Changes in Medicare Part B Spending for Biologic Drugs After Biosimilar Entry Into the Market.
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ABSTRACT:
SUBMITTER: Dean EB
PROVIDER: S-EPMC8796923 | biostudies-literature | 2021 Sep
REPOSITORIES: biostudies-literature
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Changes in Medicare Part B Spending for Biologic Drugs After Biosimilar Entry Into the Market.
Dean Emma Boswell EB Bond Amelia M AM
JAMA health forum 20210917 9
This cross-sectional study describes changes in annual Medicare Part B spending for biologic drugs after biosimilar entry, focusing on the first 4 products to experience biosimilar competition: filgrastim, infliximab, epoetin alpha, and pegfilgrastim. ...[more]
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Project description:ObjectiveBillions of public dollars are spent each year on biologic disease-modifying antirheumatic drugs (DMARDs), but the drivers of recent increases in biologic DMARD spending are unclear. This study was undertaken to characterize changes in total spending and unit prices for biologic DMARDs in Medicare and Medicaid programs and quantified the major sources of these spending increases.MethodsWe accessed drug spending data from years 2012-2016, covering all Medicare Part B (fee-for-service), Medicare Part D, and Medicaid enrollees. After calculating 5-year changes in total spending and unit prices for each biologic DMARD as well as in aggregate, we performed standard decomposition analyses to isolate 4 sources of spending growth: drug prices, uptake (number of recipients), treatment intensity (mean number of doses per claim), and treatment duration (annual number of claims per recipient), both excluding and including time-varying rebates.ResultsFrom 2012 to 2016, annual spending on public-payer claims for the 10 biologic DMARDs included in this study more than doubled ($3.8 billion to $8.6 billion), with median drug price increases of 51% in Medicare Part D (mean 54%) and 8% in Medicare Part B (mean 21%). With adjustment for general inflation, unit price increases alone accounted for 57% of the 5-year, $3.0 billion spending increase in Part D, while 37% of the spending increase was from increased uptake. Accounting for time-varying rebates, prices were still responsible for 54% of increased spending. Unit prices and spending were lower under Medicaid than under Medicare Part D, though temporal trends and contributors were similar.ConclusionPostmarket drug price changes alone account for the majority of the recent spending growth in biologic DMARDs. Policy interventions targeting price increases, particularly those under Medicare Part D plans, may help mitigate financial burdens for public payers and biologic DMARD recipients.
| S-EPMC6994362 | biostudies-literature
Project description:ImportanceThe US Department of Health and Human Services (HHS) has proposed to reform drug pricing in Medicare Part B, which primarily covers physician-administered drugs and biologic agents. One HHS proposal would shift coverage of certain drugs from Medicare Part B to Part D, which is administered by private prescription drug plans.ObjectiveTo estimate the association of changes of a shift in Medicare Part B to Part D with total drug spending and patient cost-sharing.Design, setting, and participantsRetrospective drug cohort study of the 75 brand-name drugs associated with the highest Part B expenditures among fee-for-service Medicare beneficiaries in 2016.Main outcomes and measuresEstimated total Medicare spending in Part B and Part D; annual out-of-pocket costs in Part B and under the standard 2018 Part D benefit; and proportion of drugs in Part D's protected drug classes (immunosuppressants for prophylaxis of organ transplant rejection, antidepressants, antipsychotics, anticonvulsants, antiretrovirals, and antineoplastics).ResultsAt 2018 prices, total Medicare Part B spending for the 75 brand-name drugs with the highest Part B expenditures was estimated to be $21.6 billion annually. Under the proposed policy, total Part D drug spending for these drugs was estimated to range between $17.6 billion and $20.1 billion after rebates, corresponding to a 6.9% to 18.3% decrease in drug spending in Part D compared with Part B. Of the 75 drugs studied, 33 (44.0%) drugs, accounting for $9.5 billion (43.9%) in Part B spending, were in protected Part D classes where plans must cover essentially all drugs. For 67 drugs with available information, the prices for 65 (97.0%) were a median of 45.8% to 59.7% lower in comparator high-income countries than Part B drug prices. Median patient cost-sharing in Part B for all 75 brand-name drugs was $4683 (interquartile range [IQR], $1069-$9282) per year. Shifting Part B drugs to the 2018 standard Part D benefit was projected to decrease out-of-pocket costs by a median of $860 (IQR, -$3884 to $496) among Medicare beneficiaries without Medicaid or Part B supplemental insurance (Medigap). For beneficiaries who would qualify for the low-income subsidy program in Part D, cost-sharing would be lower in Part D than in Part B for all drugs. For beneficiaries with Medigap insurance, estimated Part D out-of-pocket costs exceeded average Medigap premium costs by a median of $1460 for those with Part D coverage and by a median of $1952 for those without Part D coverage.Conclusions and relevanceAlthough the HHS proposal to shift certain drugs from Medicare Part B to Part D may reduce total drug spending, it may increase out-of-pocket costs for some Medicare beneficiaries, including those with Medicare supplement insurance. The Department of Health and Human Services should ensure that the proposed reforms benefit both patients and payers.
| S-EPMC6439690 | biostudies-literature
Project description:ImportanceLittle is known about how out-of-pocket burden differs between Medicare and commercial insurance for ultra-expensive drugs.ObjectiveTo investigate out-of-pocket spending for ultra-expensive drugs in the Medicare Part D program vs commercial insurance.Design, setting, and participantsThis was a retrospective, population-based cohort study of individuals using ultra-expensive drugs included in a 20% nationally random sample of prescription drug claims from Medicare Part D and individuals aged 45 to 64 years using ultra-expensive drugs included in a large national convenience sample of outpatient pharmaceutical claims from commercial insurance plans. Claims data from 2013 through 2019 were used, and data were analyzed in February 2023.Main outcomes and measuresClaims-weighted mean out-of-pocket spending per beneficiary per drug by insurance type, plan, and age.ResultsIn 2019, 37 324 and 24 159 individuals using ultra-expensive drugs were identified in the 20% Part D and commercial samples, respectively (mean [SD] age, 66.2 [11.7] years; 54.9% female). A statistically significant higher share of commercial enrollees vs Part D beneficiaries were female (61.0% vs 51.0%; P < .001), and a statistically significantly lower share were using 3 or more branded medications (28.7% vs 42.6%; P < .001). Mean out-of-pocket spending per beneficiary per drug in 2019 was $4478 in Part D (median [IQR], $4169 [$3369-$5947]) compared with $1821 for commercial (median [IQR], $1272 [$703-$1924]); these differences were statistically significant every year. Differences in out-of-pocket spending comparing commercial enrollees aged 60 to 64 years and Part D beneficiaries aged 65 to 69 years exhibited similar magnitudes and trends. By plan, mean out-of-pocket spending per beneficiary per drug in 2019 was $4301 (median [IQR], $4131 [$3000-$6048]) in Medicare Advantage prescription drug (MAPD) plans, $4575 (median [IQR], $4190 [$3305-$5799]) in stand-alone prescription drug plans (PDPs), $1208 (median [IQR], $752 [$317-$1240]) in health maintenance organization plans, $1569 (median [IQR], $838 [$481-$1472]) in preferred provider organization plans, and $4077 (median [IQR], $2882 [$1075-$4226]) in high-deductible health plans. There were no statistically significant differences between MAPD plans and stand-alone PDPs in any study year. Mean out-of-pocket spending was statistically significantly higher in MAPD plans compared with health maintenance organization plans and in stand-alone PDPs compared with preferred provider organization plans in each study year.Conclusions and relevanceThis cohort study demonstrated that the $2000 out-of-pocket cap included in the Inflation Reduction Act may substantially moderate the potential increase in spending faced by individuals who use ultra-expensive drugs when moving from commercial insurance to Part D coverage.
| S-EPMC10220512 | biostudies-literature
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.).
| S-EPMC3285245 | biostudies-literature
Project description:This article examines the budgetary implications of high-priced accelerated approval drugs by estimating Medicare spending on these drugs from 2015 through 2019.
| S-EPMC8796889 | biostudies-literature
Project description:OBJECTIVE:To understand the impact of changes in physician market structure on clinical outcomes and health care utilization. DATA SOURCES:2005-2012 Medicare fee-for-service claims and enrollment data. STUDY DESIGN:We consider the effect of cardiology market structure on utilization and health outcomes for four patient populations. We estimate the risk-adjusted impact of competition using multivariate regression models. PRINCIPAL FINDINGS:The study finds that an increase in consolidation leads to statistically and economically significant increases in negative health outcomes. For example, we find that moving from a zip code at the 25th percentile of cardiology market concentration to one at the 75th percentile would be associated with 5 to 7 percent increases in risk-adjusted mortality for three of the sample populations. We also found higher expenditures in more concentrated markets. For example, moving from a zip code at the 25th percentile of cardiology market concentration to one at the 75th would be associated with 7 to 11 percent increases in expenditures, depending on sample population. CONCLUSIONS:Our estimates indicate that increases in cardiology market concentration are associated with worse health outcomes and higher health care expenditures. Some effects may be attributed to vertical as well as horizontal changes.
| S-EPMC6153168 | biostudies-literature
Project description:BackgroundFreestanding emergency departments (FrEDs) could reduce wait times in overcrowded emergency departments (EDs), but they might also increase usage and overall spending for emergency care. We investigate the relationship between the number of FrEDs entering a local market and overall spending on emergency care.MethodsWe accessed data from Arizona, Florida, North Carolina, and Texas in Blue Cross Blue Shield Axis; a limited data set of deidentified insurance data claims that we linked to Public Use Microdata Area (PUMA) data from the American Community Survey; and lists of licensed FrEDs from state agencies. Regression analysis was used to estimate the association between changes in the number of FrEDs in 495 PUMAs and total spending on emergency care, out-of-pocket spending, utilization, and price per visit from January 2013 to December 2017. Final estimates came from a PUMA-level fixed-effects model, with controls for state, quarter, and PUMA-level demographics.ResultsEntry of an additional FrED in a PUMA was associated with a 3.6 percentage point (pp; CI = 2.4 to 4.9) increase in emergency provider reimbursement per insured beneficiary in Texas, Florida, and North Carolina. There was no change in spending (2.5 pp; CI = -8.2 to 3.1) associated with a FrED's entry in Arizona. Entry of an additional FrED was associated with a 0.18 (CI = 0.12 to 0.23) increase in the number of emergency care visits per 100 enrollees in Texas, Florida, and Arizona. In contrast, entry of another FrED was not associated with a change in utilization (-0.03; CI = -0.09 to 0.02) in North Carolina. Estimated out-of-pocket payments for emergency care increased 3.6 pp (CI = 2.5 to 4.8) with the entry of a FrED in Texas, Florida, and Arizona, but declined by 15.3 pp (CI = -26.8 to -3.7) in North Carolina.ConclusionsRather than functioning as substitutes for hospital-based EDs, FrEDs have increased local market spending on emergency care in three of four states' markets where they have entered. State policy makers and researchers should carefully track spending and utilization of emergency care as FrEDs disseminate to better understand their potential health benefits and cost implications for patients.
| S-EPMC6899627 | biostudies-literature
Project description:ImportanceMedicare Part B drug expenditures have increased in recent years. This trend is likely to persist given the increased use and availability of biologics.ObjectivesTo assess the extent to which Medicare Part B spending growth was associated with changes in price vs quantity, and how these trends interacted with entry of new drugs into the marketplace.Design, setting, and participantsThis cross-sectional study quantified the degree of spending concentration and the association between price and use of Part B drugs among fee-for-service Medicare beneficiaries. Data on use and spending for separately payable Part B drugs were included. Source data were aggregated to the drug-year level and reported from 2016 to 2020. Descriptive decomposition and index analyses quantified the relative association of price and use changes separately for existing single-source drugs, existing drugs that faced competition, and new drugs that entered the market. Data analysis was performed from June to December 2022.Main outcomes and measuresPart B drug spending by the fee-for-service Medicare program and beneficiaries, as well as use, defined as dosage units and beneficiaries using the drugs.ResultsThe study included 535 unique Part B drug products. From 2016 to 2020, 15 or fewer products comprised half of all Part B drug expenditures. The set of 7 drugs that comprised the top 25% of spending was very consistent over time, and all were biologics. Part B drug products that cost $1.85 or less per administration accounted for more than half of the doses administered in 2020. Spending on Part B drugs increased by $15 billion from 2016 to 2020. The entry of new, nonbiosimilar drugs during this period accounted for $12 billion of this increased spending (80%), while shifts in use and price increases among existing single-source brand drugs accounted for the remaining increase in spending. Part B spending decreased among the subset of existing drugs facing generic or biosimilar competition. Among single-source drugs on the market in 2016, the index that varied dosage units exceeded the index that varied price in all years, confirming that changes in use were associated more with spending growth for those drugs.Conclusions and relevanceIn this cross-sectional study of Medicare Part B drug expenditures, spending was found to be concentrated among a small number of drugs. The entry of new products was a key factor associated with recent increases in Part B drug spending. These findings suggest that policies targeting top-selling drugs may have greater potential to curb Part B drug spending than those targeting price growth.
| S-EPMC10492179 | biostudies-literature
Project description:To describe neurologists' Medicare Part D prescribing patterns and the potential effect of generic substitutions and price negotiation, which is currently prohibited.The 2013 Medicare Part D Prescriber Public Use and Summary files were used. Payments for medications were aggregated by provider and drug (brand or generic). Payment, proportion of generic claims or day's supply, and median payment per monthly supply of medication were calculated by physician specialty and drug. Savings from generic substitution were estimated for brand drugs with a generic available. Medicare prices were compared to drug prices negotiated by the federal government with pharmaceutical manufacturers for the Veterans Administration (VA).Neurologists comprised 13,060 (1.2%) providers with $5.0 billion (4.8%) in total payments, third highest of all specialties, with a median monthly payment of $141 (interquartile range $85-225). Multiple sclerosis drugs had the highest payments ($1.8 billion). Within neurologic disease groups ($3.4 billion in payments), 54.2%-91.8% of monthly supplies were generic, but 11.9%-71.3% of the payment was for generic medications. Generic substitution resulted in a $269 million (6.5%) payment decrease. VA pricing resulted in $1.5 billion (44.5% of $3.4 billion) in savings.High payment per monthly supply of medication underlies the high total neurology drug payments and is driven by multiple sclerosis drugs. Lowering drug expenditures by Medicare should focus on drug prices.
| S-EPMC4836880 | biostudies-other
Project description:Policy Points Only a small minority of new drugs in "nonprotected" classes are widely covered by Part D plans nationwide in the year after US Food and Drug Administration (FDA) approval. Part D plans frequently apply utilization management restrictions such as prior authorizations to newly approved drugs in both protected and nonprotected classes. Drug price influences both formulary inclusion (in nonprotected classes) and coverage restrictions (in both protected and nonprotected classes), while other drug characteristics such as therapeutic benefits are not consistently associated with formulary design. Plans do not seem to favor the minority of drugs that are determined to offer added therapeutic benefit over existing alternatives.ContextMedicare Part D is an outpatient prescription drug benefit for older Americans covering more than 46 million beneficiaries. Except for mandatory coverage for essentially all drugs in six protected classes, plans have substantial flexibility in how they design their formularies: which drugs are covered, which drugs are subject to restrictions, and what factors determine formulary placement. Our objective in this paper was to document the extent to which Part D plans limit coverage of newly approved drugs.MethodsWe examined the formulary design of 4,582 Part D plans from 2014 through 2018 and measured (1) the decision to cover newly approved drugs in nonprotected classes, (2) use of utilization management tools in protected and nonprotected classes, and (3) the association between plan design and drug-level characteristics such as 30-day cost, therapeutic benefit, and the US Food and Drug Administration (FDA) expedited regulatory pathway.FindingsThe FDA approved 109 new drugs predominantly used in outpatient settings between 2013 and 2017. Of these, 75 fell outside of the six protected drug classes. One-fifth of drugs in nonprotected classes (15 out of 75) were covered by more than half of plans during the first year after approval. Coverage was often conditional on utilization management strategies in both protected and nonprotected classes: only seven drugs (6%) were covered without prior authorization requirements in more than half of plans. Higher 30-day drug costs were associated with more widespread coverage in nonprotected classes: drugs that cost less than $150 for a 30-day course were covered by fewer than 20% of plans while those that cost more than $30,000 per 30 days were covered by more than 50% of plans. Plans were also more likely to implement utilization management tools on high-cost drugs in both protected and nonprotected classes. A higher proportion of plans implemented utilization management strategies on covered drugs with first-in-class status than drugs that were not first in class. Other drug characteristics, including availability of added therapeutic benefit and inclusion in FDA expedited regulatory approval, were not consistently associated with plan coverage or formulary restrictions.ConclusionsNewly approved drugs are frequently subject to formulary exclusions and restrictions in Medicare Part D. Ensuring that formulary design in Part D is linked closely to the therapeutic value of newly approved drugs would improve patients' welfare.
| S-EPMC9205672 | biostudies-literature