled" benefit phases, for a mean out-of-pocket cost of $2600 or more for non-LIS patients. Non-LIS patients were less likely than LIS patients to have a TKI claim within 6 months of diagnosis (45.3% vs 66.9%; P < .001) and those initiating a TKI took twice as long to fill it (mean = 50.9 vs 23.7 days; P < .001). Cox regressions controlling for sociodemographic, clinical, and plan characteristics confirmed descriptive findings (hazard ratio, 0.59; 95% CI, 0.45-0.76). Extensive sensitivity analyses confirmed the robustness of our findings.

CONCLUSIONS

High cost sharing was associated with reduced and/or delayed initiation of TKIs. We discuss policy strategies to reduce current financial barriers that adversely impact access to critical therapies under Medicare Part D.

The Effects of Cost Sharing on Adherence to Medications Prescribed for Concurrent Use: Do Definitions Matter?

BACKGROUND

Accurate estimates of the effects of cost sharing on adherence to medications prescribed for use together, also called concurrent adherence, are important for researchers, payers, and policymakers who want to reduce barriers to adherence for chronic condition patients prescribed multiple medications concurrently. But measure definition consensus is lacking, and the effects of different definitions on estimates of cost-related nonadherence are unevaluated.

OBJECTIVES

To (a) compare estimates of cost-related nonadherence using different measure definitions and (b) provide guidance for analyses of the effects of cost sharing on concurrent adherence.

METHODS

This is a retrospective cohort study of Medicare Part D beneficiaries aged 65 years and older who used multiple oral antidiabetics concurrently in 2008 and 2009. We compared patients with standard coverage, which contains cost-sharing requirements in deductible (100%), initial (25%), and coverage gap (100%) phases, to patients with a low-income subsidy (LIS) and minimal cost-sharing requirements. Data source was the IMS Health Longitudinal Prescription Database. Patients with standard coverage were propensity matched to controls with LIS coverage. Propensity score was developed using logistic regression to model likelihood of Part D standard enrollment, controlling for sociodemographic and health status characteristics. For analysis, 3 definitions were used for unadjusted and adjusted estimates of adherence: (1) patients adherent to All medications; (2) patients adherent on Average; and (3) patients adherent to Any medication. Analyses were conducted using the full study sample and then repeated in analytic subgroups where patients used (a) 1 or more costly branded oral antidiabetics or (b) inexpensive generics only.

RESULTS

We identified 12,771 propensity matched patients with Medicare Part D standard (N = 6,298) or LIS (N = 6,473) coverage who used oral antidiabetics in 2 or more of the same classes in 2008 and 2009. In this sample, estimates of the effects of cost sharing on concurrent adherence varied by measure definition, coverage type, and proportion of patients using more costly branded drugs. Adherence rates ranged from 37% (All: standard patients using 1+ branded) to 97% (Any: LIS using generics only). In adjusted estimates, standard patients using branded drugs had 0.63 (95% CI = 0.57-0.70) and 0.70 (95% CI = 0.63-0.77) times the odds of concurrent adherence using All and Average definitions, respectively. The Any subgroup was not significant (OR = 0.89, 95% CI = 0.87-1.17). Estimates also varied in the full-study sample (All: OR = 0.79, 95% CI = 0.74-0.85; Average: OR = 0.83, 95% CI = 0.77-0.89) and generics-only subgroup, although cost-sharing effects were smaller. The Any subgroup generated no significant estimates.

CONCLUSIONS

Different concurrent adherence measure definitions lead to markedly different findings of the effects of cost sharing on concurrent adherence, with All and Average subgroups sensitive to these effects. However, when more study patients use inexpensive generics, estimates of these effects on adherence to branded medications with higher cost-sharing requirements may be diluted. When selecting a measure definition, researchers, payers, and policy analysts should consider the range of medication prices patients face, use a measure sensitive to the effects of cost sharing on adherence, and perform subgroup analyses for patients prescribed more medications for which they must pay more, since these patients are most vulnerable to cost-related nonadherence.

Medicare program; changes to the requirements for Part D prescribers. Interim final rule with comment period

This interim final rule with comment period revises requirements related to beneficiary access to covered Part D drugs. Under these revised requirements, pharmacy claims and beneficiary requests for reimbursement for Medicare Part D prescriptions, written by prescribers other than physicians and eligible professionals who are permitted by state or other applicable law to prescribe medications, will not be rejected at the point of sale or denied by the plan if all other requirements are met. In addition, a plan sponsor will not reject a claim or deny a beneficiary request for reimbursement for a drug when prescribed by a prescriber who does not meet the applicable enrollment or opt-out requirement without first providing provisional coverage of the drug and individualized written notice to the beneficiary. This interim final rule with comment period also revises certain terminology to be consistent with existing policy and to improve clarity.