Dataset Information

Nonlinear pricing in drug benefits and medication use: the case of statin compliance in Medicare Part D.

ABSTRACT:

Objective

To examine how enrollees' statin compliance responds to expected prices in Medicare Part D, which features a nonlinear price schedule due to a coverage gap.

Data sources/study setting

Prescription Drug Event data for a 5 percent random sample of Medicare Advantage Prescription Drug Plan enrollees in 2008 who did not receive a low-income subsidy.

Study design

We analyze statin compliance prior to the coverage gap, where the "effective price" is higher than the actual copayment for drugs because consumers anticipate that more spending will make them more likely to reach the gap. We construct each enrollee's effective price as her expected price at the end of the year, which is the weighted average between pre-gap and in-gap copayments with the weight being the predicted probability of hitting the gap. Compliance is defined as at least 80 percent of days covered.

Principal findings

Part D enrollees' pre-gap statin compliance decreases by 3.7-4.7 percentage points for a $10 increase in the effective price.

Conclusion

The presence of a coverage gap decreases statin compliance prior to the gap, suggesting that incorporating expected future prices is important to assess the full impact of cost sharing on drug compliance under nonlinear price schedules.

SUBMITTER: Jung K

PROVIDER: S-EPMC4231578 | biostudies-literature | 2014 Jun

REPOSITORIES: biostudies-literature

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Publications

Nonlinear pricing in drug benefits and medication use: the case of statin compliance in Medicare Part D.

Jung Kyoungrae K Feldman Roger R McBean A Marshall AM

Health services research 20131219 3

<h4>Objective</h4>To examine how enrollees' statin compliance responds to expected prices in Medicare Part D, which features a nonlinear price schedule due to a coverage gap.<h4>Data sources/study setting</h4>Prescription Drug Event data for a 5 percent random sample of Medicare Advantage Prescription Drug Plan enrollees in 2008 who did not receive a low-income subsidy.<h4>Study design</h4>We analyze statin compliance prior to the coverage gap, where the "effective price" is higher than the actu ...[more]

PMID: 24354765

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Project description:BackgroundSubstantial research has documented inequalities between US minorities and whites in meeting the eligibility criteria for the Medicare Part D medication therapy management (MTM) program. Even though the Centers for Medicare & Medicaid Services attempted to relax the eligibility criteria, a critical barrier to effective MTM reform is a lack of stronger evidence about the effects of MTM on minorities' health outcomes.ObjectiveTo examine the effects of comprehensive medication review (CMR), an MTM core component, on racial and ethnic disparities in adherence to diabetes, hypertension, and hyperlipidemia medications among Medicare beneficiaries aged ≥65 years.MethodsThis study used full-year 2017 Medicare Parts A, B, and D claims data, including MTM data, linked to the Area Health Resources Files. Racial and ethnic disparities in nonadherence to diabetes, hypertension, and hyperlipidemia medications were compared between CMR recipients and nonrecipients matched by their propensity scores. To determine the changes in racial and ethnic disparities after receiving CMR, a difference-in-differences framework was applied, by including in logistic regression analyses interaction terms between dummy variables for CMR receipt and each racial or ethnic minority group.ResultsCompared with CMR nonrecipients, CMR recipients had significantly lower racial and ethnic disparities across the 3 outcome measures, with the exception of the difference between whites and blacks in nonadherence to diabetes medications. For example, compared with CMR nonrecipients, among CMR recipients the differences in the odds of nonadherence to hypertension medications were reduced, respectively, by 8% (95% confidence interval [CI], 0.88-0.96) between whites and blacks; by 18% (95% CI, 0.78-0.86) between whites and Hispanics; by 16% (95% CI, 0.77-0.91) between whites and Asians; and by 9% (95% CI, 0.85-0.98) between whites and other racial and ethnic groups.ConclusionReceiving a CMR reduced the racial and ethnic disparities in adherence to diabetes, hypertension, and hyperlipidemia medications among Medicare beneficiaries aged ≥65 years. These findings provide critical empirical evidence that may inform the future design of the Medicare Part D MTM program, which is valuable for improving pharmacotherapy outcomes and could further realize its potential when additional people from racial and ethnic minorities are enrolled.

Project description:BackgroundSources of regional variation in spending for prescription drugs under Medicare Part D are poorly understood, and such variation may reflect differences in health status, use of effective treatments, or selection of branded drugs over lower-cost generics.MethodsWe analyzed 2008 Medicare data for 4.7 million beneficiaries for prescription-drug use and expenditures overall and in three drug categories: angiotensin-converting-enzyme (ACE) inhibitors and angiotensin-receptor blockers (ARBs), 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA) reductase inhibitors (statins), and selective serotonin-reuptake inhibitors (SSRIs) and serotonin-norepinephrine reuptake inhibitors (SNRIs). Differences in per capita expenditures across hospital-referral regions (HRRs) were decomposed into annual prescription volume and cost per prescription. The ratio of prescriptions filled as branded drugs to all prescriptions filled was calculated. We adjusted all measures for demographic, socioeconomic, and health-status differences.ResultsMean adjusted per capita pharmaceutical spending ranged from $2,413 in the lowest to $3,008 in the highest quintile of HRRs. Most (75.9%) of that difference was attributable to the cost per prescription ($53 vs. $63). Regional differences in cost per prescription explained 87.5% of expenditure variation for ACE inhibitors and ARBs and 56.3% for statins but only 36.1% for SSRIs and SNRIs. The ratio of branded-drug to total prescriptions, which correlated highly with cost per prescription, ranged across HRRs from 0.24 to 0.45 overall and from 0.24 to 0.55 for ACE inhibitors and ARBs, 0.29 to 0.60 for statins, and 0.15 to 0.51 for SSRIs and SNRIs.ConclusionsRegional variation in Medicare Part D spending results largely from differences in the cost of drugs selected rather than prescription volume. A reduction in branded-drug use in some regions through modification of Part D plan benefits might lower costs without reducing quality of care. (Funded by the National Institute on Aging and others.).

Dataset Information

Nonlinear pricing in drug benefits and medication use: the case of statin compliance in Medicare Part D.

Objective

Data sources/study setting

Study design

Principal findings

Conclusion

Publications

Nonlinear pricing in drug benefits and medication use: the case of statin compliance in Medicare Part D.

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