Safety vs price in the generic drug market: metformin.

OBJECTIVES: Generic medications represent 90% of prescriptions in the US market and provide a tremendous financial benefit for patients. Recently, multiple generic drugs have been recalled due to the presence of carcinogens, predominantly N-nitrosodimethylamine (NDMA), including an extensive recall of extended-release (ER) metformin products in 2020. STUDY DESIGN: Primary pharmaceutical quality testing and database analysis. METHODS: We tested marketed metformin immediate-release (IR) and ER tablets from a wide sample of generic manufacturers for the presence of carcinogenic impurities NDMA and N,N-dimethylformamide (DMF). We examined the association of level of impurity with drug price and the impact of the 2020 FDA recalls on unit price and prescription fill rate. RESULTS: Postrecall NDMA levels were significantly lower in metformin ER samples (standardized mean difference = -2.0; P = .01); however, we found continued presence of carcinogens above the FDA threshold in 2 of 30 IR samples (6.67%). Overall, the presence of contaminant levels was not significantly associated with price for either IR (NDMA: R2 = 0.142; P = .981; DMF: R2 = 0.382; P = .436) or ER (NDMA: R2 = 0.124; P = .142; DMF: R2 = 0.199; P = .073) samples. Despite recalls, metformin ER prescription fills increased by 8.9% while unit price decreased by 19.61% (P < .05). CONCLUSIONS: Recalls of metformin ER medications were effective in lowering NDMA levels below the FDA threshold; however, some samples of generic metformin still contained carcinogens even after FDA-announced recalls. The absence of any correlation with price indicates that potentially safer products are available on the market for the same price as poorer-quality products.

AI Alone Will Not Reduce the Administrative Burden of Health Care.

This Viewpoint considers AI's limits in solving the medical billing quagmire and argues that standardizing health insurance claim forms and simplifying billing must occur before AI can shoulder the load.

Time From Authorization by the US Food and Drug Administration to Medicare Coverage for Novel Technologies.

Importance: A wide variety of novel medical diagnostics and devices are determined safe and effective by the US Food and Drug Administration (FDA) each year, but to our knowledge the literature lacks evidence documenting how long it takes to establish new Medicare coverage for these technologies. Objective: To measure time from FDA authorization to at least nominal Medicare coverage for technologies requiring a new reimbursement pathway. Design, Setting, and Participants: In this cross-sectional study, public databases were used to associate each technology to billing codes, determine the effective date of each code and Medicare coverage decisions, and stratify by the maturity of the Medicare coverage. At least nominal coverage was defined as achievement of explicit coverage milestones through a national coverage determination, local coverage determinations by Medicare administrative contractors, or by implicit coverage aligned to a new billing code. Characterization by product type (acute treatment, chronic or ongoing treatment, diagnostic assay, and diagnostic device), manufacturer size, and evidence level were assessed for association with coverage achievement. The study included new product applications authorized by the FDA through the premarket approval pathway, the de novo pathway, or with breakthrough designation in the 510(k) pathway from January 1, 2016, to December 31, 2019. Data analysis took place between May 1, 2022, and December 31, 2022. Main Outcome Measurement: Time from FDA authorization to the first coverage milestone. Results: Among 281 identified technologies in the total sample, 64 (23%) were deemed novel technologies based on the absence of coverage determinations and/or the use of temporary or miscellaneous billing codes. Twenty-eight of 64 technologies (44%) successfully achieved explicit or implicit coverage following FDA authorization. The median time to at least nominal coverage for the analysis cohort was 5.7 years (90% CI, 4.4-NA years). Analysis of time-to-coverage data highlighted company size (log-rank P<.001) and product type (log-rank P = .01) as significant covariates associated with coverage achievement. No association was observed for technologies with level 1 evidence at FDA authorization and subsequent coverage milestone achievement (log-rank P = .40). Conclusions and Relevance: In this cross-sectional study of 64 novel technologies, only 28 (44%) achieved coverage milestones over the study timeline. The several-year period observed to establish at least nominal coverage suggests existing coverage processes may affect timely reimbursement of new technologies.

Engaging Medicare Beneficiaries in Coverage Choices.

This Viewpoint discusses the recently announced monthly Medicare Part B premium hike and the limited role beneficiaries play in decisions about their coverage, and proposes ways to engage Medicare beneficiaries in program decisions.

A data-driven quality-score system for rating drug products and its implications for the health care industry.

The quality of drug products in the United States has been a matter of growing concern. Buyers and payers of pharmaceuticals have limited insight into measures of drug-product quality. Therefore, a quality-score system driven by data collection is proposed to differentiate between the qualities of drug products produced by different manufacturers. The quality scores derived using this proposed system would be based upon public regulatory data and independently-derived chemical data. A workflow for integrating the system into procurement decisions within health care organizations is also suggested. The implementation of such a quality-score system would benefit health care organizations by including the consideration of the quality of products while also considering price as a part of the drug procurement process. Such a system would also benefit the U.S. health care industry by bringing accountability and transparency into the drug supply chain and incentivizing manufacturers to place an increased emphasis on the quality and safety of their drug products.

Billing And Insurance-Related Administrative Costs: A Cross-National Analysis.

Billing and insurance-related costs are a significant source of wasteful health care spending in Organization for Economic Cooperation and Development nations, but these administrative burdens vary across national systems. We executed a microlevel accounting of these costs in different national settings at six provider locations in five nations (Australia, Canada, Germany, the Netherlands, and Singapore) that supplements our prior study measuring the costs in the US. We found that billing and insurance-related costs for inpatient bills range from a low of $6 in Canada to a high of $215 in the US for an inpatient surgical bill (purchasing power parity adjusted). We created a taxonomy of billing and insurance-related activities (eligibility, coding, submission, and rework) that was applied to data from the six sites and allows cross-national comparisons. Higher costs in the US and Australia are attributed to high coding costs. Much of the savings achieved in some nations is attributable to assigning tasks to people in lower-skill job categories, although most of the savings are due to more efficient billing and insurance-related processes. Some nations also reduce these costs by offering financial counseling to patients before treatment. Our microlevel approach can identify specific cost drivers and reveal national billing features that reduce coding costs. It illustrates a valuable pathway for future research in understanding and mitigating administrative costs in health care.

Trends and determinants of retail prescription drug costs.

OBJECTIVE: To characterize price trends and variation for US generic and branded drugs at the retail level as they relate to pharmacy acquisition costs and local market factors. DATA SOURCES: Drug pricing data consisting of US pharmacy claims from 2014 to 2019 collected and licensed by GoodRx, an online tool for comparing drug prices. STUDY DESIGN: Time trends of median drug prices and coefficients of variation were measured for generic and branded drugs, including subgroups based on clinical condition (i.e., diabetes and cancer). Pharmacy competition was measured using the Herfindahl-Hirschman Index (HHI) at the zip-code level. Multivariable linear regression analysis assessed the impact of local market-level factors on drug prices and variation. DATA COLLECTION: US drug pricing data consisting of claims filled through a mix of public and private insurance at 58,332 chain and independent pharmacies across 14,421 zip codes in all 50 states. PRINCIPAL FINDINGS: From 2014 to 2019, pharmacy retail markets trended towards greater competition: average HHI by zip code decreased by 15.0% (p < 0.001). Median cash price increased significantly for both generic (6.58%, p < 0.001) and branded (84.10%, p < 0.001) drugs. When normalized to acquisition costs, cash prices for generic drugs rose 22.03% (p < 0.001) while those of branded drugs decreased by 2.31% (p < 0.001). Diabetes drugs showed higher baseline overall markup of cash prices relative to acquisition costs (10.54, Interquartile range (IQR) 3.28-18.43) than cancer drugs (1.88, IQR 1.36-3.08). Neither local pharmacy competition nor median income significantly predicted drug price or variation. CONCLUSION: Measures of generic drug price and price variation are high despite decreased costs earlier in the pharmaceutical supply chain, defying expectations of what would happen in a competitive market. Efforts to bypass the pharmacy benefit model for generic drugs may offer consumers an opportunity for substantial savings.

New Medicare Technology Add-On Payment Could Be Used As A Market Support Mechanism To Accelerate Antibiotic Innovation.

Despite growing antibiotic resistance, the clinical drug development pipeline for antibiotics has been sparse largely because of an unsustainable business model. We illustrate three models to accelerate antibiotic development, using Medicare new technology add-on payments as a market support mechanism. The first two models subsidize drug development for Medicare beneficiaries, and the third model applies a payment for every patient with a resistant infection to essentially create a funding pool. We found that the reimbursement required to sustain research and development would range from $637 to $121,365, depending on the payment model and the incidence of the resistant infection in question. With a $300 million public research subsidy, the payment for an antibiotic would drop to between $273 and $10,396 per course. Our market support model could increase the likelihood of attracting private investment for antibiotic development.

Reducing administrative costs in US health care: Assessing single payer and its alternatives.

OBJECTIVE: Excess administrative costs in the US health care system are routinely referenced as a justification for comprehensive reform. While there is agreement that these costs are too high, there is little understanding of what generates administrative costs and what policy options might mitigate them. DATA SOURCES: Literature review and national utilization and expenditure data. STUDY DESIGN: We developed a simulation model of physician billing and insurance-related (BIR) costs to estimate how certain policy reforms would generate savings. Our model is based on structural elements of the payment process in the United States and considers each provider's number of health plan contracts, the number of features in each health plan, the clinical and nonclinical processes required to submit a bill for payment, and the compliance costs associated with medical billing. DATA EXTRACTION: For several types of visits, we estimated fixed and variable costs of the billing process. We used the model to estimate the BIR costs at a national level under a variety of policy scenarios, including variations of a single payer "Medicare-for-All" model that extends fee-for-service Medicare to the entire population and policy efforts to reduce administrative costs in a multi-payer model. We conducted sensitivity analyses of a wide variety of model parameters. PRINCIPAL FINDINGS: Our model estimates that national BIR costs are reduced between 33% and 53% in Medicare-for-All style single-payer models and between 27% and 63% in various multi-payer models. Under a wide range of assumptions and sensitivity analyses, standardizing contracts generates larger savings with less variance than savings from single-payer strategies. CONCLUSION: Although moving toward a single-payer system will reduce BIR costs, certain reforms to payer-provider contracts could generate at least as many administrative cost savings without radically reforming the entire health system. BIR costs can be meaningfully reduced without abandoning a multi-payer system.

Assessment of Electronic Health Record Use Between US and Non-US Health Systems.

Importance: Understanding how the electronic health record (EHR) system changes clinician work, productivity, and well-being is critical. Little is known regarding global variation in patterns of use. Objective: To provide insights into which EHR activities clinicians spend their time doing, the EHR tools they use, the system messages they receive, and the amount of time they spend using the EHR after hours. Design, Setting, and Participants: This cross-sectional study analyzed the deidentified metadata of ambulatory care health systems in the US, Canada, Northern Europe, Western Europe, the Middle East, and Oceania from January 1, 2019, to August 31, 2019. All of these organizations used the EHR software from Epic Systems and represented most of Epic Systems's ambulatory customer base. The sample included all clinicians with scheduled patient appointments, such as physicians and advanced practice practitioners. Exposures: Clinician EHR use was tracked by deidentified and aggregated metadata across a variety of clinical activities. Main Outcomes and Measures: Descriptive statistics for clinician EHR use included time spent on clinical activities, note documentation (as measured by the percentage of characters in the note generated by automated or manual data entry source), messages received, and time spent after hours. Results: A total of 371 health systems were included in the sample, of which 348 (93.8%) were located in the US and 23 (6.2%) were located in other countries. US clinicians spent more time per day actively using the EHR compared with non-US clinicians (mean time, 90.2 minutes vs 59.1 minutes; P < .001). In addition, US clinicians vs non-US clinicians spent significantly more time performing 4 clinical activities: notes (40.7 minutes vs 30.7 minutes; P < .001), orders (19.5 minutes vs 8.75 minutes; P < .001), in-basket messages (12.5 minutes vs 4.80 minutes; P < .001), and clinical review (17.6 minutes vs 14.8 minutes; P = .01). Clinicians in the US composed more automated note text than their non-US counterparts (77.5% vs 60.8% of note text; P < .001) and received statistically significantly more messages per day (33.8 vs 12.8; P < .001). Furthermore, US clinicians used the EHR for a longer time after hours, logging in 26.5 minutes per day vs 19.5 minutes per day for non-US clinicians (P = .01). The median US clinician spent as much time actively using the EHR per day (90.1 minutes) as a non-US clinician in the 99th percentile of active EHR use time per day (90.7 minutes) in the sample. These results persisted after controlling for organizational characteristics, including structure, type, size, and daily patient volume. Conclusions and Relevance: This study found that US clinicians compared with their non-US counterparts spent substantially more time actively using the EHR for a wide range of clinical activities or tasks. This finding suggests that US clinicians have a greater EHR burden that may be associated with nontechnical factors, which policy makers and health system leaders should consider when addressing clinician wellness.

Benchmarking the Cost-Effectiveness of Interventions Delaying Diabetes: A Simulation Study Based on NAVIGATOR Data.

OBJECTIVE: To estimate using the UK Prospective Diabetes Study Outcomes Model Version 2 (UKPDS-OM2) the impact of delaying type 2 diabetes onset on costs and quality-adjusted life expectancy using trial participants who developed diabetes in the NAVIGATOR (Nateglinide And Valsartan in Impaired Glucose Tolerance Outcomes Research) study. RESEARCH DESIGN AND METHODS: We simulated the impact of delaying diabetes onset by 1-9 years, utilizing data from the 3,058 of 9,306 NAVIGATOR trial participants who developed type 2 diabetes. Costs and utility weights associated with diabetes and diabetes-related complications were obtained for the U.S. and U.K. settings, with costs expressed in 2017 values. We estimated discounted lifetime costs and quality-adjusted life years (QALYs) with 95% CIs. RESULTS: Gains in QALYs increased from 0.02 (U.S. setting, 95% CI 0.01, 0.03) to 0.15 (U.S. setting, 95% CI 0.10, 0.21) as the imposed time to diabetes onset was increased from 1 to 9 years, respectively. Savings in complication costs increased from $1,388 (95% CI $1,092, $1,669) for a 1-year delay to $8,437 (95% CI $6,611, $10,197) for a delay of 9 years. Interventions costing up to $567-$2,680 and £201-£947 per year would be cost-effective at $100,000 per QALY and £20,000 per QALY thresholds in the U.S. and U.K., respectively, as the modeled delay in diabetes onset was increased from 1 to 9 years. CONCLUSIONS: Simulating a hypothetical diabetes-delaying intervention provides guidance concerning the maximum cost and minimum delay in diabetes onset needed to be cost-effective. These results can inform the ongoing debate about diabetes prevention strategies and the design of future intervention studies.

Workforce Cost Model for Expanding Congenital and Rheumatic Heart Disease Services in Kenya.

BACKGROUND: Cardiovascular disease is the number one global killer, with over three quarters of these deaths arising from the populations of low- and middle-income countries (LMICs). Addressing the burden of cardiovascular disease in LMICs must include medical and surgical services for these patients. In this article, we model the needs and costs to scale up the cardiac provider workforce in Kenya, which can be adapted to other LMICs based on country-specific workforce hours and workforce salaries. METHODS: Using published epidemiological reports from sub-Saharan Africa, we structured the model based on the expected disease burden of congenital and rheumatic disease in a simulated 1,000-person population. Services modeled include clinic visits, echocardiograms, diagnostic cardiac catheterizations, interventional catheterizations, and heart surgery. Costs were modeled based on Kenyan public sector salaries. After scaling the model, we created a sensitivity analysis of change in service duration and salaries. RESULTS: Based on a 1,000-person Kenyan population, we estimate that 2.5 heart surgeries will be needed every year, with a corresponding annual workforce cost of US$526. Including accompanying services of clinic visits, echocardiograms, and both diagnostic and interventional cardiac catheterizations, the total annual workforce cost is US$899. Based on estimated productive hours for public sector workforce, 196 full-time equivalent cardiac surgeons will be needed for the entire population of Kenya (2017 figure). CONCLUSIONS: We present a model for appropriate cardiovascular service staffing based on disease burden and workforce costs. This model can be scaled up as needed to plan for local capacity building.

The relationship between pharmacy benefit managers (PBMs) and the cost of therapies in the US pharmaceutical market: A policy primer for clinicians.

Pharmaceutical benefit managers (PBMs) are playing an increasingly important role in establishing access to pharmaceutical products for patients. PBMs set retail prices for pharmaceutical products, negotiate "rebates" from manufacturers based on total sales volume of products, and achieve several types of postsale price concessions and payments from pharmacies. All of these activities describe a complex flow of funds that has not been transparent to clinicians or to patients. In this article, we describe these terms and processes to better understand how pharmaceutical products are financed in the United States. In 2016, US pharmaceutical manufacturers reported gross pharmaceutical sales of $462 billion and net pharmaceutical sales of $318 billion. The difference between gross and net sales is largely due to the different "payments" from manufacturers to PBMs and other intermediaries in the marketplace. We examine the flow of funds through the US pharmaceutical distribution system over time using data from the annual reports of 13 major pharmaceutical manufacturers for the period 2011-2016. Overall, we find that net revenues for our sample of firms grew by an average of 2.7% annually between 2011 and 2016, whereas rebates and other payments increased by 15% annually over the same period. Our examination of the pharmaceutical market reveals the enormous scale of payments from pharmaceutical manufacturers to intermediaries. We observed that these payments have been growing disproportionally to manufacturer net income over the past 5 years. We also found a lack of transparency regarding the flow of funds through intermediaries. This entire marketplace is now the subject of intense public debate.

Administrative Costs Associated With Physician Billing and Insurance-Related Activities at an Academic Health Care System.

Importance: Administrative costs in the US health care system are an important component of total health care spending, and a substantial proportion of these costs are attributable to billing and insurance-related activities. Objective: To examine and estimate the administrative costs associated with physician billing activities in a large academic health care system with a certified electronic health record system. Design, Setting, and Participants: This study used time-driven activity-based costing. Interviews were conducted with 27 health system administrators and 34 physicians in 2016 and 2017 to construct a process map charting the path of an insurance claim through the revenue cycle management process. These data were used to calculate the cost for each major billing and insurance-related activity and were aggregated to estimate the health system's total cost of processing an insurance claim. Exposures: Estimated time required to perform billing and insurance-related activities, based on interviews with management personnel and physicians. Main Outcomes and Measures: Estimated billing and insurance-related costs for 5 types of patient encounters: primary care visits, discharged emergency department visits, general medicine inpatient stays, ambulatory surgical procedures, and inpatient surgical procedures. Results: Estimated processing time and total costs for billing and insurance-related activities were 13 minutes and $20.49 for a primary care visit, 32 minutes and $61.54 for a discharged emergency department visit, 73 minutes and $124.26 for a general inpatient stay, 75 minutes and $170.40 for an ambulatory surgical procedure, and 100 minutes and $215.10 for an inpatient surgical procedure. Of these totals, time and costs for activities carried out by physicians were estimated at a median of 3 minutes or $6.36 for a primary care visit, 3 minutes or $10.97 for an emergency department visit, 5 minutes or $13.29 for a general inpatient stay, 15 minutes or $51.20 for an ambulatory surgical procedure, and 15 minutes or $51.20 for an inpatient surgical procedure. Of professional revenue, professional billing costs were estimated to represent 14.5% for primary care visits, 25.2% for emergency department visits, 8.0% for general medicine inpatient stays, 13.4% for ambulatory surgical procedures, and 3.1% for inpatient surgical procedures. Conclusions and Relevance: In a time-driven activity-based costing study in a large academic health care system with a certified electronic health record system, the estimated costs of billing and insurance-related activities ranged from $20 for a primary care visit to $215 for an inpatient surgical procedure. Knowledge of how specific billing and insurance-related activities contribute to administrative costs may help inform policy solutions to reduce these expenses.