Perspective from Suneya Hogarty, DO, FACOI
Source/Disclosures
Source:

Erath A, et al. JAMA Network Open. 2020;doi:10.1001/jamanetworkopen.2020.3969.

April 27, 2020
2 min read
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Annual price hikes for RA biologics greatly 'eroded' Medicare Part D cost savings

Perspective from Suneya Hogarty, DO, FACOI
Source/Disclosures
Source:

Erath A, et al. JAMA Network Open. 2020;doi:10.1001/jamanetworkopen.2020.3969.

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Alexandra Erath

Despite large reductions in out-of-pocket spending from 2010 to 2011, Medicare Part D beneficiaries who receive biologics for rheumatoid arthritis saw more than half of those savings lost by 2019 due to annual list price increases, according to data published in JAMA Network Open.

“Our study showed that despite the recent closure of the Medicare Part D coverage gap, or ‘donut hole,’ yearly increases in drug list prices have already eroded much of the anticipated savings for RA patients on specialty therapy,” Alexandra Erath, BA, of the Vanderbilt University School of Medicine, told Healio Rheumatology. “On average, in 2010, before the Part D donut hole was closed, the estimated annual out-of-pocket spending for a patient chronically using these drugs was $5,858.”

“In 2019, after the Part D donut hole was closed, the annual average out-of-pocket cost was estimated to be $4,801,” she added. “It is likely that patients will see their out-of-pocket spending continue to increase for these drugs as list prices continue to climb.”

To analyze the association of the closure of the Medicare Part D coverage gap with projected out-of-pocket costs over nine years for RA biologics, Erath and Stacie B. Dusetzina, PhD, also from the Vanderbilt University School of Medicine, conducted a cross-sectional study of available Medicare data. Using the Medicare Formulary and Pricing Files for the first quarter in each calendar year from 2010 to 2019, the researchers assessed data on 17 biologics used to treat RA.

Despite large reductions in out-of-pocket spending from 2010 to 2011, Medicare Part D beneficiaries who receive biologics for rheumatoid arthritis saw more than half of those savings lost by 2019 due to annual list price increases
Despite large reductions in out-of-pocket spending from 2010 to 2011, Medicare Part D beneficiaries who receive biologics for RA saw more than half of those savings lost by 2019 due to annual list price increases, according to data.

Exposures included Medicare Part D plan design and drug price by year. The primary outcome was the expected annual out-of-pocket costs for 1 year of treatment.

According to the researchers, list prices increased each year for every included product, resulting in a mean increase of 160% for the six drugs available during the full study period. For these six biologics, projected mean annual out-of-pocket costs were 34% lower in 2011 than in 2010 — $6,108 in 2010 vs. $4,026 in 2011 — yet only 21% lower in 2019 — $4,801 — due to annual list price increases. Among the four products with higher out-of-pocket costs in 2019 than in the first year available, all entered the market between 2011 and 2015.

For all included biologics, the percentage of money spent in the catastrophic phase increased each year, and was a mean of 22% higher in 2019 than in 2010, or the year first available.

“The key takeaways are that while the closure of the Part D coverage gap has helped lower costs for seniors, patients taking expensive biologic drugs still face significant out-of-pocket costs and no annual cap on drug spending,” Erath said. “From a policy standpoint, our results support an annual cap on patients’ out-of-pocket costs as well as an annual limit on manufacturers’ increases of list prices.”

Medicare patients taking RA biologics are still exposed to significant out-of-pocket costs, and we know that higher out-of-pocket costs are associated with nonadherence and poorer clinical outcomes,” she added. “That is significant in itself; these patients are still being asked to pay thousands of dollars a year for access to medication for a chronic condition.” – by Jason Laday

Disclosures: Dusetzina reports grants from Arnold Ventures, The Commonwealth Fund and The Leukemia and Lymphoma Society, as well as personal fees from the Institute for Clinical and Economic Review.