Medicare Part D Plans Rarely Cover Brand-Name Drugs When Generics Are Available.
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ABSTRACT:
SUBMITTER: Dusetzina SB
PROVIDER: S-EPMC9297534 | biostudies-literature | 2020 Aug
REPOSITORIES: biostudies-literature
Publications
Medicare Part D Plans Rarely Cover Brand-Name Drugs When Generics Are Available.
Dusetzina Stacie B SB Cubanski Juliette J Nshuti Leonce L True Sarah S Hoadley Jack J Roberts Drew D Neuman Tricia T
Health affairs (Project Hope) 20200801 8
Recent press reports and other evidence suggest that Medicare Part D plans may be encouraging the use of brand-name drugs instead of generics. However, the scope of such practices is unclear. We examined Medicare Part D formulary coverage and tier placement of matched pairs of brand-name drugs and generics to quantify how often preferred formulary placement of brand-name drugs is occurring within and across Part D plans and to assess the cost implications for Medicare and its beneficiaries. We f ...[more]
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Project description:ImportanceIn response to scrutiny over high drug prices, manufacturers of insulin and direct-acting antiviral agents for treating hepatitis C have recently introduced authorized generic alternatives to their patented brand-name products. These authorized generic drugs have list prices at least 50% lower than the list price of the brand-name drugs, which should result in savings to patients. However, it is unclear whether these authorized generic drugs are offered on Medicare Part D formularies because they may not provide savings to plans or Medicare.ObjectiveTo assess Medicare Part D formulary coverage for 4 brand-name formulations of insulin and direct-acting antiviral agents and their authorized generic formulations.Design, setting, and participantsThis cross-sectional study used Medicare Prescription Drug Plan Formulary and Pricing Information Files from quarter 3 of 2020 and Medicare Part D plan enrollment for September 2020. Four patented brand-name drugs (sofosbuvir and velpatasvir fixed-dose combination tablets [Epclusa], ledipasvir and sofosbuvir tablets [Harvoni], insulin lispro [Humalog], and insulin aspart [Novolog]) and their authorized generic formulations for all Part D stand-alone prescription drug plans (n = 959) and Medicare Advantage prescription drug plans (n = 3148) were studied.Main outcomes and measuresBeneficiary-weighted formulary coverage of brand-name and authorized generic products; beneficiary out-of-pocket costs; and prerebate plan, manufacturer, and Medicare spending on brand-name and authorized generic products.ResultsIn quarter 3 of 2020, 97% of beneficiaries were in plans that covered brand-name drugs only or both brand-name and authorized generic drugs; approximately 3% were in plans that covered authorized generic drugs only. Observed authorized generic drug list prices were 67%, 62%, and 50% lower than list prices for Epclusa, Harvoni, and each brand-name insulin product, respectively. Medicare beneficiaries using authorized generic drugs could save $270 per year for 12 vials of Humalog and $2974 for a full course of Harvoni. Plans, however, have limited incentives to encourage authorized generic drug use because rebates for brands likely exceed savings available with authorized generic drugs, particularly for beneficiaries with spending that reaches the Medicare Part D coverage gap.Conclusions and relevanceThe results of this cross-sectional study suggest that authorized generic drugs for insulin and direct-acting antiviral agents may lower out-of-pocket spending for patients but are unlikely to provide savings for Part D plans or Medicare. Instead, these drugs allow manufacturers to offer products at a lower list price without materially lowering net prices or profits.
| S-EPMC8524353 | biostudies-literature
Project description:ImportanceThe 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.ObjectiveTo 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 participantsIn 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 measuresRatings 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.ResultsForty-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 relevanceMany 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.
| S-EPMC10114018 | biostudies-literature
Project description:This meta-analysis aimed to compare the efficacy and adverse events, either serious or mild/moderate, of all generic versus brand-name cardiovascular medicines. We searched randomized trials in MEDLINE, Scopus, EMBASE, Cochrane Controlled Clinical Trial Register, and ClinicalTrials.gov (last update December 1, 2014). Attempts were made to contact the investigators of all potentially eligible trials. Two investigators independently extracted and analyzed soft (including systolic blood pressure, LDL cholesterol, and others) and hard efficacy outcomes (including major cardiovascular adverse events and death), minor/moderate and serious adverse events. We included 74 randomized trials; 53 reported ≥1 efficacy outcome (overall sample 3051), 32 measured mild/moderate adverse events (n = 2407), and 51 evaluated serious adverse events (n = 2892). We included trials assessing ACE inhibitors (n = 12), anticoagulants (n = 5), antiplatelet agents (n = 17), beta-blockers (n = 11), calcium channel blockers (n = 7); diuretics (n = 13); statins (n = 6); and others (n = 3). For both soft and hard efficacy outcomes, 100 % of the trials showed non-significant differences between generic and brand-name drugs. The aggregate effect size was 0.01 (95 % CI -0.05; 0.08) for soft outcomes; -0.06 (-0.71; 0.59) for hard outcomes. All but two trials showed non-significant differences in mild/moderate adverse events, and aggregate effect size was 0.07 (-0.06; 0.20). Comparable results were observed for each drug class and in each stratified meta-analysis. Overall, 8 serious possibly drug-related adverse events were reported: 5/2074 subjects on generics; 3/2076 subjects on brand-name drugs (OR 1.69; 95 % CI 0.40-7.20). This meta-analysis strengthens the evidence for clinical equivalence between brand-name and generic cardiovascular drugs. Physicians could be reassured about prescribing generic cardiovascular drugs, and health care organization about endorsing their wider use.
| S-EPMC4877434 | biostudies-literature
Project description:The design of Medicare Part D causes most beneficiaries to receive fragmented health insurance, with drug and medical coverage separated. Fragmentation is potentially inefficient since separate insurers optimize over only one component of healthcare spending, despite complementarities and substitutabilities between healthcare types. Fragmentation of only some plans can also lead to market distortions due to differential adverse selection, as integrated plans may use drug formularies to induce enrollment by patients that are profitable in the medical insurance market. We study the design of insurance plans in Medicare Part D, and find that formularies reflects these two differences in incentives.
| S-EPMC6335045 | biostudies-literature
Project description:ImportanceHigh and continually increasing pharmaceutical drug spending is a major health and health policy concern in the United States.ObjectiveTo demonstrate trends in prices among popular brand-name prescription drugs.Design, setting, and participantsThis economic evaluation of drug prices focuses on 49 top-selling brand-name medications in the United States. Pharmacy claims data from January 1, 2012, through December 31, 2017, were obtained from Blue Cross Blue Shield Axis, a database that includes data from more than 35 million individuals with private pharmaceutical insurance. Drugs that exceeded $500 million in US sales or $1 billion in worldwide sales were examined.Main outcomes and measuresThe median sum of out-of-pocket and insurance costs paid by patients or insurers for common prescriptions, presented annually and monthly, was the primary outcome.ResultsIn total, 132 brand-name prescription drugs were identified in 2017 that met the inclusion criteria. Of this total, the study focused on 49 top-selling drugs that exceeded 100 000 pharmacy claims. Substantial cost increases among these drugs was near universal, with a 76% median cost increase from January 2012 through December 2017, and almost all drugs (48 [98%]) displaying regular annual or biannual price increases. Of the 36 drugs that have been available since 2012, 28 (78%) have seen an increase in insurer and out-of-pocket costs by more than 50%, and 16 (44%) have more than doubled in price. Insulins (ie, Novolog, Humalog, and Lantus) and tumor necrosis factor inhibitors (ie, Humira and Enbrel) demonstrated highly correlated price increases, coinciding with some of the largest growth in drug costs. Relative price changes did not differ between drugs that entered the market in the past 3 to 6 years and those that have been on the market longer (number of drugs, 13 vs 36; median, 29% increase from January 2015 through December 2017; P = .81) nor between drugs with or without a Food and Drug Administration-approved therapeutic equivalent (number of drugs, 17 vs 32; median, 79% vs 73%; P = .21). Changes in prices paid were highly correlated with third-party estimates of changes in drug net prices (ρ = 0.55; P = 3.8 × 10-5), suggesting that the current rebate system, which incentivizes high list prices and greater reliance on rebates, increases overall costs.Conclusions and relevanceThe growth of drug spending in the United States associated with government-protected market exclusivity is likely to continue; greater price transparency is warranted.
| S-EPMC6547085 | biostudies-literature
Project description: Not available
| S-EPMC1421463 | 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
Project description:PURPOSE:To quantify costs of eye care providers' Medicare Part D prescribing patterns for ophthalmic medications and to estimate the potential savings of generic or therapeutic drug substitutions and price negotiation. DESIGN:Retrospective cross-sectional study. PARTICIPANTS:Eye care providers prescribing medications through Medicare Part D in 2013. METHODS:Medicare Part D 2013 prescriber public use file and summary file were used to calculate medication costs by physician specialty and drug. Savings from generic or therapeutic drug substitutions were estimated for brand drugs. The potential savings from price negotiation was estimated using drug prices negotiated by the United States Veterans Administration (USVA). MAIN OUTCOME MEASURES:Total cost of brand and generic medications prescribed by eye care providers. RESULTS:Eye care providers accounted for $2.4 billion in total Medicare part D prescription drug costs and generated the highest percentage of brand name medication claims compared with all other providers. Brand medications accounted for a significantly higher proportion of monthly supplies by volume, and therefore, also by total cost for eye care providers compared with all other providers (38% vs. 23% by volume, P < 0.001; 79% vs. 56% by total cost, P < 0.001). The total cost attributable to eye care providers is driven by glaucoma medications, accounting for $1.2 billion (54% of total cost; 72% of total volume). The second costliest category, dry eye medications, was attributable mostly to a single medication, cyclosporine ophthalmic emulsion (Restasis, Allergan, Irvine, CA), which has no generic alternative, accounting for $371 million (17% of total cost; 4% of total volume). If generic medications were substituted for brand medications when available, $148 million would be saved (7% savings); if generic and therapeutic substitutions were made, $882 million would be saved (42% savings). If Medicare negotiated the prices for ophthalmic medications at USVA rates, $1.09 billion would be saved (53% savings). CONCLUSIONS:Eye care providers prescribe more brand medications by volume than any other provider group. Efforts to reduce prescription expenditures by eye care providers should focus on increasing the use of generic medications, primarily through therapeutic substitutions. Policy changes enabling Medicare to negotiate prescription drug prices could decrease costs to Medicare.
| S-EPMC5732892 | biostudies-literature
Project description:BackgroundGeneric drugs are used by millions of patients for economic reasons, so their evaluation must be highly transparent.ObjectiveTo assess the quality of reporting of bioequivalence trials comparing generic to brand-name drugs.Methodology/principal findingsPubMed was searched for reports of bioequivalence trials comparing generic to brand-name drugs between January 2005 and December 2008. Articles were included if the aim of the study was to assess the bioequivalency of generic and brand-name drugs. We excluded case studies, pharmaco-economic evaluations, and validation dosage assays of drugs. We evaluated whether important information about funding, methodology, location of trials, and participants were reported. We also assessed whether the criteria required by the Food and Drug Administration (FDA) and the European Medicine Agency (EMA) to conclude bioequivalence were reported and that the conclusions were in agreement with the results. We identified 134 potentially relevant articles but eliminated 55 because the brand-name or generic drug status of the reference drug was unknown. Thus, we evaluated 79 articles. The funding source and location of the trial were reported in 41% and 56% of articles, respectively. The type of statistical analysis was reported in 94% of articles, but the methods to generate the randomization sequence and to conceal allocation were reported in only 15% and 5%, respectively. In total, 65 articles of single-dose trials (89%) concluded bioequivalence. Of these, 20 (31%) did not report the 3 criteria within the limits required by the FDA and 11 (17%) did not report the 2 criteria within the limits required by the EMA.Conclusions/significanceImportant information to judge the validity and relevance of results are frequently missing in published reports of trials assessing generic drugs. The quality of reporting of such trials is in need of improvement.
| S-EPMC3157430 | biostudies-literature