Pharmacy Benefit Manager Pricing and Spread Pricing for High-Utilization Generic Drugs.
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ABSTRACT:
SUBMITTER: Mattingly TJ
PROVIDER: S-EPMC10589804 | biostudies-literature | 2023 Oct
REPOSITORIES: biostudies-literature
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Pharmacy Benefit Manager Pricing and Spread Pricing for High-Utilization Generic Drugs.
Mattingly T Joseph TJ Ben-Umeh Kenechukwu C KC Bai Ge G Anderson Gerard F GF
JAMA health forum 20231006 10
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Project description: Not available
| S-EPMC7251257 | biostudies-literature
Project description:The high costs associated with pharmaceuticals and the accompanying stakeholders are being closely evaluated in the search for solutions. As a major stakeholder in the U.S. pharmaceutical market, the practices of pharmacy benefit manager (PBM) organizations have been under increased scrutiny. Examples of controversial practices have included incentives driving formulary status and prohibiting pharmacists from disclosing information on lower-cost prescription alternatives. Ethical investigations have been largely omitted within the debate on the responsibilities of these organizations in the health care system. Ethical analysis of organizational practices is justified based on the potential impact during health care delivery. The objective of this study was to analyze several specific PBM practices using multiple ethical decision-making models to determine their ethical nature. This study systematically applied multiple ethical decision-making models and codes of ethics to a variety of practices associated with PBM-related dilemmas encountered in the pharmaceutical environment. The assessed scenarios resulted in mixed outcomes. PBM practices were both ethical and unethical depending on the applied ethical model. Despite variation across applied models, some practices were predominately ethical or unethical. The point of sale rebates were consistently determined as ethical, whereas market consolidation, gag clauses, and fluctuation of pharmacy reimbursements were all predominantly determined as unethical. The application of using provider codes of ethics created additional comparison and also contained mixed findings. This study provided a unique assessment of PBM practices and provides context from a variety of ethical perspectives. To the knowledge of the authors, these perspectives have not been previously applied to PBM practices in the literature. The application of ethical decision-making models offers a unique context to current health care dilemmas. It is important to analyze health care dilemmas using ethics-based frameworks to contribute solutions addressing complexities and values of all stakeholders in the health care environment.
| S-EPMC6631892 | biostudies-literature
Project description: Not available
| S-EPMC11388050 | biostudies-literature
Project description: Not available
| S-EPMC5876838 | biostudies-literature
Project description:BackgroundGeneric medications cost less than brand-name medications and are similarly effective, but brand-name medications are still prescribed. We evaluated patterns in generic cardiovascular medication fills and estimated the potential cost savings with increased substitution of generic for brand-name medications.MethodsThis was a cross-sectional study of cardiovascular therapies using the Medicare Part D database of prescription medications in 2017. We evaluated drug fill patterns for therapies with available brand-name and generic options. We determined the generic substitution ratio and estimated the potential savings with increased generic substitution at the national, state, and clinician level. We compared states with laws related to mandatory pharmacist generic substitution and patient consent for substitution.ResultsOf ≈$22.9 billion spent on cardiovascular drugs in Medicare Part D prescription programs in 2017, ≈$11.0 billion was spent on medications with both brand-name and generic options. Although only 2.4% of medication fills were for the brand-name choice, they made up 21.2% of total spending. Accounting for estimated brand-name rebates, generic substitution for these medications would save $641 million, including $135 million in costs shouldered by patients. Furthermore, the minority of clinicians with the lowest generic utilization was responsible for a large proportion of the potential cost savings.ConclusionsThere are substantial potential cost savings from substituting brand-name medications with generic medications. These savings would be primarily driven by lower use of brand-name therapies by the minority of clinicians who prescribe them at increased rates.
| S-EPMC9070108 | biostudies-literature
Project description:ObjectivesIdentify expensive Part B drugs and evidence for each drug's added benefit and model a reimbursement policy for Medicare that integrates added benefit assessment and domestic reference pricing.MethodsA retrospective analysis using a 20% nationally representative sample of 2015 to 2019 traditional Medicare Part B claims. Expensive drugs were defined as having average annual spending per beneficiary exceeding the average annual social security benefit ($17 532 in 2019). For expensive drugs identified in 2019, added benefit assessments conducted by the French Haute Autorité de Santé were collected. For expensive drugs with a low added benefit rating, comparator drugs were identified in French Haute Autorité de Santé reports. For each comparator, average annual spending per beneficiary in Part B was computed. Potential savings from 2 reference pricing scenarios were calculated: reimbursing expensive Part B drugs with low added benefit at the level of each drug's (1) lowest cost comparator and (2) beneficiary-weighted-average cost of all comparators.ResultsThe number of expensive Part B drugs grew from 56 in 2015 to 92 in 2019. Of the 92 expensive drugs in 2019, 34 offer low added benefit. Implementing reference pricing for these expensive drugs with low added benefit could have saved an estimated $2.1 billion if prices were set based on spending for their lowest cost comparator, or $1 billion if prices were set based on the weighted average of spending for comparators.ConclusionReference pricing based on added benefit assessment could be used to address the launch prices for expensive Part B drugs with low added benefit.
| S-EPMC11376011 | biostudies-literature
Project description:The Affordable Care Act included a provision to gradually eliminate the Medicare prescription drug coverage gap between 2011 and 2020, which substantially lower medication costs in the gap. Using 2007-2016 Medicare claims data, we estimate how filling the gap affects individuals' out-of-pocket spending and medication use, separately for branded and generic drugs. One important difficulty in estimating the policy impact is that around the same time, many blockbuster drugs commonly used by the Medicare population experienced patent expiration and began to see generic entry. Because generic entries affected different therapeutic classes at different times, we run difference-in-differences models by therapeutic category at the beneficiary-month level to isolate the effect of the gap closure from that of generic entry. Overall, we find that filling the gap substantially reduced out-of-pocket spending and increased the use of branded drugs, which had larger discount rates during the analysis period. Beneficiaries reaching the gap, at older ages, or with comorbidities experienced larger reduction in out-of-pocket spending. We show that without accounting for generic entry, the effect of filling the coverage gap on medication use is underestimated for branded drugs and overestimated for generic drugs.
| S-EPMC9898097 | biostudies-literature
Project description:ObjectiveTo study the impact of various elements of pharmacy benefit design on both the absolute and relative utilization of generics, brands, retail pharmacy, and mail service.Data sourcePanel data on 1,074 plan sponsors covering 21.6 million individuals over 12 calendar quarters (2005-2007).Study designA retrospective analysis of pharmacy claims.Statistical methodsTo control for potential endogeneity, linear fixed effects models were estimated for each of six dependent variables: the generic utilization rate, the brand utilization rate, the generic dispensing rate (GDR), the retail pharmacy utilization rate, the mail service utilization rate, and the mail distribution rate.Principal findingsMost member cost-share variables were nonlinearly associated with changes in prescription drug utilization. Marginal effects were generally greater in magnitude for brand out-of-pocket costs than for generic out-of-pocket costs. Time dummies, as well as other pharmacy benefit design elements, also yielded significant results.ConclusionsPrior estimates of the effect of member cost sharing on prescription drug utilization may be biased if complex benefit designs, mail service fulfillment, and unmeasured factors such as pharmaceutical pipelines are not accounted for. Commonly cited relative utilization metrics, such as GDR, may be misleading if not examined alongside absolute prescription drug utilization.
| S-EPMC2699918 | biostudies-literature
Project description:ObjectivesTo evaluate how changes in generic drug prices and the incidence of abrupt price increases varied with the number of manufacturers supplying each drug.Study designAnalysis of 2005 to 2016 monthly wholesale acquisition costs (WACs) and University of Pittsburgh Medical Center Health Plan counts of pharmacy claims for National Drug Codes (NDCs) for generic drugs.MethodsEach year, NDCs were categorized according to the number of manufacturers offering each combination of active ingredient and dosage form: 1 to 3, 4 to 7, and more than 7. For every month from January 2006 to January 2017, we estimated the 12-month change in WAC (eg, 12-month change in January 2006 was calculated as the difference in WAC between January 2006 and January 2005, divided by the WAC in January 2005), before and after weighting each NDC by counts of pharmacy claims. We evaluated the proportion of NDCs that had large price increases, greater than 20%, 50%, 100%, and 500% within a year.ResultsBefore 2010, price changes were higher for drugs supplied by a lower number of manufacturers; however, after 2010, prices increased sharply, and drugs supplied by 4 to 7 manufacturers showed increases similar to or higher than those supplied by 1 to 3. In 2013, prices increased by an average of 29% for drugs supplied by 1 to 3 and 4 to 7 manufacturers, and 10% for more than 7. Price changes increased after weighting by counts of pharmacy claims, demonstrating that price increases disproportionately affected widely used drugs. The proportion of NDCs from drugs supplied by 1 to 3 manufacturers that doubled in price within a year was 3.6 times higher in 2012 to 2015 than in 2005 to 2009 (4.6% vs 1.3%, respectively).ConclusionsIncreases in generic drug prices are concerning because they affected widely used drugs and suggest that generic drug prices may be increasingly insensitive to competition.
| S-EPMC6734551 | biostudies-literature
Project description:BackgroundGeneric drug prices have been capped at specified percentages of the interchangeable branded drug's price by the Canadian provincial public drug plans since 1993. The Pan-Canadian Pharmaceutical Alliance, formed as a coalition by the provinces/territories in Canada, implemented an alternative approach, a tiered-pricing framework (TPF) for new generic drugs on April 1, 2014, under which the percentage varies with the number of generic firms in each market. We evaluate the impact of the TPF on generic entry, ie, listing in public drug plans in Canada.MethodsOur study compared the pre-TPF period (01/01/2012-03/31/2014) with the TPF period (04/01/2014- 06/30/2016). Prescription drugs from nine provincial public drug plans were grouped into a "market" if they had the same active ingredient and strength, route of administration, and dosage form. Each "market" was contestable by generics and met the eligibility criteria for TPF. At the "market" level, Cox proportional-hazards models with time-varying covariates were used to measure the impact of the TPF on the first generic listing in any provincial public drug plan in Canada relative to the first launch date worldwide.ResultsA total of 189 markets in Canada were selected for the analyses. Generic drugs in small markets were more likely to be listed in Canada during the TPF period compared to the pre-TPF period (hazard ratio [HR], 95% CI: 3.81, 1.51-9.62). There was no significant difference in generic drug listings in large markets between the two policy periods.ConclusionTPF speeds up generic entry in small markets and generates the benefits of generic competition while avoiding the pitfalls of the previously employed price-cap regulations.
| S-EPMC9309918 | biostudies-literature