State Coverage and Reimbursement of Antiobesity Medications in Medicaid

This study examines state Medicaid coverage policies for antiobesity medications and their trends in Medicaid reimbursement from 2011 to 2022.

Changes in Use of Hepatitis C Direct-Acting Antivirals After Access Restrictions Were Eased by State Medicaid Programs

Importance

Direct-acting antivirals (DAAs) are safe and highly effective for curing hepatitis C virus (HCV) infection, but their high cost led certain state Medicaid programs to impose coverage restrictions. Since 2015, many of these restrictions have been lifted voluntarily in response to advocacy or because of litigation.

Objective

To estimate how the prescribing of DAAs to Medicaid patients changed after states eased access restrictions.

Design, Setting, and Participants

This modified difference-in-differences analysis of 39 state Medicaid programs included Medicaid beneficiaries who were prescribed a DAA from January 1, 2015, to December 31, 2019. DAA coverage restrictions were measured based on a series of cross-sectional assessments performed from 2014 through 2022 by the US National Viral Hepatitis Roundtable and the Center for Health Law and Policy Innovation.

Exposure

Calendar quarter when states eased or eliminated 3 types of DAA coverage restrictions: limiting treatment to patients with severe liver disease, restricting use among patients with active substance use, and requiring prescriptions to be written by or in consultation with specialists. States with none of these restrictions at baseline were excluded.

Main Outcomes and Measures

Quarterly number of HCV DAA treatment courses per 100 000 Medicaid beneficiaries.

Results

Of 39 states, 7 (18%) eliminated coverage restrictions, 25 (64%) eased restrictions, and 7 (18%) maintained the same restrictions from 2015 to 2019. During this period, the average quarterly use of DAAs increased from 669 to 3601 treatment courses per 100 000 Medicaid beneficiaries. After states eased or eliminated restrictions, the use of DAAs increased by 966 (95% CI, 409-1523) treatment courses per 100 000 Medicaid beneficiaries each quarter compared with states that did not ease or eliminate restrictions.

Conclusions and Relevance

The results of this study suggest that there was greater use of DAAs after states relaxed coverage restrictions related to liver disease severity, sobriety, or prescriber specialty. Further reductions or elimination of these rules may improve access to a highly effective public health intervention for patients with HCV.

Spending on Targeted Therapies for Duchenne Muscular Dystrophy

This study estimates public and private spending on genetically targeted treatments for Duchenne muscular dystrophy during years in which the drugs were marketed without completed confirmatory studies.

Use of Efficiency Frontiers to Align Prices and Clinical Benefits of Biologic Therapies for Plaque Psoriasis

Importance

The US lacks a systematic approach for aligning drug prices with clinical benefit, and traditional cost-effectiveness analysis (CEA) faces political obstacles. The efficiency frontier (EF) method offers policymakers an alternative approach.

Objective

To assess how the EF approach could align prices and clinical benefits of biologic medications for plaque psoriasis and estimate price reductions in the US vs 4 peer countries: Australia, Canada, France, and Germany.

Design and Setting

This health economic evaluation used the EF approach to compare the prices and clinical benefits of 11 biologics and 2 biosimilars for plaque psoriasis in the US, Australia, Canada, France, and Germany. Data were collected from February to March 2023 and analyzed from March to June 2023.

Main Outcome Measures

EFs were constructed based on each biologic's efficacy, measured using the Psoriasis Area and Severity Index (PASI) 90 response rate, and annual treatment cost as of January 2023; US costs were net of estimated manufacturer rebates. Prices based on the EF were compared with traditional CEA-based prices calculated by the Institute for Clinical and Economic Review at a threshold of $150 000 per quality-adjusted life-year gained.

Results

Among 13 biologics, PASI 90 response rates ranged from 17.9% (etanercept) to 71.6% (risankizumab); US net annual treatment costs ranged from $1664 (infliximab-dyyb) to $79 277 (risankizumab). The median (IQR) net annual treatment cost was higher in the US ($34 965 [$20 493-$48 942]) than prerebate costs in Australia ($9179 [$6691-$12 688]), Canada ($15 556 [$13 017-$16 112]), France ($9478 [$6637-$11 678]), and Germany ($13 829 [$13 231-$15 837]). The US EF included infliximab-dyyb (PASI 90: 57.4%; annual cost: $1664), ixekizumab (PASI 90: 70.8%; annual cost: $33 004), and risankizumab (PASI 90: 71.6%; annual cost: $79 277). US prices for psoriasis biologics would need to be reduced by a median (IQR) of 71% (31%-95%) to align with those estimated using the EF; the same approach would yield smaller price reductions in Canada (41% [6%-57%]), Australia (36% [0%-65%]), France (19% [0%-67%]), and Germany (11% [8%-26%]). Except for risankizumab, the EF-based prices were lower than the prices based on traditional CEA.

Conclusions and Relevance

This economic evaluation showed that for plaque psoriasis biologics, using an EF approach to negotiate prices could lead to substantial price reductions and better align prices with clinical benefits. US policymakers might consider using EFs to achieve prices commensurate with comparative clinical benefits, particularly for drug classes with multiple therapeutic alternatives for which differences can be adequately summarized by a single outcome measurement.

Direct-to-Consumer Drug Company Pharmacies

The recent launch of direct-to-consumer pharmacy LillyDirect prompts the author of this Viewpoint to consider why it was created and also to raise concerns about allowing manufacturers to sell their drugs directly to patients.

Addressing High Drug Prices by Reforming Pharmacy Benefit Managers

Recently, Congress has focused on reforms to address pharmacy benefit managers' (PBMs) role in high drug prices for patients. Congress must not excessively restrict PBMs' ability to negotiate with manufacturers; alternatively, reforms could be paired with other policies that address the high prices of brand-name drugs.

Identifying therapeutic alternatives in Medicare drug price negotiation: The case of etanercept

As the Centers for Medicare & Medicaid Services (CMS) navigates the process of negotiating drug prices, it plans to compare the cost, safety, and effectiveness of each drug with its therapeutic alternatives. How CMS selects therapeutic alternatives is a consequential decision, and there remains uncertainty about their methodology. To understand the challenges CMS will face in selecting therapeutic alternatives, we developed a methodology that leverages clinical guidelines by US medical professional associations to identify potential therapeutic alternatives for etanercept, one of the first 10 drugs selected for Medicare price negotiation. For each of etanercept's 5 US Food and Drug Administration-approved indications, we identified all drugs with the same mechanism of action as etanercept and considered drugs with different mechanisms if they were recommended in place of etanercept at the same treatment stage, or if there was no strong comparative safety or effectiveness evidence that the drug differed from etanercept. We identified 22 potential therapeutic alternatives to etanercept, including 4 drugs with the same mechanism, 10 biologics with different mechanisms, and 8 small-molecule drugs. We faced several challenges in selecting therapeutic alternatives using clinical guidelines, such as how to reconcile strong recommendations that were based on weak evidence and how to consider combination therapies. This exercise demonstrates the complex considerations that CMS will face as it negotiates drug prices based on therapies' cost, safety, and effectiveness relative to therapeutic alternatives.

Patient Out-of-Pocket Costs for Biologic Drugs After Biosimilar Competition

Importance

Biologic drugs account for a growing share of US pharmaceutical spending. Competition from follow-on biosimilar products (subsequent versions that have no clinically meaningful differences from the original biologic) has led to modest reductions in US health care spending, but these savings may not translate to lower out-of-pocket (OOP) costs for patients.

Objective

To investigate whether biosimilar competition is associated with lower OOP spending for patients using biologics.

Design, Setting, and Participants

This cohort study used a national commercial claims database (Optum Clinformatics Data Mart) to identify outpatient claims for 1 of 7 clinician-administered biologics (filgrastim, infliximab, pegfilgrastim, epoetin alfa, bevacizumab, rituximab, and trastuzumab) from January 2009 through March 2022. Claims by commercially insured patients younger than 65 years were included.

Exposure

Year relative to first biosimilar availability and use of original or biosimilar version.

Main Outcomes and Measures

Patients' annual OOP spending on biologics for each calendar year was determined, and OOP spending per claim between reference biologic and biosimilar versions was compared. Two-part regression models assessed for differences in OOP spending, adjusting for patient and clinical characteristics (age, sex, US Census region, health plan type, diagnosis, and place of service) and year relative to initial biosimilar entry.

Results

Over 1.7 million claims from 190 364 individuals (median [IQR] age, 53 [42-59] years; 58.3% females) who used at least 1 of the 7 biologics between 2009 and 2022 were included in the analysis. Over 251 566 patient-years of observation, annual OOP costs increased before and after biosimilar availability. Two years after the start of biosimilar competition, the adjusted odds ratio of nonzero annual OOP spending was 1.08 (95% CI, 1.04-1.12; P < .001) and average nonzero annual spending was 12% higher (95% CI, 10%-14%; P < .001) compared with the year before biosimilar competition. After biosimilars became available, claims for biosimilars were more likely than reference biologics to have nonzero OOP costs (adjusted odds ratio, 1.13 [95% CI, 1.11-1.16]; P < .001) but had 8% lower mean nonzero OOP costs (adjusted mean ratio, 0.92 [95% CI, 0.90-0.93; P < .001). Findings varied by drug.

Conclusions and Relevance

Findings of this cohort study suggest that biosimilar competition was not consistently associated with lower OOP costs for commercially insured outpatients, highlighting the need for targeted policy interventions to ensure that the savings generated from biosimilar competition translate into increased affordability for patients who need biologics.

Availability and Cost of Expensive and Common Generic Prescription Drugs: A Cross-sectional Analysis of Direct-to-Consumer Pharmacies

BACKGROUND

Direct-to-consumer (DTC) pharmacies sell generic prescription drugs, often at lower prices than traditional retail pharmacies; however, not all drugs are available, and prices vary.

OBJECTIVE

To determine the availability and cost of generic drugs at DTC pharmacies.

DESIGN

Cross-sectional study.

SETTING

Five national DTC pharmacies in April and May 2023.

PARTICIPANTS

Each qualifying form of 100 generic drugs with the highest cost-per-patient (expensive) and the 50 generic drugs with the highest number of patients (common) in Medicare Part D in 2020 MAIN MEASURES: Availability of these drugs and the lowest DTC pharmacy price for a standardized drug strength and supply (e.g., 30 pills), compared to GoodRx retail pharmacy prices.

KEY RESULTS

Of the 118 expensive generic dosage forms, 94 (80%) were available at 1 or more DTC pharmacies; out of 52 common generic dosage forms, 51 (98%) were available (p < 0.001). Of the 88 expensive generics available in comparable quantities and strengths across pharmacies, 42 (47%) had the lowest cost at Amazon, 23 (26%) at Mark Cuban Cost Plus Drug Company, 13 (14%) at Health Warehouse, and 12 (13%) at Costco; for 51 common generic formulations, 16 (31%) had the lowest cost at Costco, 14 (27%) at Amazon, 10 (20%) at Walmart, 6 (12%) at Health Warehouse, and 5 (10%) at Mark Cuban Cost Plus Drug Company. For the 77 expensive generics with available GoodRx retail pharmacy prices, the median cost savings at DTC pharmacies were $231 (95% CI, $129-$792) or 76% (IQR, 53-91%); for 51 common generics, savings were $19 (95% CI, $10-$34) or 75% (IQR, 67-83%).

CONCLUSIONS

Many of the most expensive generic drugs are unavailable at direct-to-consumer pharmacies. Meanwhile, less expensive, commonly used generics are widely available, but drug prices vary by pharmacy and savings are modest, requiring patients to shop around for the lowest cost.

Association between changes in prices and out-of-pocket costs for brand-name clinician-administered drugs

OBJECTIVE

To determine whether annual changes in prices for clinician-administered drugs are associated with changes in patient out-of-pocket costs.

DATA SOURCES AND STUDY SETTING

National commercial claims database, 2009 to 2018.

STUDY DESIGN

In a serial, cross-sectional study, we calculated the annual percent change in manufacturer list prices and net prices after rebates. We used two-part generalized linear models to assess the relationship between annual changes in price with (1) the percentage of individuals incurring any out-of-pocket costs and (2) the percent change in median non-zero out-of-pocket costs.

DATA COLLECTION/EXTRACTION METHODS

We created annual cohorts of privately insured individuals who used one of 52 brand-name clinician-administered drugs.

PRINCIPAL FINDINGS

List prices increased 4.4%/yr (interquartile range [IQR], 1.1% to 6.0%) and net prices 3.3%/yr (IQR, 0.3% to 5.5%). The median percentage of patients with any out-of-pocket costs increased from 38% in 2009 to 48% in 2018, and median non-zero annual out-of-pocket costs increased by 9.6%/yr (IQR, 4.1% to 15.4%). There was no association between changes in prices and out-of-pocket costs for individual drugs.

CONCLUSIONS

From 2009 to 2018, prices and out-of-pocket costs for brand-name clinician-administered drugs increased, but these were not directly related for individual drugs. This may be due to changes to insurance benefit design and private insurer drug reimbursement rates.

Cost of Exempting Sole Orphan Drugs From Medicare Negotiation

Importance

The Inflation Reduction Act (IRA) requires Medicare to negotiate prices for some high-spending drugs but exempts drugs approved solely for the treatment of a single rare disease.

Objective

To estimate Medicare spending and global revenues for drugs that might have been exempt from negotiation from 2012 to 2021.

Design, Setting, and Participants

This cross-sectional study analyzed drugs that met the IRA threshold for price negotiation (Medicare spending >$200 million/y) in any year from 2012 to 2021 and had an Orphan Drug Act designation. We stratified drugs into 4 mutually exclusive categories: approved for a single rare disease (sole orphan), approved for multiple rare diseases (multiorphan), initially approved for a rare disease and subsequently approved for a nonrare disease (orphan first), and initially approved for a nonrare disease and subsequently approved for a rare disease (non-orphan first).

Outcomes

The primary outcomes were the number of sole orphan drugs, estimated Medicare spending on those drugs from 2012 to 2021, and global revenue since launch.

Results

Among 282 drugs, 95 (34%) were approved to treat at least 1 rare disease, including 25 sole orphan drugs (26%), 20 multiorphan drugs (21%), 13 orphan first drugs (14%), and 37 non-orphan first drugs (39%). From 2012 to 2021, Medicare spending on sole orphan drugs increased from $3.4 billion to $10.0 billion. Each year, a median (IQR) of $2.5 ($1.9-$2.6) billion in Medicare spending would have been excluded from price negotiation because of the sole orphan exemption. The cumulative global revenue of the median (IQR) sole orphan drug was $11 ($6.6-$19.2) billion.

Conclusions and Relevance

The sole orphan exemption will exclude billions of dollars of Medicare drug spending from price negotiation. The high level of global revenues achieved by these drugs, however, suggests that special exemption is unnecessary for them to achieve financial success. Congress could consider removing the sole orphan exemption to obtain additional savings for patients and taxpayers and to eliminate any potential disincentive for developing additional indications for these drugs.

Potential Medicare and Medicaid Savings on Anti-CD20 Therapy for Multiple Sclerosis

This cross-sectional study compares price data for ocrelizumab and rituximab to estimate the savings to Medicare and Medicaid if rituximab were used in the treatment of multiple sclerosis instead of the higher-priced ocrelizumab.

The Inflation Reduction Act and Access to High-Cost Cardiovascular Therapies

This Viewpoint discusses how the price negotiation for certain drugs under the Inflation Reduction Act will provide a unique opportunity to enhance access to therapies for older patients with cardiovascular conditions and diabetes.

Changes in Induced Medical and Procedural Abortion Rates in a Commercially Insured Population, 2018 to 2022 : An Interrupted Time-Series Analysis

BACKGROUND

During the COVID-19 pandemic, access to in-person care was limited, and regulations requiring in-person dispensing of mifepristone for medical abortions were relaxed. The effect of the pandemic and accompanying regulatory changes on abortion use is unknown.

OBJECTIVE

To estimate changes in the incidence rate of induced medical and procedural abortions.

DESIGN

Serial cross-sectional study with interrupted time-series analyses.

SETTING

Commercially insured persons in the United States.

PARTICIPANTS

Reproductive-aged women.

INTERVENTION

Onset of the COVID-19 pandemic in March 2020 and subsequent regulatory changes affecting the in-person dispensing requirement for mifepristone.

MEASUREMENTS

Monthly age-adjusted incidence rates of medical and procedural abortions were measured among women aged 15 to 44 years from January 2018 to June 2022. Medical abortions were classified as in-person or telehealth. Linear segmented time-series regression was used to calculate changes in abortion rates after March 2020.

RESULTS

In January 2018, the estimated age-adjusted monthly incidence rate of abortions was 151 per million women (95% CI, 142 to 161 per million women), with equal rates of medical and procedural abortions. After March 2020, there was an immediate 14% decrease in the monthly incidence rate of abortions (21 per million women [CI, 7 to 35 per million women]; P = 0.004), driven by a 31% decline in procedural abortions (22 per million women [CI, 16 to 28 per million women]; P < 0.001). Fewer than 4% of medical abortions each month were administered via telehealth.

LIMITATION

Only abortions reimbursed by commercial insurance were measured.

CONCLUSION

The incidence rate of procedural abortions declined during the COVID-19 pandemic, and this lower rate persisted after other elective procedures rebounded to prepandemic rates. Despite removal of the in-person dispensing requirement for mifepristone, the use of telehealth for insurance-covered medical abortions remained rare. Amid increasing state restrictions, commercial insurers have the opportunity to increase access to abortion care, particularly via telehealth.

PRIMARY FUNDING SOURCE

Health Resources and Services Administration.

National Comprehensive Cancer Network Guideline Recommendations of Cancer Drugs With Accelerated Approval

Importance

Many cancer drugs are approved under the US Food and Drug Administration (FDA) accelerated approval pathway based on preliminary evidence. It is unclear how this limited evidence is integrated into the National Comprehensive Cancer Network (NCCN) guidelines, which are common references for clinicians and are used by public and private payers to determine reimbursement for oncology treatments.

Objective

To analyze the NCCN guidelines' assessments for cancer drug indications that received FDA accelerated approval compared with cancer drug indications that received FDA regular approval.

Design, Setting, and Participants

This cross-sectional study analyzes FDA-approved indications for cancer drugs that were granted accelerated approval from program inception in 1992 to June 30, 2022. For each drug, the FDA-approved labeling was reviewed to identify all indications. All analyses were performed at the drug-indication level.

Exposure

The exposure was FDA regulatory status as of October 2022, including regular approval, accelerated approval, accelerated approval converted to regular approval, and withdrawn accelerated approval.

Main Outcomes and Measures

The level of evidence and consensus (category 1, 2A, 2B, and 3) and treatment preference (preferred, alternative preferred, other recommended, and useful in certain circumstances) ratings assigned by NCCN committees as of February 2023.

Results

A total of 315 oncology indications for 100 drugs were analyzed. These indications included 156 (50%) with regular approval, 60 (38%) with accelerated approval, 78 (49%) with accelerated approval that was converted to regular approval, and 21 (13%) with withdrawn accelerated approvals. Among all indications, 105 (33%) were rated by the NCCN as having category 1 evidence, 185 (59%) with category 2A, 6 (2%) with category 2B, and 2 (1%) with category 3 evidence. Compared with indications with regular approval, those with accelerated approval were less frequently assigned category 1 evidence (47% vs 3%; P < .001) and were less often listed as preferred treatment options (58% vs 40%; P = .008). Among the 21 withdrawn accelerated approval indications, 8 (38%) remained in the NCCN guidelines, with most having level 2A evidence ratings.

Conclusions and Relevance

This study found that cancer drug indications with accelerated approval were less likely to be assigned high-level evidence ratings and preferred status in the NCCN guidelines compared with indications with regular approval; most accelerated and regular approval drugs had low-quality evidence ratings but high levels of consensus among oncologists on NCCN committees. Greater clarity on the thresholds and definitions of evidence levels would make the NCCN guidelines more useful to clinicians, patients, and payers.

Inflationary Rebates For Generic Drugs Sold Through Medicaid Saved Billions During 2017-20

State Medicaid programs cover nearly all Food and Drug Administration-approved prescription drugs in exchange for mandatory manufacturer rebates, including rebates that offset price increases beyond inflation. These inflationary rebates originally applied to brand-name drugs only, but in 2017 Congress expanded them to include generics. Using public Medicaid medication spending and utilization data and three different measures of drug prices, we found that nearly half of generic drugs were subject to inflationary rebates during the period 2017-20, offsetting 2-12 percent of the $53.6 billion in generic drug spending during that time. Rebates were larger among non-orally administered drugs and those with the highest prices. Generic inflationary rebates offset substantial Medicaid spending during that period, suggesting that many generic prices increased above inflation despite the new policy. This might change now that inflationary rebates have been expanded to Medicare under the Inflation Reduction Act of 2022, although additional policies that ensure competitive markets would better protect all US patients from rising generic drug prices.

Transferable Exclusivity Vouchers and Incentives for Antimicrobial Development in the European Union

The European Commission's proposal to address antimicrobial resistance using transferable exclusivity vouchers (TEVs) is fundamentally flawed. European policymakers and regulators should consider alternatives, such as better funding for basic and clinical research, use of advance market commitments funded by a pay-or-play tax, or enacting an EU Fund for Antibiotic Development.

Five-Year Sales for Newly Marketed Prescription Drugs With and Without Initial Orphan Drug Act Designation

This study evaluates sales revenue earned in the first 5 years for newly marketed brand-name drugs with and without an initial orphan drug designation.

Added Therapeutic Benefit of Top-Selling Brand-name Drugs in Medicare

Importance

The Inflation Reduction Act of 2022 authorizes Medicare to negotiate prices of top-selling drugs based on several factors, including therapeutic benefit compared with existing treatment options.

Objective

To determine the added therapeutic benefit of the 50 top-selling brand-name drugs in Medicare in 2020, as assessed by health technology assessment (HTA) organizations in Canada, France, and Germany.

Design, Setting, and Participants

In this cross-sectional study, publicly available therapeutic benefit ratings, US Food and Drug Administration documents, and the Medicare Part B and Part D prescription drug spending dashboards were used to determine the 50 top-selling single-source drugs used in Medicare in 2020 and to assess their added therapeutic benefit ratings through 2021.

Main Outcomes and Measures

Ratings from HTA bodies in Canada, France, and Germany were categorized as high (moderate or greater) or low (minor or no) added benefit. Each drug was rated based on its most favorable rating across countries, indications, subpopulations, and dosage forms. We compared the use and prerebate and postrebate (ie, net) Medicare spending between drugs with high vs low added benefit.

Results

Forty-nine drugs (98%) received an HTA rating by at least 1 country; 22 of 36 drugs (61%) received a low added benefit rating in Canada, 34 of 47 in France (72%), and 17 of 29 in Germany (59%). Across countries, 27 drugs (55%) had a low added therapeutic rating, accounting for $19.3 billion in annual estimated net spending, or 35% of Medicare net spending on the 50 top-selling single-source drugs and 11% of total Medicare net prescription drug spending in 2020. Compared with those with high added benefit, drugs with a low added therapeutic rating were used by more Medicare beneficiaries (median 387 149 vs 44 869) and had lower net spending per beneficiary (median $992 vs $32 287).

Conclusions and Relevance

Many top-selling Medicare drugs received low added benefit ratings by the national HTA organizations of Canada, France, and Germany. When negotiating prices for these drugs, Medicare should ensure they are not priced higher than reasonable therapeutic alternatives.

Medicaid Spending on Antiretrovirals From 2007 Through 2019

BACKGROUND

Antiretroviral (ARV) medications to treat human immunodeficiency virus (HIV) are a major contributor to Medicaid prescription drug spending. Despite having been used for over 3 decades, the first generic ARVs only recently became available, and many newer versions continue to be sold at high prices despite within-class competition. We estimated Medicaid spending on ARVs from 2007 through 2019.

METHODS

Using public Medicaid State Drug Utilization data, we identified trends in ARV spending and use from 2007 through 2019. We estimated net spending and average prices (spending per 30-day supply), accounting for statutory Medicaid rebates, including a 15%-23% base rebate plus additional rebates if a drug's price increased faster than inflation.

RESULTS

Among 48 ARVs, estimated net Medicaid spending from 2007 through 2019 was $25 billion for 17 million 30-day supplies. Annual use increased 118%, from 0.7 million 30-day supplies in 2007 to 1.6 million in 2019. During this time, estimated annual net spending increased 178%, from $1.1 billion to $3.0 billion, and average net prices increased 28%, from $1432 to $1830 per 30-day supply.

CONCLUSIONS

Annual Medicaid net spending on ARVs nearly tripled from 2007 to 2019, due to a combination of expanded use and rising prices. Medicaid did not extract expected benefits from its mandatory inflationary rebates because they were offset by use of newer, more expensive ARVs. To better control spending related to products with incremental innovation, the US government should be authorized to assure that launch prices for new drugs are aligned with the added benefit they offer over existing therapies.

Using Multiple Authorized Generics to Maintain High Prices: The Example of Entacapone

OBJECTIVES

Brand-name drug manufacturers can market or license authorized generics (AGs), which are the same product sold under a generic name. By contrast, independent generics (IGs) are made by other manufacturers. The brand-name manufacturer of entacapone, a treatment for Parkinson's disease, established 4 AGs before IGs emerged. We used this case study to understand how AGs can affect the length of brand-name exclusivity and robustness of generic competition.

METHODS

Using public Food and Drug Administration and court records, we identified the regulatory and legal history for generic entacapone products marketed through 2021. We used Medicare Part D data to estimate trends in use, prices, and spending on entacapone products from 2011 to 2020, comparing actual spending with projected spending if IG competition had begun after expiration of the key patent protecting entacapone (October 2013) and prices had fallen consistent with levels observed for other generic drugs.

RESULTS

From 2012 to 2014, 3 potential entacapone IG manufacturers instead launched AG versions after settlement agreements with the brand-name manufacturer; the brand-name manufacturer additionally introduced its own AG. Four different IG versions were marketed beginning in 2015. From 2011 to 2020, average Medicare prices declined by 62%, less than the projected 74% to 92% price decline expected for a drug with 8 generics. Over this period, Medicare spent $1.1 billion on entacapone products, which could have been reduced by an estimated $137 to $449 million through typical IG competition.

CONCLUSIONS

The case of entacapone demonstrates how licensing multiple AGs in place of IG competition can increase spending. Government regulators should more rigorously monitor AGs to prevent such strategies.

Estimated Medicaid Spending on Original and Citrate-Free Adalimumab From 2014 Through 2021

This cross-sectional study assesses Medicaid spending associated with citrate-free vs original adalimumab.

US public investment in development of mRNA covid-19 vaccines: retrospective cohort study

OBJECTIVE

To estimate US public investment in the development of mRNA covid-19 vaccines.

DESIGN

Retrospective cohort study.

SETTING

Publicly funded science from January 1985 to March 2022.

DATA SOURCES

National Institutes of Health (NIH) Report Portfolio Online Reporting Tool Expenditures and Results (RePORTER) and other public databases. Government funded grants were scored as directly, indirectly, or not likely related to four key innovations underlying mRNA covid-19 vaccines-lipid nanoparticle, mRNA synthesis or modification, prefusion spike protein structure, and mRNA vaccine biotechnology-on the basis of principal investigator, project title, and abstract.

MAIN OUTCOME MEASURE

Direct public investment in research and vaccine development, stratified by the rationale, government funding agency, and pre-pandemic (1985-2019) versus pandemic (1 January 2020 to 31 March 2022).

RESULTS

34 NIH funded research grants that were directly related to mRNA covid-19 vaccines were identified. These grants combined with other identified US government grants and contracts totaled $31.9bn (£26.3bn; €29.7bn), of which $337m was invested pre-pandemic. Pre-pandemic, the NIH invested $116m (35%) in basic and translational science related to mRNA vaccine technology, and the Biomedical Advanced Research and Development Authority (BARDA) ($148m; 44%) and the Department of Defense ($72m; 21%) invested in vaccine development. After the pandemic started, $29.2bn (92%) of US public funds purchased vaccines, $2.2bn (7%) supported clinical trials, and $108m (<1%) supported manufacturing plus basic and translational science.

CONCLUSIONS

The US government invested at least $31.9bn to develop, produce, and purchase mRNA covid-19 vaccines, including sizeable investments in the three decades before the pandemic through March 2022. These public investments translated into millions of lives saved and were crucial in developing the mRNA vaccine technology that also has the potential to tackle future pandemics and to treat diseases beyond covid-19. To maximize overall health impact, policy makers should ensure equitable global access to publicly funded health technologies.

Market dynamics of authorized generics in Medicaid from 2014 to 2020

OBJECTIVE

To investigate the use and timing of market introduction of authorized generics (AGs), which unlike independent generics are sold by the brand-name drug manufacturer under a generic label.

DATA SOURCES

This study used public Medicaid prescription drug use data from 2014 to 2020.

STUDY DESIGN

This cross-sectional study measured the percentage of filled prescriptions for AGs, compared with brand-name and independent generic versions. We also identified the frequency and characteristics of AGs marketed at least 1 year before independent generics.

DATA EXTRACTION METHODS

Drugs were classified based on manufacturer-reported data to Medicaid.

PRINCIPAL FINDINGS

From 2014 to 2020, 1023 AGs accounted for 175 million filled Medicaid prescriptions. These represented 4% of Medicaid prescription drug use, and 16% of medication use among products with AGs available. Among 393 AGs for drugs without generic competition before 2014, 139 (35%) were marketed at least 1 year before independent generics or had no independent generic competition through December 2020.

CONCLUSIONS

AGs represented a small share of Medicaid prescription drug use from 2014 to 2020, but when AGs were available, they accounted for sizeable market share. Among the minority of cases in which AGs were marketed a year or more before independent generics, manufacturers may be using AGs to bolster brand-name drug prices or to undermine independent generic competition, meriting further attention by regulators.

Simulated Medicare Drug Price Negotiation Under the Inflation Reduction Act of 2022

Importance

The Inflation Reduction Act of 2022 gives Medicare the authority to negotiate prices for certain prescription drugs. Which drugs will be selected and how prices will be negotiated remain unclear.

Objective

To simulate drug selection and the minimum savings that would have been achieved at statutory ceiling prices if Medicare drug price negotiation had been implemented from 2018 to 2020.

Design, Setting, and Participants

In this cross-sectional study, a policy simulation analysis of high-spending prescription drugs in Medicare Part B and Part D that were eligible for negotiation from January 2018 to December 2020 was performed from August 5 to November 20, 2022.

Exposures

Eligibility criteria for selection and discounts afforded by the statutory ceiling prices for negotiation.

Main Outcomes and Measures

The main outcomes were characteristics of drugs subject to negotiation and estimated Medicare savings from 2018 to 2020 that would have been achieved through spending at ceiling prices compared with existing net prices accounting for price concessions.

Results

Among the 40 selected drugs, 35 were primarily reimbursed through Medicare Part D and 5 through Part B and 10 were biologics. The most common therapeutic classes were endocrine (11), neurologic or psychiatric (5), pulmonary (4), rheumatologic or immunologic (4), and cardiovascular (4). Median time from US Food and Drug Administration approval to selection was 12 years (IQR, 10-14 years). Three drugs faced generic competition in the 2 years between selection and price negotiation. For the remaining 37 drugs, estimated net Medicare spending from 2018 to 2020 was $55.3 billion; spending at ceiling prices would have been reduced by an estimated $26.5 billion, which represented 5% of estimated net Medicare drug spending during those 3 years.

Conclusions and Relevance

In this cross-sectional study, simulating the drug price negotiation provisions in the Inflation Reduction Act of 2022 revealed important limitations, including strict selection criteria and the potential for drugs to become ineligible for negotiation during the 2 years between selection and prices taking effect. Despite these limitations, the policy still delivered substantial savings because ceiling prices offered steep discounts, in part, by erasing excess spending from price increases faster than inflation.

Estimated Medicare Part B Savings From Inflationary Rebates

This study uses annual Medicare Part B spending data to examine the potential savings from the drug pricing reforms in the Inflation Reduction Act of 2022.

Frequency of Approval and Marketing of Biosimilars With a Skinny Label and Associated Medicare Savings

This cohort study assesses the frequency of approval and marketing of skinny-label biosimilars and their savings to Medicare.

Patient Out-of-Pocket Costs Following the Availability of Biosimilar Versions of Infliximab

After market exclusivity ends for biologic drugs, biosimilars-follow-on versions made by other manufacturers-can compete with lower prices. Biosimilars have modestly reduced prescription drug spending for US payers, but it is unclear whether patients have directly experienced any savings. In this study we assessed whether availability of biosimilar infliximab was associated with lower out-of-pocket (OOP) costs, using claims from a national data set of commercially insured patients from 2014 to 2018. We used two-part models, adjusting for patient demographics, clinical characteristics, insurance plan type, and calendar month. Compared with the reference biologic, there was no difference in the percentage of biosimilar claims with OOP costs (30.1% vs. 30.8%; adjusted odds ratio (aOR) 0.98, 95% confidence interval (CI), 0.84-1.15, P = 0.84) or the average nonzero OOP cost (median $378 vs. $538, adjusted mean ratio (aMR) 0.97, 95% CI, 0.80-1.18, P = 0.77). The percentage of claims with OOP costs was lower after biosimilar competition (30.7% vs. 35.0%, aOR 0.96, 95% CI, 0.94-0.99, P = 0.003), but average nonzero costs increased (median $534 vs. $520, aMR 1.04, 95% CI, 1.01-1.07, P = 0.004). Thus, early biosimilar infliximab competition did not improve affordability for patients. Policymakers need to better assure that competition in the biosimilar market translates to lower costs for patients using these medications.

State Laws and Generic Substitution in the Year After New Generic Competition

OBJECTIVES

Substitution of brand-name drugs with less expensive, equally effective interchangeable generics is an important strategy for promoting adherence and controlling prescription drug spending. US state laws govern generic substitution, but there is variability among states in how these laws are designed. We aimed to determine how different features of state laws regulating generic substitution are associated with use of generic drugs.

METHODS

Using national claims databases, we studied individuals with commercial insurance or Medicare Advantage plans who newly initiated one of 34 prescription drugs during the year after new generic competition (2017-2018) to determine any association between generic use and 3 different features of state laws. We used multivariable logistic regression to adjust for demographic and clinical characteristics.

RESULTS

Of 502 763 individuals who initiated one of the drugs, 409 856 (81.6%) received a generic version. Those in states requiring patient consent or notification had lower use of generics (81.1% vs 82.9%; adjusted odds ratio 0.89; 95% confidence interval 0.87-0.91; P &lt; .001). By contrast, mandating versus permitting generic substitution and protecting pharmacists from liability did not appear to have significant effects.

CONCLUSIONS

In this study of commercially insured and Medicare Advantage patients, patients in states requiring consent or notification for pharmacists to substitute Food and Drug Administration-certified interchangeable generics had lower use of generics. Laws in 39 states plus the District of Columbia could be amended to improve use of inexpensive and equally effective generic drugs.

New Reforms to Prescription Drug Pricing in the US: Opportunities and Challenges

This Viewpoint describes the provisions and limitations of prescription drug pricing reforms enacted by US Congress as part of the Inflation Reduction Act in August 2022.

Sex-Based Role Misidentification and Burnout of Resident Physicians: An Observational Study

OBJECTIVE

This cross-sectional study characterized associations between sex, role misidentification, and burnout among surgical and nonsurgical residents.

SUMMARY BACKGROUND DATA

Limited evidence suggests that female resident physicians are more likely to be misidentified as nonphysician team members, with potential negative implications for wellbeing. The prevalence and impact of role misidentification on the trainee experience in surgical as compared to nonsurgical specialties is unknown.

METHODS

An anonymous electronic survey was distributed to fourteen different residency programs at 2 academic medical centers in August 2018. The survey included questions about demographics, symptoms of burnout, the frequency of misidentification as another member of the care team, and the effect of misidentification on respondents' well-being. Results: Two-hundred sixty out of 419 (62.1% response rate) resident physicians completed the survey, of whom 184 (77.3%) reported being misidentified as a nonphysician at least weekly. Female sex was associated with a significantly increased odds of being misidentified at least weekly (adjusted OR 23.7, 95% CI 10.9-51.5; P < 0.001), as was training in a surgical program (adjusted OR 3.7, 95% CI 1.7-8.0; P = 0.001). Frequent role misidentification was associated with burnout (OR 2.6, 95% CI 1.2-5.5; P = 0.01). In free-text responses, residents reported that being misidentified invoked a sense of not belonging, caused emotional exhaustion, and interfered with patient communication.

CONCLUSIONS

Role misidentification is more prevalent among female residents and surgical residents, compared to male residents and nonsurgical residents, respectively. Physician role misidentification is associated with burnout and has negative implications for resident wellbeing; interventions to reduce role misidentification are needed.

Association of Perceived Role Misidentification With Use of Role Identity Badges Among Resident Physicians

IMPORTANCE

Role misidentification of resident physicians occurs frequently and is associated with decreased well-being.

OBJECTIVE

To evaluate the role misidentification and burnout rates among resident physicians after disbursement of role identity badges.

DESIGN, SETTING, AND PARTICIPANTS

This quality improvement study was conducted during the 2018 to 2019 academic year. Residents in 13 surgical and nonsurgical residency programs at 2 large academic medical centers (Massachusetts General Hospital and Brigham and Women's Hospital) were eligible to receive the intervention and complete 2 surveys (before and after the intervention). Data were analyzed from December 4, 2021, to February 7, 2022.

INTERVENTION

Role identity badges that displayed "Doctor" and could be attached to mandatory hospital identification badges were distributed to residents in August 2018 at Massachusetts General Hospital and in March 2019 at Brigham and Women's Hospital. Residents were not required to wear the badge.

MAIN OUTCOMES AND MEASURES

The primary outcome was self-reported role misidentification at least once per week during the previous 3 months. The change from pre- to post-badge distribution surveys was assessed with McNemar's test. A secondary outcome was any reduction in the frequency of role misidentification after badge distribution. Multivariable logistic regression was used to assess the association between reduced frequency of role misidentification and demographic characteristics. A separate analysis evaluated the change in self-reported burnout after badge distribution.

RESULTS

A total of 161 residents (39%) completed both surveys, which included 79 men (49%), 72 (45%) who were younger than 30 years, 20 (12%) with an underrepresented in medicine status, and 74 (46%) who were in surgical specialties. The proportion of residents reporting at least weekly role misidentification decreased from 50% (n = 81 of 161) before badge distribution to 35% (n = 57 of 161; P < .001) after badge distribution. Female residents were more likely to report reduced role misidentification frequency after receiving a badge compared with male residents (adjusted odds ratio, 2.32; 95% CI, 1.18-4.63; P = .01). Residents who wore badges demonstrated no change in burnout before vs after badge distribution (39% [n = 33 of 85] vs 34% [29 of 85]; P = .87) compared with an increase among residents who did not wear a badge (27% [n = 15 of 55] vs 45% [n = 25 of 55]; P = .03).

CONCLUSIONS AND RELEVANCE

This study found that the distribution of role identity badges was associated with less frequent perception of role misidentification among resident physicians across specialties, particularly among female residents. Role identity badges were a well-received, low-cost intervention that could be used to reduce role misidentification and address burnout among residents.

Trends in Prescription Drug Launch Prices, 2008-2021

This study uses SSR Health data on drug list prices and estimated net prices after manufacturer discounts to evaluate trends in prices for newly marketed brand-name prescription drugs in the US from 2008 to 2021.

Indication-Specific Generic Uptake of Imatinib Demonstrates the Impact of Skinny Labeling

PURPOSE

Generic competition can be delayed if brand-name manufacturers obtain additional patents on supplemental uses. The US Food and Drug Administration allows generic drug manufacturers to market versions with skinny labels that exclude patent-protected indications. This study assessed whether use of generic versions of imatinib varied between indications included and excluded from the skinny labels.

METHODS

In this cross-sectional study, we identified adult patients covered by commercial insurance or Medicare Advantage plans who initiated imatinib from February 2016 (first generic availability) to September 2020. Generic versions were introduced with skinny labels that included indications covering treatment of chronic myelogenous leukemia (CML) but excluded treatment of gastrointestinal stromal tumors (GISTs) because of remaining patent protections. Logistic regression was used to determine whether use of generic versus brand-name imatinib differed between patients with a diagnosis of CML or GIST, adjusting for demographics, insurance type, prior use of brand-name drugs, and calendar month.

RESULTS

Among 2,000 initiators, 934 (47%) had CML and 686 (34%) had GIST. Within 3 years after generics entered the market, more than 90% of initiators in both groups used generic imatinib. Initiation of generic imatinib was slightly lower among patients with GIST than among patients with CML (85% v 88%; adjusted odds ratio 0.56; 95% CI, 0.39 to 0.80; P ≤ .001).

CONCLUSION

Generic versions of imatinib were dispensed frequently for indications both included (CML) and excluded (GIST) from the skinny labeling, although patients with GIST were slightly less likely to receive a generic version. The skinny labeling pathway allowed generics to enter the market before patent protection for treating patients with GIST expired, facilitating lower drug prices.

Medicaid Spending on Drugs Marketed Without US Food and Drug Administration Approval in 2020

This cross-sectional study examines the proportion of Medicaid prescription and spending on drugs marketed in the United States without Food and Drug Administration approval.

Payer-Specific Negotiated Prices for Prescription Drugs at Top-Performing US Hospitals

This cross-sectional study analyzes a group of top-performing hospitals to quantify drug pricing variation across insurers.