Association of Branded Prescription Drug Rebate Size and Patient Out-of-Pocket Costs in a Nationally Representative Sample, 2007-2018

Impact of payer rejections and out-of-pocket costs on patient access to bempedoic acid therapy

Background

Early uptake of novel cholesterol-lowering therapies was limited by extensive utilization management practices and high cost. Whether similar challenges affected access to bempedoic acid (BA) is unknown.

Methods

For all patients prescribed BA from the date of FDA approval (February 2020) through 12/31/2022 identified using nationwide pharmacy transaction data, we assessed whether their first prescription was approved or rejected. Multivariable logistic regression was performed to assess factors associated with approval. Among those approved, prescription fill rates were evaluated by out-of-pocket cost. For those with rejected prescriptions, changes in lipid-lowering therapy after rejection were described.

Results

Of 116,176 patients (median age 67 years; 56.6 % women) initially prescribed BA, 80,056 (68.9 %) received approval. Factors associated with approval included: commercial insurance (odds ratio [OR] 1.62 [95 % confidence interval (CI) 1.56, 1.68] vs. government insurance, P < 0.001), cardiology specialty prescriber (OR 1.39 [1.34, 1.44] vs. primary care physicians, P < 0.001), and prescriber volume (OR 1.44 [1.38, 1.51] for fourth [highest] quartile vs. first [lowest] quartile prescribers, P < 0.001). Of those who received approval, 82.4 % (n = 65,969) filled the prescription, while 17.3 % (n = 14,087) abandoned the prescription. Abandonment rates increased with increasing patient OOP costs. Escalation in an alternative lipid-lowering therapy over the subsequent year was observed in 36.2 % and 33.3 % of patients with rejected and abandoned prescriptions, respectively.

Conclusion

Nearly half of patients prescribed BA failed to receive therapy due to a combination of payer rejections and prescription abandonment. Arduous utilization management criteria or high OOP costs put patients at high risk for failure of therapy initiation.

Pharmacy Benefit Managers: History, Business Practices, Economics, and Policy

Importance

Pharmacy benefit managers (PBMs) play a major role in the provision of pharmacy services by acting as intermediaries between pharmacies, plan sponsors (insurance companies and employers), pharmaceutical manufacturers, and drug wholesalers. As their role and visibility have increased, PBMs have come under increased scrutiny from policymakers. However, no prior literature has systematically described the history, business practices, and policymaking of PBMs.

Objective

To provide an overview of the PBM industry, including its history, the evolution of services provided by PBMs, an assessment of the current policy landscape, and analysis of how proposed policies could affect PBM practices and patient care.

Evidence

This work reviews historical events; previous and current industry practices and publications; prior academic literature, existing statutes, regulations, and court cases; and recent legislative reforms and agency actions regarding PBMs.

Findings

Pharmacy benefit managers evolved in parallel with the pharmaceutical manufacturing and health insurance industries. The evolution of the PBM industry has been characterized by horizontal and vertical integration and market concentration. The PBM provides 5 key functions: formulary design, utilization management, price negotiation, pharmacy network formation, and mail order pharmacy services. Criticism of the PBM industry centers around the lack of competition, pricing, agency problems, and lack of transparency. Legislation to address these concerns has been introduced at the state and federal levels, but the potential for these policies to address concerns about PBMs is unknown and may be eclipsed by private sector responses.

Conclusions and Relevance

Pharmacy benefit managers are intermediaries in the pharmaceutical supply chain and perform multiple roles in the management and distribution of pharmaceuticals to patients. When regulating PBMs, it is important to adopt policies that address market failure problems by improving PBM competition as opposed to policies designed to serve the narrow financial interests of other market participants (eg, pharmacies, pharmaceutical manufacturers) without meeting the needs of consumers.

Patents and regulatory exclusivities on FDA-approved insulin products: A longitudinal database study, 1986-2019

BACKGROUND

Insulin is the primary treatment for type 1 and some type 2 diabetes but remains costly in the United States, even though it was discovered more than a century ago. High prices can lead to nonadherence and are often sustained by patents and regulatory exclusivities that limit competition on brand-name products. We sought to examine how manufacturers have used patents and regulatory exclusivities on insulin products approved from 1986 to 2019 to extend periods of market exclusivity.

METHODS AND FINDINGS

We used the publicly available Food and Drug Administration (FDA) Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) to identify all approved biosynthetic insulin products. Individual products approved under the same New Drug Application (NDA)-e.g., a vial and pen-were considered as separate products for the purposes of analysis. We recorded all patents and regulatory exclusivities listed in the Orange Book on each product and used Google Patents to extract the timing of patent application and whether patents were obtained on delivery devices or others aspects of the product. The primary outcome was the duration of expected protection, which was determined by subtracting the FDA approval date for each product from its last-to-expire patent or regulatory exclusivity (whichever occurred later). We performed a secondary analysis that considered overall protection on insulin lines-defined as groups of products approved under the same NDA with the same active ingredients manufactured by the same company. We also examined competition from follow-on insulin products-defined as products approved with the same active ingredients as originators but manufactured by different companies (approved via a specific drug approval pathway under section 505(b)(2) of the Food, Drug, and Cosmetic Act). During the study period, the FDA approved 56 individual products across 25 different insulin lines and 5 follow-ons across 3 different insulin lines. Thirty-three (59%) of the 56 products were drug-device combinations. Manufacturers of 9 products approved during the study period obtained patents filed after FDA approval that extended their duration of expected protection (by a median of 6 years). Approximately 63% of all patents on drug-device combinations approved during the study period were related to delivery devices. The median duration of expected protection on insulin products was 16.0 years, and the median protection on insulin lines was 17.6 years. An important limitation of our analysis is that manufacturers may continue to add patents on existing insulin products while competitors may challenge patents; therefore, periods of protection may change over time.

CONCLUSIONS

Among several strategies that insulin manufacturers have employed to extend periods of market exclusivity on brand-name insulin products are filing patents after FDA approval and obtaining a large number of patents on delivery devices. Policy reforms are needed to promote timely competition in the pharmaceutical market and ensure that patients have access to low-cost drugs.

Prevalence and patterns of catastrophic spending for antidiabetic medication in 2020

BACKGROUND: Medication costs for antidiabetic drugs have risen significantly in the United States, causing concerns about the affordability of these essential treatments. OBJECTIVE: To examine out-of-pocket spending for antidiabetic medication and evaluate what proportion of Americans reach catastrophic spending levels during the year. METHODS: This retrospective cohort analysis of nationally representative data from the 2020 Medical Expenditure Panel Survey (MEPS) was analyzed for respondents that reported a diabetes diagnosis. Prescription drug costs were identified from the MEPS Prescribed Medicines File, which included both total prescription payment and out-of-pocket payment for each medication fill. Catastrophic spending thresholds were evaluated based on the World Health Organization's definition, which is spending greater than 40% of a household's nonsubsistence income on health care payments. Statistical analysis was performed with Stata 17 and sample weights were applied adjusting for the MEPS complex survey design to produce national estimates. Descriptive statistics were reported as weighted counts and percentages for categorical variables and as medians with interquartile range for continuous variables. Comparisons of reaching catastrophic spending thresholds across study variables were evaluated with Pearson chi-square tests. A P value less than 0.05 was considered statistically significant in this study. RESULTS: The study included data from a weighted US population of 29.5 million Americans with diabetes. Among this group, 23.8 million (81%) reported use of a prescription medication to treat diabetes. Total reported out-of-pocket payments paid by the patient for antidiabetic medication surpassed $5.2 billion with the largest portion attributable to the insulin subclass, which accounted for 42% or $2.2 billion. The data suggest an estimated 3 million Americans (10.3%) experienced out-of-pocket spending for antidiabetic drugs that reached catastrophic spending thresholds in 2020. CONCLUSIONS: Affordability of prescribed medication in community-dwelling persons with diabetes remains a significant challenge for many Americans.

Where Do Real-Time Prescription Benefit Tools Fit in the Landscape of High US Prescription Medication Costs? A Narrative Review

The problem of unaffordable prescription medications in the United States is complex and can result in poor patient adherence to therapy, worse clinical outcomes, and high costs to the healthcare system. While providers are aware of the financial burden of healthcare for patients, there is a lack of actionable price transparency at the point of prescribing. Real-time prescription benefit (RTPB) tools are new electronic clinical decision support tools that retrieve patient- and medication-specific out-of-pocket cost information and display it to clinicians at the point of prescribing. The rise in US healthcare costs has been a major driver for efforts to increase medication price transparency, and mandates from the Centers for Medicare & Medicaid Services for Medicare Part D sponsors to adopt RTPB tools may spur integration of such tools into electronic health records. Although multiple factors affect the implementation of RTPB tools, there is limited evidence on outcomes. Further research will be needed to understand the impact of RTPB tools on end results such as prescribing behavior, out-of-pocket medication costs for patients, and adherence to pharmacologic treatment. We review the terminology and concepts essential in understanding the landscape of RTPB tools, implementation considerations, barriers to adoption, and directions for future research that will be important to patients, prescribers, health systems, and insurers.

The influence of Medicare Part D on the list pricing of brand drugs

OBJECTIVE

To compare the Medicare Part D market share of brand drugs with their net-to-list price ratio.

DATA SOURCES AND STUDY SETTING

SSR Health Brand Net Price Tool and Medical Expenditure Panel Survey, 2007-2019.

STUDY DESIGN

For each drug, we calculated the ratio of net to list price and the percent of users that were Medicare-eligible. We compared these cross-sectionally in each year and estimated a difference-in-differences model comparing drugs with high or low Medicare market shares (MMS) after following changes to program incentives in 2010.

DATA COLLECTION/EXTRACTION METHODS

The sample included brand drugs without generic competitors appearing in both datasets.

PRINCIPAL FINDINGS

Net-to-list price ratios were negatively correlated with MMS in the later years of our sample. In 2019, a 10% increase in MMS was associated with a significant 4.6% [95% CI: 2.1%, 7.1%] decrease in net-to-list ratio. Difference-in-differences showed net-to-list price ratios of drugs with above median MMS fell relative to those with below median MMS. By 2019, we observe an absolute reduction of -0.2 [95% CI: -0.29, -0.11], representing 28% reduction relative to the average ratio in 2010.

CONCLUSIONS

Greater exposure to the Medicare Part D market was associated with larger differences between net and list prices of drugs.

The Impact of Sharing Drug Rebates at the Point of Sale on Out-of-Pocket Payments for Enrollees in Employer-Sponsored Insurance

OBJECTIVES

This study aimed to estimate the impact of sharing drug rebates at the point of sale on out-of-pocket spending by linking estimated rebates to administrative claims data for employer-sponsored insurance enrollees in 2018.

METHODS

We applied the drug rebate rate to the retail price of each brand name drug fill, allocated the reductions to out-of-pocket spending based on cost-sharing provisions, and aggregated each individual's out-of-pocket spending across drug fills. We assumed that generic drugs have no rebates for employer-sponsored insurance. We assessed the impact of sharing rebates at the point of sale on out-of-pocket spending overall, for the therapeutic classes and specific drugs with the highest average out-of-pocket spending per user, and by health plan type.

RESULTS

Across 4 simulations with different assumptions about the degree of cross-fill effects, we found that 10.4% to 12.2% of enrollees in our sample would have realized savings on out-of-pocket spending if rebates were shared to the point of sale. Among those with savings, approximately half would save $50 or less, and 10% would save > $500 annually. We calculated that a premium increase of $1.06 to $1.41 per member per month among the continuously enrolled, insured population would be sufficient to finance the out-of-pocket savings in our sample.

CONCLUSIONS

Our study suggests that, for a small percentage of enrollees, sharing drug rebates at the point of sale would likely improve the affordability of high-priced brand name drugs, especially drugs that face significant competition.

Trends of Prescription Drug Manufacturer Rebates in Commercial Health Insurance Plans, 2015-2019

This economic evaluation examines the magnitude and trend of prescription drug rebates in commercial markets from 2015 to 2019 and identifies insurance plan factors associated with rebates.