Insulin Fills by Medicare Enrollees and Out-of-Pocket Caps Under the Inflation Reduction Act.

This study uses data from IQVIA's National Prescription Audit to assess the association of the Inflation Reduction Act's cap on cost sharing with insulin fills by Medicare beneficiaries.

Effects of Real-time Prescription Benefit Recommendations on Patient Out-of-Pocket Costs: A Cluster Randomized Clinical Trial.

Importance: Rising drug costs contribute to medication nonadherence and adverse health outcomes. Real-time prescription benefit (RTPB) systems present prescribers with patient-specific out-of-pocket cost estimates and recommend lower-cost, clinically appropriate alternatives at the point of prescribing. Objective: To investigate whether RTPB recommendations lead to reduced patient out-of-pocket costs for medications. Design, Setting, and Participants: In this cluster randomized trial, medical practices in a large, urban academic health system were randomly assigned to RTPB recommendations from January 13 to July 31, 2021. Participants were adult patients receiving outpatient prescriptions during the study period. The analysis was limited to prescriptions for which RTPB could recommend an available alternative. Electronic health record data were used to analyze the intervention's effects on prescribing. Data analyses were performed from August 20, 2021, to June 8, 2022. Interventions: When a prescription was initiated in the electronic health record, the RTPB system recommended available lower-cost, clinically appropriate alternatives for a different medication, length of prescription, and/or choice of pharmacy. The prescriber could select either the initiated order or one of the recommended options. Main Outcomes and Measures: Patient out-of-pocket cost for a prescription. Secondary outcomes were whether a mail-order prescription and a 90-day supply were ordered. Results: Of 867 757 outpatient prescriptions at randomized practices, 36 419 (4.2%) met the inclusion criteria of having an available alternative. Out-of-pocket costs were $39.90 for a 30-day supply in the intervention group and $67.80 for a 30-day supply in the control group. The intervention led to an adjusted 11.2%; (95% CI, -15.7% to -6.4%) reduction in out-of-pocket costs. Mail-order pharmacy use was 9.6% and 7.6% in the intervention and control groups, respectively (adjusted 1.9 percentage point increase; 95% CI, 0.9 to 3.0). Rates of 90-day supply were not different. In high-cost drug classes, the intervention reduced out-of-pocket costs by 38.9%; 95% CI, -47.6% to -28.7%. Conclusions and Relevance: This cluster randomized clinical trial showed that RTPB recommendations led to lower patient out-of-pocket costs, with the largest savings occurring for high-cost medications. However, RTPB recommendations were made for only a small percentage of prescriptions. Trial Registration: ClinicalTrials.gov Identifier: NCT04940988; American Economic Association Registry: AEARCTR-0006909.

Navigating the Pharmaceutical Benefits Scheme: federal versus state government funding for high-cost medicines – a problem for public hospitals.

The funding of medication supply in Australian public hospitals is divided between the federal government's Pharmaceutical Benefits Scheme (PBS) and thestate or territory government who pay for the remaining medications not covered under the PBS. For some high-cost medications, such as the monoclonal antibody blinatumomab, the current criteria for PBS funding in public hospitals are challenging. The strict requirement for inpatient admission, due to the risk of potentially serious adverse effects, alongside a lack of PBS reimbursement, while a hospital inpatient, may result in the state bearing the cost. A retrospective review of five patients receiving blinatumomab at our hospital found that, on average, patients remained inpatients for longer than that stipulated to meet PBS funding criteria, predominantly due to adverse effects associated with the medication. This resulted in the state government paying for the medication in full. The upcoming National Medicines Policy review should address the increasing complexity of new medications and their access and funding.

Cost sharing: implications of a well-intended benefits strategy.

DISCLOSURES: The thoughts and opinions expressed in this article are those of the author only and are not the thoughts and opinions of any current or former employer of the author. Nor is this publication made by, on behalf of, or endorsed or approved by any current or former employer of the author.

Characteristics of Copayment Offsets for Prescription Drugs in the United States.

Importance: Despite ongoing debate regarding the high prices that patients pay for prescription drugs, to our knowledge, little is known regarding the use of coupons, vouchers, and other types of copayment "offsets" that reduce patients' out-of-pocket drug spending. Although offsets reduce patients' immediate cost burden, they may encourage the use of higher-cost products and diminish health insurers' ability to optimize pharmaceutical value. Objective: To examine the drugs most commonly covered by offsets, the percentage of out-of-pocket costs covered by offsets, and the characteristics of patients using offsets for retail pharmacy transactions in the United States in 2017 through 2019. Design, Setting, and Participants: A retrospective cohort analysis was conducted of a 5% nationally random sample of anonymized pharmacy claims from IQVIA's Formulary Impact Analyzer, which captures more than 60% of all US pharmacy transactions. This analysis focused on 631 249 individuals who used at least 1 offset between October 1, 2017, and September 30, 2019. Main Outcomes and Measures: Offset source, types of drugs covered by offsets, offset dollar value and percentage of out-of-pocket payment covered, and county characteristics of offset recipients. Results: The 631 249 individuals in the study (361 855 female participants [57.3%]; mean [SD] age, 45.7 [18.6] years) had approximately 33 million prescription fills, of which 12.8% had an offset used. Of these, 50.2% originated from a pharmaceutical manufacturer, 47.2% originated from a pharmacy or pharmacy benefit manager (PBM), and 2.6% originated from a state assistance program. A total of 80.0% of manufacturer-sponsored offsets were concentrated among 6.2% of unique products, and 79.9% of pharmacy-PBM offsets were concentrated among 4.9% of unique products. Most manufacturer offsets (88.2%) were for branded products, while most pharmacy-PBM offsets were for generic products (90.5%). The median manufacturer offset was $51.00, covering 87.1% of out-of-pocket costs; the median pharmacy-PBM offset was $16.30, covering 39.3% of out-of-pocket costs. There was no meaningful association between offset magnitude and county-level income, health insurance coverage, or race/ethnicity. Conclusions and Relevance: In this analysis of patient-level pharmacy claims from 2017 to 2019, approximately half of all offsets involved pharmacy-PBM contractual arrangements, and half were offered by manufacturers. All offsets were associated with a significant reduction in patients' out-of-pocket costs, were highly concentrated among a few drugs, and were generally not more generous among individuals in counties with lower income or larger Black or uninsured populations.

Price Is Right: Exploring Prescription Drug Coverage Barriers for Irritable Bowel Syndrome Using Threshold Pricing Analysis.

BACKGROUND: Prescription drug costs exert profound effects on commercial insurance coverage and access to effective therapy. AIMS: We aimed to assess threshold pricing to achieve budget neutrality of FDA-approved drugs treating irritable bowel syndrome from an insurance perspective, based on cost-savings resulting in decreased healthcare utilization through effective disease management. METHODS: We constructed a decision-analytic model from an insurance perspective to assess the budget impact of IBS prescription drugs under usual insurance coverage levels in practice: (1) unrestricted drug access or (2) step therapy in a primary care population of middle-age, care-seeking IBS patients. Budget-neutral drug prices were then calculated which resulted in $0 budget impact to insurers with a short-term, one-year time horizon. RESULTS: If used according to FDA labeling, IBS-D drugs cost between $4778 and $16,844 per year and IBS-C drugs cost between $4319 and $4955 per year. These drug costs often exceed insurance expenditures of $6999 for IBS-D and $3929 for IBS-C if left untreated. Therefore, for drugs to have $0 budget impact to insurers, their prices would need to be discounted 36.7-74.2% for IBS-D drugs and 59.3-82.5% for IBS-C. IBS drugs are already priced to support step therapy "failing one of several common, inexpensive IBS treatments with a responder rate > 30-40%," reflecting the subpopulation with more severe disease and greater healthcare costs. CONCLUSIONS: Broader prescription drug coverage for patients failing common, inexpensive IBS treatments to which at least 30-40% of patients would typically respond appears warranted to enable gastroenterologists to offer personalized approaches targeting specific mechanisms of this heterogeneous disease.

Are ACOs Ready to be Accountable for Medication Use?

BACKGROUND: Accountable care organizations (ACOs) have the potential to lower costs and improve quality through incentives and coordinated care. However, the design brings with it many new challenges. One such challenge is the optimal use of pharmaceuticals. Most ACOs have not yet focused on this integral facet of care, even though medications are a critical component to achieving the lower costs and improved quality that are anticipated with this new model. OBJECTIVE: To evaluate whether ACOs are prepared to maximize the value of medications for achieving quality benchmarks and cost offsets. METHODS: During the fall of 2012, an electronic readiness self-assessment was developed using a portion of the questions and question methodology from the National Survey of Accountable Care Organizations, along with original questions developed by the authors. The assessment was tested and subsequently revised based on feedback from pilot testing with 5 ACO representatives. The revised assessment was distributed via e-mail to a convenience sample (n=175) of ACO members of the American Medical Group Association, Brookings-Dartmouth ACO Learning Network, and Premier Healthcare Alliance. RESULTS: The self-assessment was completed by 46 ACO representatives (26% response rate). ACOs reported high readiness to manage medications in a few areas, such as transmitting prescriptions electronically (70%), being able to integrate medical and pharmacy data into a single database (54%), and having a formulary in place that encourages generic use when appropriate (50%). However, many areas have substantial room for improvement with few ACOs reporting high readiness. Some notable areas include being able to quantify the cost offsets and hence demonstrate the value of appropriate medication use (7%), notifying a physician when a prescription has been filled (9%), having protocols in place to avoid medication duplication and polypharmacy (17%), and having quality metrics in place for a broad diversity of conditions (22%). CONCLUSIONS: Developing the capabilities to support, monitor, and ensure appropriate medication use will be critical to achieve optimal patient outcomes and ACO success. The ACOs surveyed have embarked upon an important journey towards this goal, but critical gaps remain before they can become fully accountable. While many of these organizations have begun adopting health information technologies that allow them to maximize the value of medications for achieving quality outcomes and cost offsets, a significant lag was identified in their inability to use these technologies to their full capacities. In order to provide further guidance, the authors have begun documenting case studies for public release that would provide ACOs with examples of how certain medication issues have been addressed by ACOs or relevant organizations. The authors hope that these case studies will help ACOs optimize the value of pharmaceuticals and achieve the "triple aim" of improving care, health, and cost. DISCLOSURES: There was no outside funding for this study, and the authors report no conflicts of interest related to the article. Concept and design were primarily from Dubois and Kotzbauer, with help from Feldman, Penso, and Westrich. Data collection was done by Feldman, Penso, Pope, and Westrich, and all authors participated in data interpretation. The manuscript was written primarily by Westrich, with help from all other authors, and revision was done primarily by Lustig and Westrich, with help from all other authors.

Integrating E-Prescribing and Pharmacy Claims Data for Predictive Modeling: Comparing Costs and Utilization of Health Plan Members Who Fill Their Initial Medications with Those Who Do Not.

BACKGROUND: Nonfilling of prescribed medications is a worldwide problem of serious concern. Studies of health care costs and utilization associated with medication nonadherence frequently rely on claims data and usually focus on patients with specific conditions. Past studies also have little agreement on whether higher medication costs associated with higher adherence can reduce downstream health care consumption. OBJECTIVES: To (a) compare the characteristics between people with and without complete medication initiations from a general population and (b) quantify the effect of medication initiation on health care utilization and expenditures with propensity score weighting. METHODS: We conducted a retrospective cohort study using 2012 and 2013 electronic health records (EHR) and insurance claims data from an integrated health care delivery network. We included 43,097 eligible primary care patients in the study. Annual medication fill rates of initial prescriptions in 2012 were defined as the number of filled prescriptions from claims divided by the number of e-prescriptions from EHRs, while excluding all refills. A claim was considered filled if (a) EHR and claims records were from the same drug class; (b) claims occurred between the date of a current EHR order and that of the next EHR order of the same class; and (c) the maximum fill rate was 100%. The 6 annual outcomes included total costs, medical costs, pharmacy costs, being a high-cost "outlier" (in top 5%), having 1 or more hospitalizations, and having 1 or more emergency department (ED) visits. Individuals were classified as either having completed all medication initiations (100% annual filling rate for initiations) or not. We used propensity score weighting to control for baseline differences between complete and incomplete initial fillers. We adopted linear and logistic regressions to model costs and binary utilization indicators for the same year (concurrently) and next year (prospectively). RESULTS: Approximately 42% of the study sample had complete medication initiations (100% filling rate), while the remaining 58% had incomplete initiations. Individuals who fully filled initial prescriptions had lower comorbidity burden and consumed fewer health care resources. After applying propensity score weighting and controlling for variables such as the number of prescription orders, patients with complete medication initiations had lower overall and medical costs, concurrently and prospectively (e.g., $751 and $252 less for annual total costs). Complete medication initiation fillers were also less likely to have concurrent health care utilization (OR = 0.78, 95% CI = 0.68-0.90 for hospitalization; OR = 0.77, 95% CI = 0.72-0.82 for ED admissions) but no difference in prospective utilization other than for ED visits (OR = 0.93, 95% CI = 0.87-0.99). CONCLUSIONS: Identifying the subpopulation of patients with incomplete medication initiations (i.e., filling less than 100% of initial prescriptions) is a pragmatic approach for population health management programs to align resources and potentially contain cost and utilization. DISCLOSURES: No outside funding supported this study. This study applied the Adjusted Clinical Group (ACG) case-mix/risk adjustment methodology, developed at Johns Hopkins Bloomberg School of Public Health. Although ACGs are an important aspect of this study, the goal of the study was not to directly assess or evaluate the methodology. The Johns Hopkins University receives royalties for nonacademic use of software based on the ACG methodology. Chang, Kharrazi, and Weiner receive a portion of their salary support from this revenue. Chang is also a part-time consultant for Monument Analytics, a health care consultancy whose clients include the life sciences industry, as well as plaintiffs in opioid litigation. Alexander is past Chair of FDA's Peripheral and Central Nervous System Advisory Committee; has served as a paid advisor to IQVIA; is a co-founding Principal and equity holder in Monument Analytics; and is a member of OptumRx's National P&T Committee. These arrangements have been reviewed and approved by Johns Hopkins University in accordance with its conflict of interest policies. The other authors have nothing to disclose.

Effect of Carving in Pharmacy Benefits on Utilization and Costs.

BACKGROUND: Rising medical costs are a significant concern for employers offering health benefits to employees, and there is interest in identifying insurance plan designs that optimize the effect of pharmacy benefits on overall costs. For instance, employers must decide between plans that carve in pharmacy benefits (where medical and pharmacy benefits are integrated into 1 package through an insurer) versus plans that carve out pharmacy benefits (where pharmacy benefits are separately administered through a pharmacy benefit manager). Little is known about the effect of carving in pharmacy benefits on medical utilization and costs. OBJECTIVE: To compare the effect of carving in versus carving out pharmacy benefits on medical utilization, medical costs, and health management program participation in commercial health plans. METHODS: We performed a propensity score-matched analysis comparing carve-in and carve-out members of a regional health plan in 2018. Our primary outcomes were medical utilization (annual medical claims/1,000 members) and costs (medical costs per member per month [PMPM]). We categorized these into the following domains: inpatient, emergency department, outpatient/ambulatory surgery, urgent care, primary care, specialist services, and diagnostics (laboratory testing/imaging). We additionally assessed participation in health plan-based health management programs. RESULTS: We analyzed 9,633 carve-in members matched with 9,633 carve-out members. Compared with carving out pharmacy benefits, carving in was associated with 3.7% lower medical costs, with an $8.73 reduction in PMPM ($225.87 vs. $234.60), and no significant difference in medical utilization; significantly lower inpatient and urgent care claims (reduction of 9.29 claims/1,000 and 51.3 claims/1,000, respectively) and costs ($10.08 and $0.12 PMPM reduction, respectively); lower injectable medical therapy costs ($4.32 PMPM reduction); and higher durable medical equipment costs ($2.14 PMPM increase). Carve-in members also experienced 4.9% higher health management program participation. CONCLUSIONS: As employers attempt to understand the value of carving in versus carving out pharmacy benefits to health plans, our findings suggest that carving in pharmacy benefits is associated with reduced medical costs and hospitalizations. Our findings can assist in informing employer decision-making processes and, as a result, reducing costs of care. DISCLOSURES: No outside funding supported this study. Parekh was and Huang and Good are employed by the UPMC Centers for High-Value Health Care and Value-Based Pharmacy Initiatives. Manolis is employed by the UPMC Health Plan within the UPMC Insurance Services Division. Papa, Drnach, and Spiegel are employed by WorkPartners within the UPMC Insurance Services Division.

Changes in PBM Business Practices in 2019: True Innovation or More of the Same?

In 2019, pharmacy benefit managers (PBMs) responded to intense public criticism with business model changes described as movements toward full transparency and innovation to reduce costs for benefit plan sponsors. We critically analyze these changes in light of key challenges in specialty drug management: pharmaceutical manufacturer practices (price increases driven by coverage mandates and lack of price control, intensive and sometimes misleading advertising, patent extensions), FDA changes (increased reliance on manufacturer funding, weakened evidentiary base for drug approvals), and provider prescribing patterns (lag from evidence to routine practice, manufacturer influences on the knowledge base, direct manufacturer payments to frequent prescribers). The persistence of controversial PBM practices suggests that business model changes were mostly cosmetic, without altering key marketplace dysfunctions. Examples include "spread" pricing, in which PBMs pay pharmacies less than employer-paid amounts; rebate-influenced formulary development; and shifting of prescription volume to PBM-owned pharmacies. Spread in Medicaid was estimated at $224.8 million in Ohio and $123.5 million in Kentucky in 1-year periods and is the subject of an ongoing federal investigation. Rebate influence on formulary development is suggested by slow biosimilar adoption and a study documenting little association between brand exclusions and clinical or cost-effectiveness. Even in 100% passthrough arrangements, the price differential between rebated products and lower-cost alternatives may far exceed revenues returned to the payer. Shifting of business to PBM-owned pharmacies was identified in Florida managed Medicaid in 2018, where the state's 5 largest specialty pharmacies, all owned by managed care organizations or PBMs, collected 28% of prescription drug profit despite dispensing only 0.4% of claims. Finally, contract provisions and terms typically limit the ability of plan sponsors to monitor PBM performance. These include "offsetting," changes in definitions (e.g., "single-source generic") during the contract term, restrictions on audit rights, and exclusion of some pharmaceutical manufacturer revenues from "100%" passthroughs. We conclude that ostensibly positive changes in PBM practices have been offset by undisclosed business arrangements, shifts to alternative revenue sources, and opaque contractual terms. Establishing and maintaining a sustainable benefit will require fundamental alterations to this dysfunctional market DISCLOSURES: This work was funded solely by Archimedes, with no external funding. Motheral is the CEO of Archimedes, a specialty drug management company, and EpiphanyRx, a PBM that provides alternatives to the business models described in this article. Fairman is a consultant to Archimedes.

AMCP Partnership Forum: What's Next for Specialty Medication Benefit Design and Reimbursement.

Rising specialty drug costs present a challenge for patients and payers. High-cost products, such as gene therapies or immunotherapies, can significantly affect the budget of a payer that does not have the ability to spread risk across a large population. Stakeholders are considering new reimbursement and benefit designs for specialty medications to improve efficiencies and better manage costs. The potential effect of changes to specialty medication benefit designs and reimbursement systems on patient care, access to medications, and the overall health care system are important considerations when assessing the benefits and challenges associated with reform proposals. Options to better manage the affordability of specialty medications are needed to ensure that patients can continue to access medications, while allowing payers to remain good stewards of health care dollars and supporting marketplace competition and incentives to stimulate innovation. New benefit designs that address these needs, while also supporting marketplace competition and providing incentives that stimulate innovation, have been considered. To explore options, AMCP convened a multidisciplinary stakeholder forum on December 10-11, 2019, in Alexandria, VA. Health care leaders representing academia, health plans, integrated delivery systems, industry leaders, pharmaceutical manufacturers, pharmacy benefit managers, employers, federal government agencies, national health care provider organizations, and patient advocacy organizations participated in the forum. The forum was designed for stakeholders to discuss strategies for the following: (a) reduce costs for beneficiaries while maintaining or improving access to prescription drugs; (b) support marketplace competition and incentives for biopharmaceutical innovation; (c) minimize physicians' financial risk associated with managing drug inventories; (d) remove adverse reimbursement incentives for prescribing higher priced drugs; (e) consider the cost-effectiveness of treatments and services across the health care continuum; and (f) support quality measurement and program evaluation metrics. Recommendations emerging from the forum included creation of novel payment models for the most expensive therapies that allow for larger risk pools, while maintaining the sustainability of the reinsurance market remains. Simplification and standardization were cited as goals for system reform and technological innovations that allow health care providers to view cost-effectiveness information at the point of prescribing, combined with value-based contracting were also recommended. Finally, ensuring that plans remain patient-centric and are designed to address patient needs holistically was stressed as an important goal. DISCLOSURES: This partnership forum was sponsored by Amgen, AstraZeneca, Bayer, GSK, Merck, Pfizer, PhRMA, Takeda, and Xcenda. These proceedings were prepared as a summary of the forum to represent common themes; they are not necessarily endorsed by all attendees nor should they be construed as reflecting group consensus.

Patient and Plan Spending after State Specialty-Drug Out-of-Pocket Spending Caps.

BACKGROUND: Specialty drugs are used to treat complex or life-threatening conditions, often at high financial costs to both patients and health plans. Three states - Delaware, Louisiana, and Maryland - passed legislation to cap out-of-pocket payments for specialty drugs at $150 per prescription. A concern is that these caps could shift costs to health plans, increasing insurance premiums. Estimates of the effect of the caps on patient and health-plan spending could inform future policies. METHODS: We analyzed a sample that included 27,161 persons under 65 years of age who had rheumatoid arthritis, multiple sclerosis, hepatitis C, psoriasis, psoriatic arthritis, Crohn's disease, or ulcerative colitis and who were in commercial health plans from 2011 through 2016 that were administered by three large nationwide insurers. The primary outcome was the change in out-of-pocket spending among specialty-drug users who were in the 95th percentile for spending on specialty drugs. Other outcomes were changes in mean out-of-pocket and health-plan spending for specialty drugs, nonspecialty drugs, and nondrug health care and utilization of specialty drugs. We compared outcomes in the three states that enacted caps with neighboring control states that did not, 3 years before and up to 3 years after enactment of the spending cap. RESULTS: Caps were associated with an adjusted change in out-of-pocket costs of -$351 (95% confidence interval, -554 to -148) per specialty-drug user per month, representing a 32% reduction in spending, among users in the 95th percentile of spending on specialty drugs. This finding was supported by multiple sensitivity analyses. Caps were not associated with changes in other outcomes. CONCLUSIONS: Caps for spending on specialty drugs were associated with substantial reductions in spending on specialty drugs among patients with the highest out-of-pocket costs, without detectable increases in health-plan spending, a proxy for future insurance premiums. (Funded by the Robert Wood Johnson Foundation Health Data for Action Program.).