The Inflation Reduction Act: Implications for Medicare spending and access to biologic therapies for chronic rhinosinusitis with nasal polyposis and asthma

KEY POINTS

In 2021, Medicare spending on biologics was $926 million in Part B (FFS) and $1.3 billion in Part D (FFS/MA). Between 2017 and 2021, annual Medicare spending on biologics increased by approximately 200%. Between 2023 and 2025, Medicare Part D OOP costs for biologics will decrease by an estimated 50%-60%.

Pharmaceutical demand response to utilization management

Prescription drug insurance increasingly imposes prior authorization (requiring providers to request coverage before claim approval) to manage utilization. Prior authorization has been criticized because of its administrative burden on providers. The primary alternative to managing utilization is imposing out-of-pocket (OOP) payment to incentivize beneficiaries to seek lower-cost care, effectively providing beneficiaries with partial insurance. Would beneficiaries prefer indirectly paying for prior authorization through higher premiums; or would they prefer prior authorization was replaced by higher OOP costs? This tradeoff depends on how much OOP costs could be displaced by prior authorization, which depends on their relative impact on demand. I estimate the effect of prior authorization and OOP costs on pharmaceutical demand in Medicare Part D, addressing endogeneity caused by unobserved drug quality and selection into plans. Despite criticism of prior authorization, I find that Medicare beneficiaries would prefer higher premiums to pay for prior authorization, over higher OOP costs.

Opioid and CNS-Depressant Medication Prescribing among Older Adults Enrolled in Medicare Advantage Versus Fee-for-Service Medicare

OBJECTIVE

To examine whether prescription fills of opioids and central nervous system (CNS) depressants are lower in Medicare Advantage (MA) plans, which aim to provide more coordinated and integrated care, than fee-for-service (FFS) Medicare.

METHODS

Data from the 2015 National Health and Aging Trends Study linked with Medicare claims. Community-dwelling adults ≥65 enrolled in Medicare Part D were included (n = 5,652). Prescription fills of opioids, antipsychotics, benzodiazepines, gabapentinoids, and co-prescriptions of opioids with the other medications in MA versus FFS Medicare were examined using multivariate logistic models. Propensity score weighting was applied to account for differences in characteristics between MA and FFS beneficiaries.

RESULTS

MA enrollees were less likely to fill prescriptions for benzodiazepines (15.6% versus 19.0%; marginal difference: -3.4%, t = -2.54, df = 56, p = 0.01), and co-prescriptions of opioids and gabapentinoids (5.1% versus 6.7%; marginal difference: -1.6%, t = -2.07, df = 56, p = 0.04) than FFS beneficiaries. There were no significant differences among the other prescription outcomes.

CONCLUSIONS

MA was associated with slightly lower likelihood of receiving opioids and some CNS depressants.

Heterogeneous effects of consolidation on premiums in Medicare Part D

Medicare Part D plans provide prescription drug coverage to 45 million seniors. The recent past has seen significant consolidation amongst plan providers, notable CVS's 2018 acquisition of Aetna and Cigna's 2018 acquisition of Express Scripts. In this paper, we analyze the effect of consolidation of standalone Part D plan providers on premiums using plausibly exogenous variation in concentration induced by the 2011 merger between CVS and Universal American. We find that the increase in concentration for standalone Medicare Part D plans that resulted from this merger led to higher average premiums, a total of nearly $170 million per year. We find further that, consistent with the assumptions behind standard antitrust practice, the effects of the increase in concentration were heterogeneous: moderately (or more) concentrated markets that saw a meaningful increase in concentration saw significant increases in premiums, while premiums in other markets did not change significantly.

Trends and patterns of neurotology drug prescriptions on a nationwide insurance database

OBJECTIVE

To examine neurotologists' 2013 to 2016 Medicare Part-D data and evaluate commonly prescribed medications, longitudinal changes in prescribing patterns, presumed associated pathologies, and cost distribution across United States.

METHODS

Comprehensive prescription data of Part-D-participating neurotologists was quiered from the 2013 to 2016 Medicare Part-D database. Outcome variables consisted of the 25 most commonly prescribed + refilled medications, cost distribution per medication, presumed associated pathologies, and standardized prescription cost across United States.

RESULTS

Of the 594 available U.S. neurotologists, 336 (57%) were found in the Medicare Part-D database. In 2016, total prescription costs were $4 483 268 with an averaged $13 343 ± $18 698 per neurotologist. The three most frequently filled drugs were fluticasone propionate, ciprofloxacin, and triamterene-hydrochlorothiazide. From 2013 to 2016, the greatest change in prescription pattern was observed with azelastine (+188%), montelukast sodium (+104%), mupirocin (+63%), and mometasone (-91%), whereas the greatest change in relative drug cost distribution was seen in ofloxacin, (+695.7%) neomycin-polymyxin-hydrocortisone (+262.1%), and mometasone (-83%). Triamterene-hydrochlorothiazide, prednisone, montelukast, amoxicillin-clavulanate, azelastine, spironolactone, and mupirocin had statistically significant increases in average number of prescriptions per physician, whereas ofloxacin and mometasone had significant decreases. Medications presumably treating Eustachian tube dysfunction, Meniere's disease, and vestibular migraine had the greatest percent changes across years. Cost distribution of four drugs increased upwards of 100%. Geographic analysis demonstrated that Southern and Midwest regions had higher standardized prescription costs.

CONCLUSIONS

This study is the first to analyze neurotologists' trends in prescribing patterns, regional prescription cost distributions, and commonly treated pathologies. This can lead to better standardization of prescribing patterns and cost in the future.

Subsidy Design in Privately Provided Social Insurance: Lessons from Medicare Part D

The efficiency of publicly-subsidized, privately-provisioned social insurance programs depends on the interaction between strategic insurers and the subsidy mechanism. We study this interaction in the context of Medicare's prescription drug coverage program. We find that the observed mechanism is successful in keeping "raise-the-subsidy" incentives relatively low, acts much like a flat voucher, and obtains a level of welfare close to the optimal voucher. Across a range of counterfactuals, we find that more efficient subsidy mechanisms share three features: they retain the marginal elasticity of demand, limit the exercise of market power, and preserve the link between prices and marginal costs.

Drug rebates in Medicare Part D: Excess patient costs in the case of hepatitis C treatments

BACKGROUND

Medicare Part D was implemented as a prescription drug benefit in 2006. Since then, high-cost new therapies have emerged, resulting in large increases in prices for pharmaceutical products, share of government spending from pharmaceutical products, and patient out of pocket costs.

OBJECTIVES

The objectives of this study were to: 1) evaluate the role of pharmacy benefit managers who are intermediaries in the processing and payment of prescription drug plans, and 2) to analyze the formulary selections of Medicare Part D plans in the context of differing wholesale acquisition costs, list prices and potential rebates, while building on prior work on the out of pocket costs associated with rebates.

METHODS

Hepatitis C was used as a case study to compare the list prices, clinical merits, and preferred drug coverage frequency of select pan-genotypic direct acting agent Hepatitis C treatments. The treatments were then put through a hypothetical 2018 Medicare Part D standard cost structure to illustrate differences in out-of-pocket costs to consumers at various list prices among treatments.

RESULTS

Hepatitis C treatments with lower list prices were offered as covered benefit less frequently than high list price treatments, despite being clinically superior and lower out-of-pocket cost.

CONCLUSIONS

Consumers, regulators and policy advocates need to work to limit the impact of financial conflicts of interest and perverse incentives of pharmaceutical rebates in drug selection. This is especially true for high-cost treatments with substantial out-of-pocket cost implications for consumers, which also prevent widespread access, hindering public health goals.

Opioid Prescribing Practices of Neurosurgeons: Analysis of Medicare Part D

OBJECTIVE

The Centers for Disease Control have declared that the United States is amidst a continuing opioid epidemic, with drug overdose-related death tripling between 1999 and 2014. Among the 47,055 overdose-related deaths that occurred in 2014, 28,647 (60.9%) of them involved an opioid.

METHODS

The Part D Prescriber Public Use File, which is based on beneficiaries enrolled in the Medicare Part D prescription drug program, was used to query information on prescription drug events incurred by Medicare beneficiaries with a Part D prescription drug plan from 31 June 2014 to 30 June 2015. Only those providers with the specialty description of neurosurgeon, as reported on the provider's Part B claims, were included in this study.

RESULTS

A total of 271,502 beneficiaries, accounting for 971,581 claims and 22,152,689 day supplies of medication, accounted for the $52,956,428.40 paid by the Centers for Medicare and Medicaid Services for medication that the 4085 neurosurgeons submitted to the Centers for Medicare and Medicaid Services Part D program in the 2014 calendar year. During the same year, 402,767 (41.45%) claims for 158,749 (58.47%) beneficiaries accounted for 6,458,624 (29.16%) of the day supplies of medications and $13,962,630.11 (26.37%) of the total money spent by the Centers for Medicare and Medicaid Services Part D that year. Nationwide, the ratio of opioid claims to total Medicare Part D beneficiaries was 1.48. No statistically significant regional differences were found.

CONCLUSIONS

The opioid misuse epidemic is a complex and national issue with patterns of prescription not significantly different between regions. All neurosurgeons must be cognizant of their prescribing practices so as to best support the resolution of this public health crisis.

Effects of Transitioning to Medicare Part D on Access to Drugs for Medical Conditions among Dual Enrollees with Cancer

OBJECTIVES

To evaluate the impact of transitioning from Medicaid to Medicare Part D drug coverage on the use of noncancer treatments among dual enrollees with cancer.

METHODS

We leveraged a representative 5% national sample of all fee-for-service dual enrollees in the United States (2004-2007) to evaluate the impact of the removal of caps on the number of reimbursable prescriptions per month (drug caps) under Part D on 1) prevalence and 2) average days' supply dispensed for antidepressants, antihypertensives, and lipid-lowering agents overall and by race (white and black).

RESULTS

The removal of drug caps was associated with increased use of lipid-lowering medications (days' supply 3.63; 95% confidence interval [CI] 1.57-5.70). Among blacks in capped states, we observed increased use of lipid-lowering therapy (any use 0.08 percentage points; 95% CI 0.05-0.10; and days' supply 4.01; 95% CI 2.92-5.09) and antidepressants (days' supply 2.20; 95% CI 0.61-3.78) and increasing trends in antihypertensive use (any use 0.01 percentage points; 95% CI 0.004-0.01; and days' supply 1.83; 95% CI 1.25-2.41). The white-black gap in the use of lipid-lowering medications was immediately reduced (-0.09 percentage points; 95% CI -0.15 to -0.04). We also observed a reversal in trends toward widening white-black differences in antihypertensive use (level -0.08 percentage points; 95% CI -0.12 to -0.05; and trend -0.01 percentage points; 95% CI -0.02 to -0.01) and antidepressant use (-0.004 percentage points; 95% CI -0.01 to -0.0004).

CONCLUSIONS

Our findings suggest that the removal of drug caps under Part D had a modest impact on the treatment of hypercholesterolemia overall and may have reduced white-black gaps in the use of lipid-lowering and antidepressant therapies.

Association Between Prescription Drug Insurance and Health Care Utilization Among Medicare Beneficiaries

Medicare Part D was associated with reduced hospitalizations, yet little is known whether these effects varied across patients and how Part D was associated with length of stay and inpatient expenditures. We used Medicare claims and the Medicare Current Beneficiary Survey from 2002 to 2010 and an instrumental variables approach. Gaining drug insurance through Part D was associated with a statistically significant 8.0% reduction in likelihood of admission across conditions examined. Reductions were generally greater for younger, healthier, and male individuals. Across all conditions, mean length of stay decreased by 3.2% from a baseline of 5.1 days. Part D was associated with a 3.5% reduction in expenditures per admission, reflecting a decrease of $844 from a mean charge of $24,124 per admission prior to Part D. Thus, Part D was associated with statistically and clinically significant reductions in the probability of admission and length of stay for several common conditions.

Impact of the change of copay policy in Medicare Part D on zoster vaccine uptake among Medicare beneficiaries in a managed care organization

Background

Kaiser Permanente Southern California (KPSC) adopted the Medicare Part D Tier-6 with zero patient copay for zoster vaccination in 2012. We assessed the impact of the implementation on zoster vaccination rate (GSK study identifier: HO-13-14,182).

Methods

Zoster vaccination rate was examined among an open cohort of ≥65-year-old Medicare Part D beneficiaries during 01/01/2008–06/30/2014, compared to ≥65-year-old commercial health plan members and 60–64-year-old members. The demographics, vaccination records, and insurance and benefit type were confirmed through KPSC electronic medical record databases. Person-time based vaccination rate was calculated for each observation interval (calendar month or year). The changes in annual rates in one year pre- (2011) and post- (2012) Tier-6 implementation were compared in a difference-in-difference analysis. Linear spline Poisson regression models were fitted to compare the secular trend of monthly rates during pre and post Tier-6 implementation (01/2012).

Results

Zoster vaccination rate increased in Medicare Part D beneficiaries after the implementation of zero copay. The increase in annual vaccination rate from 2011 to 2012 was marginally higher in Medicare Part D beneficiaries but not statistically significant (difference in rate ratio [RR] = 0.04, p > 0.05) compared to commercial health plan members. Among non-Hispanic white members, the difference of RR was 0.09 (p = 0.020) between Medicare Part D beneficiaries and ≥65-year-old commercial plan members, and it was 0.08 (p = 0.034) compared to 60–64-year-old commercial plan members. In secular trend analysis, we did not observe significant increase in overall and race stratified zoster vaccination rate attributable to the implementation of the Tier-6.

Conclusions

The impact of Tier-6 on zoster vaccination was not substantial in elderly Medicare Part D beneficiaries in this population where a lower than average copay ($20 to $40) was applied prior to the Tier-6 implementation. Further research is necessary to explore the numerical relationship between vaccination and amount of copay.

Trial registration

GSK study identifier: HO-13-14,182.

Electronic supplementary material

The online version of this article (doi:10.1186/s12913-017-2441-7) contains supplementary material, which is available to authorized users.

Medicare Part D Beneficiaries' Plan Switching Decisions and Information Processing

Medicare Part D beneficiaries tend not to switch plans despite the government's efforts to engage beneficiaries in the plan switching process. Understanding current and alternative plan features is a necessary step to make informed plan switching decisions. This study explored beneficiaries' plan switching using a mixed-methods approach, with a focus on the concept of information processing. We found large variation in beneficiary comprehension of plan information among both switchers and nonswitchers. Knowledge about alternative plans was especially poor, with only about half of switchers and 2 in 10 nonswitchers being well informed about plans other than their current plan. We also found that helpers had a prominent role in plan decision making-nearly twice as many switchers as nonswitchers worked with helpers for their plan selection. Our study suggests that easier access to helpers as well as helpers' extensive involvement in the decision-making process promote informed plan switching decisions.

The Impact of Medicare Part D on Self-Employment

We explore the relationship between access to affordable health insurance and self-employment using exogenous variation from the introduction of Medicare Part D that reduced the out-of-pocket cost of prescription drugs and improved health outcomes in a difference-in-differences model using the American Community Survey. We find that our treatment group of individuals aged 65-69 were 0.5 percentage points (or 5%) more likely to be self-employed in relation to a control group aged 60-64.

The impact of health insurance expansion on physician treatment choice: Medicare Part D and physician prescribing

We test the effect of the introduction of Medicare Part D on physician prescribing behavior by using data on physician visits from the National Ambulatory Medical Care Survey (NAMCS) 2002-2004 and 2006-2009 for patients aged 60-69. We use regression discontinuity designs to estimate the effect of part D around the age of 65 before and after 2006 and then compare the discrete jump in outcomes at age 65 before and after Part D. We find a 32% increase in the number of prescription drugs prescribed or continued per visit and a 46% increase in the number of generic drugs prescribed or continued for the elderly after the introduction of Medicare Part D.

Rural-Urban Differences in Satisfaction with Medicare Part D: Implications for Policy

Rural residents are more likely to be enrolled in traditional fee-for-service Part D Medicare prescription drug plans, and they face particular challenges in accessing pharmaceutical care. This study examines rural/urban differences in satisfaction with Medicare Part D coverage. Using data from the 2012 Medicare Current Beneficiary Survey (N = 3,107 beneficiaries aged 65 and older), we find that rural residents have significantly lower satisfaction with Part D coverage but that regional variation in satisfaction is largely explained by differences in health services use and type of Part D plan (stand-alone versus Medicare Advantage). We conclude by suggesting a multifaceted approach to improving satisfaction with Part D for rural residents.

Insurers' Negotiating Leverage and the External Effects of Medicare Part D

By influencing the size and bargaining power of private insurers, public subsidization of private health insurance may project effects beyond the subsidized population. We test for such spillovers by analyzing how increases in insurer size resulting from the implementation of Medicare Part D affected drug prices negotiated in the non-Medicare commercial market. On average, Part D lowered prices for commercial enrollees by 3.7%. The external commercial market savings amount to $1.5 billion per year, which, if passed to consumers, approximates the internal cost-savings of newly-insured subsidized beneficiaries. If retained by insurers, it corresponds to a 5% average increase in profitability.

Ryan White CARE Act Part D: matches and gaps in political commitment and local implementation

This article demonstrates the opportunities for and challenges of the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act Part D to implementing its mandate for comprehensive family-centered systems of care for women, infants, children, and youth with HIV/AIDS. Part D legislation should promote practices addressing families with models for basic security, judiciously embrace those universal public health policies aiming to improve children's overall welfare, and consistently repudiate those policies infringing on human rights of women infected with HIV, or ignoring their children's basic needs. The proposed revisions to Part D implementation may renew its political commitment to serving the needs of families who are HIV affected.

Identifying newly approved medications in Medicare claims data: a case study using tocilizumab

BACKGROUND

After U.S. licensure, parenterally administered medications are identified using non-specific drug codes. Accurately identifying these medications is critical to safety and effectiveness research. Methods to identify medications prior to assignment of specific drug codes have not been well described.

OBJECTIVES

To describe a generalized approach using non-specific drug codes to identify parenteral therapies in Medicare claims and to assess the ability of that approach to identify tocilizumab (TCZ), a new biologic agent approved in 2010.

METHODS

We used 2008-2010 Medicare data for a cohort of rheumatoid arthritis patients for algorithm development. Our algorithm classified non-specific drug codes based upon: 1) ICD9 codes; 2) unit values (i.e. dose); 3) codes for infusion/injection procedures; 4) expected versus observed total reimbursement amount and reimbursement per unit. We assessed algorithm performance by linking to an arthritis registry to examine external validity.

RESULTS

Of 472 803 claims with non-specific drug codes, 9762 claims satisfied the TCZ algorithm. 74.3% of 9762 claims were classified as TCZ by exact unit price or allowed amount, 4.4% by unique doses, 21.3% by diagnosis code and small deviation from unit price or allowed amount. The algorithm demonstrated good performance characteristics: sensitivity 94% (95% CI 80-99), specificity 100% (99-100) and PPV 97% (84-100).

CONCLUSION

Claims-based algorithms in Medicare or similar data systems can accurately identify newly approved biologics administered parenterally prior to the assignment of specific drug codes.

Applying the 2003 Beers update to elderly Medicare enrollees in the Part D program

BACKGROUND

Inappropriate prescribing of certain medications known as Beers drugs may be harmful to the elderly, because the potential risk for an adverse outcome outweighs the potential benefit.

OBJECTIVES

(1) To assess Beers drug use in dual enrollees compared to non-duals; (2) to explore the association between dual enrollment status and Beers use, controlling for the effects of age, gender, race/ethnicity, census region, and health status; (3) to assess which medication therapeutic category had the highest Beers use.

DESIGN

Cross sectional retrospective review of 2007 Centers for Medicare & Medicaid Service Part D data. Potentially inappropriate medication use was assessed, independent of diagnosis, using the 2003 update by Fick et al.

FINDINGS

The likelihood of Beers drug use among duals approximates that of non-duals (OR 1.023, 95% CI 1.020-1.026). Characteristics associated with the receipt of a Beers medication include Hispanic origin, younger age, female gender, poor health status, and residence outside of the U.S.' Northeast region. Genitourinary products had the highest Beers use within medication therapeutic categories among both dual and non-dual enrollees (21.1% and 19.9%, respectively).

CONCLUSIONS

Part D data can be successfully used to monitor Beers drug use. With adjustments for several important and easily measured demographic, health, and prescription drug use covariates, Beers drug use appears to be as common among non-dual enrollees as it is among dual enrollees in the Part D program. New Part D drug utilization policies that apply to all beneficiaries may need to be enacted to reduce Beers drug use.