Dataset Information

Prescription drug spending by payer: Implications for managed care.

ABSTRACT:

Background

Brand-name prescription drugs are an important driver of prescription drug spending, but different payers may bear these costs differentially necessitating different policy goals for each payer. But little is known about how the top 10 selling drugs in the U.S. impact spending across payers.

Objective

To estimate the differential spending burden of top prescription drugs on Medicaid, Medicare, commercial coverage, and out-of-pocket (OOP) spending.

Methods

The percentage of total prescription drug spending, total spending, total prescriptions, and average cost per prescription overall and for each of the following payers - Medicaid, Medicare, private insurance, and OOP - was calculated for each of the top 10 selling prescription drugs using 2017-2019 Medical Expenditure Panel Survey data.

Results

These 10 prescription drugs accounted for average annual spending of $83.4 billion and 19.0% of all prescription drug spending. Medicare tended to contribute the highest fraction of spending. The average annual cost per prescription ranged from $500 for Advair to $7400 for Tecfidera. Significant variation in the average annual number of prescriptions filled was observed, ranging from 1.4 million for Tecfidera to 13.6 million for Lantus.

Conclusions

The findings highlight the significant impact of the top 10 selling prescription drugs on U.S. prescription drug spending. The wide variation in per prescription cost as well as contribution to each payer's prescription drug burden emphasizes how policies targeting top-selling drugs may differentially impact payers as well as how payer-specific policies may differ substantially even for top selling drugs.

SUBMITTER: Chavehpour Y

PROVIDER: S-EPMC10835280 | biostudies-literature | 2024 Mar

REPOSITORIES: biostudies-literature

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Publications

Prescription drug spending by payer: Implications for managed care.

Chavehpour Yousef Y Balkrishnan Rajesh R Segel Joel E JE

Exploratory research in clinical and social pharmacy 20240112

<h4>Background</h4>Brand-name prescription drugs are an important driver of prescription drug spending, but different payers may bear these costs differentially necessitating different policy goals for each payer. But little is known about how the top 10 selling drugs in the U.S. impact spending across payers.<h4>Objective</h4>To estimate the differential spending burden of top prescription drugs on Medicaid, Medicare, commercial coverage, and out-of-pocket (OOP) spending.<h4>Methods</h4>The per ...[more]

PMID: 38312738

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Project description:Importance:US health care spending has continued to increase and now accounts for 18% of the US economy, although little is known about how spending on each health condition varies by payer, and how these amounts have changed over time. Objective:To estimate US spending on health care according to 3 types of payers (public insurance [including Medicare, Medicaid, and other government programs], private insurance, or out-of-pocket payments) and by health condition, age group, sex, and type of care for 1996 through 2016. Design and Setting:Government budgets, insurance claims, facility records, household surveys, and official US records from 1996 through 2016 were collected to estimate spending for 154 health conditions. Spending growth rates (standardized by population size and age group) were calculated for each type of payer and health condition. Exposures:Ambulatory care, inpatient care, nursing care facility stay, emergency department care, dental care, and purchase of prescribed pharmaceuticals in a retail setting. Main Outcomes and Measures:National spending estimates stratified by health condition, age group, sex, type of care, and type of payer and modeled for each year from 1996 through 2016. Results:Total health care spending increased from an estimated $1.4 trillion in 1996 (13.3% of gross domestic product [GDP]; $5259 per person) to an estimated $3.1 trillion in 2016 (17.9% of GDP; $9655 per person); 85.2% of that spending was included in this study. In 2016, an estimated 48.0% (95% CI, 48.0%-48.0%) of health care spending was paid by private insurance, 42.6% (95% CI, 42.5%-42.6%) by public insurance, and 9.4% (95% CI, 9.4%-9.4%) by out-of-pocket payments. In 2016, among the 154 conditions, low back and neck pain had the highest amount of health care spending with an estimated $134.5 billion (95% CI, $122.4-$146.9 billion) in spending, of which 57.2% (95% CI, 52.2%-61.2%) was paid by private insurance, 33.7% (95% CI, 30.0%-38.4%) by public insurance, and 9.2% (95% CI, 8.3%-10.4%) by out-of-pocket payments. Other musculoskeletal disorders accounted for the second highest amount of health care spending (estimated at $129.8 billion [95% CI, $116.3-$149.7 billion]) and most had private insurance (56.4% [95% CI, 52.6%-59.3%]). Diabetes accounted for the third highest amount of the health care spending (estimated at $111.2 billion [95% CI, $105.7-$115.9 billion]) and most had public insurance (49.8% [95% CI, 44.4%-56.0%]). Other conditions estimated to have substantial health care spending in 2016 were ischemic heart disease ($89.3 billion [95% CI, $81.1-$95.5 billion]), falls ($87.4 billion [95% CI, $75.0-$100.1 billion]), urinary diseases ($86.0 billion [95% CI, $76.3-$95.9 billion]), skin and subcutaneous diseases ($85.0 billion [95% CI, $80.5-$90.2 billion]), osteoarthritis ($80.0 billion [95% CI, $72.2-$86.1 billion]), dementias ($79.2 billion [95% CI, $67.6-$90.8 billion]), and hypertension ($79.0 billion [95% CI, $72.6-$86.8 billion]). The conditions with the highest spending varied by type of payer, age, sex, type of care, and year. After adjusting for changes in inflation, population size, and age groups, public insurance spending was estimated to have increased at an annualized rate of 2.9% (95% CI, 2.9%-2.9%); private insurance, 2.6% (95% CI, 2.6%-2.6%); and out-of-pocket payments, 1.1% (95% CI, 1.0%-1.1%). Conclusions and Relevance:Estimates of US spending on health care showed substantial increases from 1996 through 2016, with the highest increases in population-adjusted spending by public insurance. Although spending on low back and neck pain, other musculoskeletal disorders, and diabetes accounted for the highest amounts of spending, the payers and the rates of change in annual spending growth rates varied considerably.

Project description:ImportanceMedicaid enrolls a disproportionate share of US adults with hepatitis C virus (HCV), and most receive Medicaid benefits through managed care organizations (MCOs). Medicaid MCOs often impose stricter requirements to access HCV medications than traditional fee-for-service Medicaid, which may inhibit use. Though Medicaid MCOs generally cover prescription drugs, several states have carved out direct-acting antiviral HCV medications from MCO coverage and opted to cover them under fee-for-service. Whether these carve outs were associated with changes in medication use is unknown.ObjectiveTo examine the association between Medicaid-covered HCV medication fills and carve outs of these medications from MCO coverage.Design setting and participantsThis cross-sectional study examined changes in fills of Medicaid-covered direct-acting antiviral HCV medications in 4 states (Indiana, Michigan, New Hampshire, and West Virginia) that carved out these drugs from Medicaid MCOs between 2015 and 2017. A synthetic control approach was used to compare changes in HCV prescription fills between states that did and did not carve out these medications from MCO prescription drug coverage. Data of direct-acting antiviral HCV prescription fills were obtained from the Medicaid State Drug Utilization Data files, January 2015 to June 2020. Data analysis was conducted from November 2020 to June 2021.ExposuresCarve outs of direct-acting antiviral HCV medications from Medicaid MCO prescription drug coverage.Main outcomes and measuresDirect-acting antiviral HCV prescriptions filled per 100 000 Medicaid enrollees.ResultsIn this cross-sectional study, carve outs were associated with a mean quarterly increase of 22.1 (95% CI, 12.7-34.1) HCV prescriptions per 100 000 Medicaid enrollees, a relative increase of 86.3% compared with synthetic control states. Compared with each state's respective synthetic control, HCV prescription fills were associated with an increase of 11.5 (95% CI, 5.1-19.0) HCV prescription fills per 100 000 Medicaid enrollees per quarter in Indiana, 36.6 (95% CI, 23.5-53.9) in Michigan, 20.7 (95% CI, 11.1-32.8) in West Virginia, and 43.6 (95% CI, 25.9-68.4) in New Hampshire.Conclusions and relevanceIn this cross-sectional study of data from 39 states and the District of Columbia, carve outs of direct-acting antiviral HCV medications from Medicaid MCO prescription drug coverage were associated with significant increases in HCV medication use. Given their clinical benefits, greater uptake of HCV medication may help improve the health of Medicaid enrollees with HCV and reduce the economic burden of untreated HCV on the US health care system.

Project description:ImportancePrescription drug spending is a topic of increased interest to the public and policymakers. However, prior assessments have been limited by focusing on retail spending (Part D-covered drugs), omitting clinician-administered (Part B-covered) drug spending, or focusing on all fee-for-service Medicare beneficiaries, regardless of their enrollment into prescription drug coverage.ObjectiveTo estimate the proportion of health care spending contributed by prescription drugs and to assess spending for retail and clinician-administered prescriptions.Design, setting, and participantsDescriptive, serial, cross-sectional analysis of a 20% random sample of fee-for-service Medicare beneficiaries in the United States from 2008 to 2019 who were continuously enrolled in Parts A (hospital), B (medical), and D (prescription drug) benefits, and not in Medicare Advantage.ExposureCalendar year.Main outcomes and measuresNet spending on retail (Part D-covered) and clinician-administered (Part B-covered) prescription drugs; prescription drug spending (spending on Part B-covered and Part D-covered drugs) as a percentage of total per-capita health care spending. Measures were adjusted for inflation and for postsale rebates (for Part D-covered drugs).ResultsThere were 3 201 284 beneficiaries enrolled in Parts A, B, and D in 2008 and 4 502 718 in 2019. In 2019, beneficiaries had a mean (SD) age of 71.7 (12.0) years, documented sex was female for 57.7%, and 69.5% had no low-income subsidies. Total per-capita spending was $16 345 in 2008 and $20 117 in 2019. Comparing 2008 with 2019, per-capita Part A spending was $7106 (95% CI, $7084-$7128) vs $7120 (95% CI, $7098-$7141), Part B drug spending was $720 (95% CI, $713-$728) vs $1641 (95% CI, $1629-$1653), Part B nondrug spending was $5113 (95% CI, $5105-$5122) vs $6702 (95% CI, $6692-$6712), and Part D net spending was $3122 (95% CI, $3117-$3127) vs $3477 (95% CI, $3466-$3489). The proportion of total annual spending attributed to prescription drugs increased from 24.0% in 2008 to 27.2% in 2019, net of estimated rebates and discounts.Conclusions and relevanceIn 2019, spending on prescription drugs represented approximately 27% of total spending among fee-for-service Medicare beneficiaries enrolled in Part D, even after accounting for postsale rebates.

Project description:Alopecia areata (AA) is an autoimmune disease with a complex pathophysiology resulting in nonscarring hair loss in genetically susceptible individuals. We aim to provide health care decision makers an overview of the pathophysiology of AA, its causes and diagnosis, disease burden, costs, comorbidities, and information on current and emerging treatment options to help inform payer benefit design and prior authorization decisions. Literature searches for AA were conducted using PubMed between 2016 and 2022 inclusive, using search terms covering the causes and diagnosis of AA, pathophysiology, comorbidities, disease management, costs, and impact on quality of life (QoL). AA is a polygenic autoimmune disease that significantly impacts QoL. Patients with AA face economic burden and an increased prevalence of psychiatric disease, as well as numerous systemic comorbidities. AA is predominantly treated using corticosteroids, systemic immunosuppressants, and topical immunotherapy. Currently, there are limited data to reliably inform effective treatment decisions, particularly for patients with extensive disease. However, several novel therapies that specifically target the immunopathology of AA have emerged, including Janus kinase (JAK) 1/2 inhibitors such as baricitinib and deuruxolitinib, and the JAK3/tyrosine kinase expressed in hepatocellular carcinoma (TEC) family kinase inhibitor ritlecitinib. To support disease management, a disease severity classification tool, the Alopecia Areata Severity Scale, was recently developed that evaluates patients with AA holistically (extent of hair loss and other factors). AA is an autoimmune disease often associated with comorbidities and poor QoL, which poses a significant economic burden for payers and patients. Better treatments are needed for patients, and JAK inhibitors, among other approaches, may address this tremendous unmet medical need. DISCLOSURES: Dr King reports seats on advisory boards for and/or is a consultant and/or clinical trial investigator for AbbVie, Aclaris Therapeutics Inc, AltruBio Inc, Almirall, Arena Pharmaceuticals, Bioniz Therapeutics, Bristol Meyers Squibb, Concert Pharmaceuticals Inc, Dermavant Sciences Inc, Eli Lilly and Company, Equillium, Incyte Corp, Janssen Pharmaceuticals, LEO Pharma, Otsuka/Visterra Inc, Pfizer, Regeneron, Sanofi Genzyme, TWi Biotechnology Inc, and Viela Bio; and speakers bureaus for AbbVie, Incyte, LEO Pharma, Pfizer, Regeneron, and Sanofi Genzyme. Pezalla is a paid consultant to Pfizer for market access and payer strategy concerns; Fung, Tran, Bourret, Takiya, Peeples-Lamirande, and Napatalung are employees of Pfizer and hold stock in Pfizer. This article was funded by Pfizer.

Project description:ImportanceRising prescription medication costs under Medicaid have led to increased procedural prescription denials by health plans. The effect of unresolved denials on chronic condition exacerbation and subsequent acute care utilization remains unclear.ObjectiveTo examine whether procedural prescription denials are associated with increased net spending through downstream acute care utilization among Medicaid patients not obtaining prescribed medication following a denial.Design, setting, and participantsThis cross-sectional study used Medicaid claims data from 2022 to 2023 for patients at inpatient, outpatient, and pharmacy sites of care across 2 states (Virginia and Washington) and 2 independent health plans. Patients with at least 1 prescription denial in the study period (January 1 through July 31, 2023) were matched to those without denials in a given medication class, based on demographics, health plan data, chronic condition history, and health care utilization. Rates of and spending for physiologically related acute care visits in the 60 days following a medication fill or denial were compared for the study period.Main outcomes and measuresThe main outcomes were all-cause acute care utilization and total medical spending (in 2023 US dollars per member per year [PMPY]) for principal diagnoses physiologically related to each medication class, in the 60 days following a medication fill or denial. Sensitivity analyses were performed to check for spurious associations or unmeasured confounders.ResultsThe 19 725 patients in this study had a median age of 41 (IQR, 29-55) years, and most (60.7%) were female. Patients had a mean (SD) of 3.3 (16.1) comorbidities, 1.0 (2.6) all-cause acute care visits, and 5.6 (7.8) primary care visits during the baseline period. Patients experiencing specific procedural prescription denials had a higher risk of physiologically related emergency department visits and hospitalizations compared with those without a denial in the subsequent 60 days (adjusted odds ratio, 1.40 [95% CI, 1.03-1.88] minimum vs 1.75 [95% CI, 1.39-2.20] maximum for exposure and control groups across the 7 medication classes with significant differences). Denials in 6 medication classes were associated with net total medical spending increases, ranging from $624 (95% CI, $435-$813) to $3016 (95% CI, $1483-$4550) in additional expense PMPY after accounting for both prescription and medical costs attributed to denials.Conclusions and relevanceThe findings of this cross-sectional study suggest that although procedural prescription denials aimed to curb immediate drug costs, some denials prompted heightened acute care utilization and costs that outweighed the short-term prescription budget savings. Health plans should incorporate this potential unintended consequence when shaping prescription coverage policies. Future research should systematically review all medication classes across plans nationally.

Project description:ImportanceThe Medicare Part D Low Income Subsidy (LIS) program provides millions of beneficiaries with drug plan premium and cost-sharing assistance. The extent to which LIS recipients experience subsidy losses with annual redetermination cycles and the resulting associations with prescription drug affordability and use are unknown.ObjectiveTo examine how frequently annual LIS benefits are lost among Medicare Part D beneficiaries and how this is associated with prescription drug use and out-of-pocket costs.Design, setting, and participantsIn this cohort study of Medicare Part D beneficiaries from 2007 to 2018, annual changes in LIS recipients among those automatically deemed eligible (eg, due to dual eligibility for Medicare and Medicaid) and nondeemed beneficiaries who must apply for LIS benefits were analyzed using Medicare enrollment and Part D event data. Subsidy losses were classified in 4 groups: temporary losses (<1 year); extended losses (≥1 year); subsidy reductions (change to partial LIS); and disenrollment from Medicare Part D after subsidy loss. Temporary losses could more likely represent subsidy losses among eligible beneficiaries. Multinomial logit models were used to examine associations between beneficiary characteristics and subsidy loss; linear regression models were used to compare changes in prescription drug cost and use in the months after subsidy losses vs before. Analyses were conducted between November 2022 and November 2023.ExposureSubsidy loss at the beginning of each year among subsidy recipients in December of the prior year.Main outcomes and measuresThe main outcomes were out-of-pocket costs and prescription drug fills overall and for 4 classes: antidiabetes, antilipid, antidepressant, and antipsychotic drugs.ResultsIn 2008, 731 070 full LIS beneficiaries (17%) were not deemed automatically eligible (39% were aged <65 years; 59% were female). Nearly all beneficiaries deemed automatically eligible (≥99%) retained the subsidy annually from 2007 to 2018, compared with 78% to 84% of nondeemed beneficiaries. Among nondeemed beneficiaries, disabled individuals younger than 65 years and racial and ethnic minority groups were more likely to have temporary subsidy losses vs none. Temporary losses were associated with an average 700% increase in out-of-pocket drug costs (+$52.72/mo [95% CI, 52.52-52.92]) and 15% reductions in prescription fills (-0.58 fills/mo [95% CI, -0.59 to -0.57]) overall. Similar changes were found for antidiabetes, antilipid, antidepressant, and antipsychotic prescription drug classes. Beneficiaries who retained their subsidy had few changes.Conclusions and relevanceThe conclusions of this cohort study suggest that efforts to help eligible beneficiaries retain Medicare Part D subsidies could improve drug affordability, treatment adherence, and reduce disparities in medication access.

Dataset Information

Prescription drug spending by payer: Implications for managed care.

Background

Objective

Methods

Results

Conclusions

Publications

Prescription drug spending by payer: Implications for managed care.

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