Global Production of Active Pharmaceutical Ingredients for US Generic Drugs Experiencing Shortages.

This study evaluates the characteristics of generic active pharmaceutical ingredients (APIs) used to manufacture drugs with shortages in the US and facilities producing APIs worldwide.

Adjusting starting points for initial price offers: the example of ibrutinib.

The Inflation Reduction Act of 2022 (IRA) allows the Medicare program to negotiate drug prices beginning in 2024. Based on the guidance in the statute, CMS has selected specific data items to use to adjust initial price offers for 10 drugs in the decision-making process. Although much of the data are publicly available, some of these data items will need to be collected directly from drug companies. A 2019 US House of Representatives Committee on Oversight and Accountability investigative report collected a wide range of data from manufacturers of 12 high-revenue drugs that show what is available from the drug companies, including development costs, marketing, pricing, competition, and patent status. This article focuses on the data obtained for ibrutinib, an oral medication for treating hematologic malignancies, which is one of the only drugs reviewed by the committee that also has been selected for Medicare price negotiation. We examine data that can be obtained only from the drug manufacturer that the IRA has explicitly identified as being used to determine the price and suggest potential negotiation strategies for CMS in response.

Hospital and Physician Group Practice Participation in Prior and Next-Generation Value-Based Payment Programs.

This cohort study examines whether prior direct or indirect participation in the Centers for Medicare & Medicaid Innovation Bundled Payments for Care Improvement (BCPI) Initiative was associated with their participation in the next generation of the program.

Spending on Dual Over-the-Counter and Prescription Drugs in the Medicare Part D Program.

This study compares Medicare and patient spending for dual over-the-counter and prescription drugs with their over-the-counter cash prices.

Do Insurers With Greater Market Power Negotiate Consistently Lower Prices for Hospital Care? Evidence From Hospital Price Transparency Data.

This study examined if greater insurer market power was associated with consistently lower negotiated prices within each hospital for 44 shoppable and emergency procedures, using price transparency data disclosed by 1,506 hospitals in metropolitan areas. We used multi-level fixed effects models to estimate the within-hospital variation in plan-level insurer-negotiated prices (from the largest insurer, the second largest insurer, other major insurers, and nonmajor insurers) and cash-pay prices as a function of insurer market power. For shoppable services, relative to nonmajor insurers, the largest, second largest, and other major insurers negotiated 23%, 16%, and 3% lower prices, respectively, while cash prices were 17% higher. For emergency room visits, while the largest insurers paid 5% less than nonmajor insurers, the second largest and other major insurers did not pay lower prices. Stratified analyses by type of shoppable services found varying magnitudes and patterns of price discounts associated with insurer market power.

Characteristics of Prescription Drug Fills Using Pharmacy-Pharmacy Benefit Manager Discount Programs: The "GoodRx" Model.

OBJECTIVES: This study aimed to characterize products using pharmacy-pharmacy benefit manager (PBM) discounts and to estimate the association among such discounts, prescription utilization, and out-of-pocket costs. METHODS: This is a retrospective cohort study using IQVIA's Formulary Impact Analyzer, which contains anonymized, individual-level pharmacy claims representing US retail pharmacy transactions. We focused on 20 products with the greatest number of transactions using a pharmacy-PBM discount. Our unit of analysis was a treatment episode, defined as the length of time from an incident fill to no continuous use for 60 consecutive days after allowing for indefinite stockpiling. Outcome measures included products with greatest pharmacy-PBM discount use, characteristics of treatment episodes, and out-of-pocket costs with and without pharmacy-PBM discount. RESULTS: Across all products, 3.82% of transactions and 7.69% of treatment episodes were accompanied by a pharmacy-PBM discount. Commonly discounted products included generic treatments for chronic disease (lisinopril, levothyroxine, metformin) and neuropsychiatric conditions (alprazolam, amphetamine, buprenorphine, hydrocodone). The median postdiscount out-of-pocket cost was >2.5-fold higher during treatment episodes with a discount than those without ($15.15, interquartile range [IQR] $8.53-32.00, vs $5.88, IQR $1.40-15.00). Median treatment episode duration was 249 days (IQR 132-418) with discount use compared with 236 days (IQR 121-396) without discount use, although treatment episodes that began with a discount had fewer transactions per treatment episode and were shorter (median 212 days, IQR 114-360) than those that did not (313 days, IQR 178-500). CONCLUSIONS: Pharmacy-PBM discounts may foster market competition and improve access for under- and uninsured individuals; however, these programs may not generate savings for many insured individuals.

Sociodemographic and spending characteristics of Medicare beneficiaries taking prescription drugs subject to price negotiations.

BACKGROUND: The 2022 Inflation Reduction Act authorizes Medicare to negotiate the prices of 10 drugs in 2026 and additional drugs thereafter. Understanding the sociodemographic and spending characteristics of beneficiaries taking these specific drugs could be important describing the impact of the legislation. OBJECTIVE: To describe sociodemographic and spending characteristics of Medicare beneficiaries who use the 10 prescription drugs ("negotiated drugs") that will face Medicare drug price negotiations in 2026. METHODS: A 20% sample of Medicare Part D beneficiaries from 2020 (n = 10,224,642) was used. Sociodemographic and spending characteristics were descriptively reported for beneficiaries taking the negotiated drugs, including subgroups by low-income subsidy (LIS) status and by drug, and for Part D beneficiaries not taking negotiated drugs. RESULTS: Part D beneficiaries taking a negotiated drug compared with Part D beneficiaries not taking a negotiated drug overall had similar sociodemographic characteristics, more comorbidities (3.9 vs 2.2) and higher mean [median] Medicare ($33,882 [$18,251] vs $12,366 [$3,429]) and out-of-pocket (OOP) spending ($813 [$307] vs $441 [$160]). There was variation in characteristics by LIS status. The mean age was highest among non-LIS beneficiaries taking a negotiated drug compared with LIS beneficiaries taking a negotiated drug and beneficiaries not taking a negotiated drug (76.2 vs 69.9 vs 71.4). Among beneficiaries using negotiated drugs, a higher percentage of LIS beneficiaries compared with non-LIS was female (59.7% vs 48.0%), was Black (20.9% vs 6.6%), and resided in lower-income areas (39.1% vs 20.3%). Mean [median] annual Part D OOP spending for negotiated drugs was $115 [$59] for beneficiaries with LIS and $1,475 [$1,204] for beneficiaries without LIS. There were also differences depending on which negotiated drug was used. Drugs for cancer and blood clots had the highest proportions of White users, whereas type 2 diabetes and heart failure drugs had the highest proportions of Black users and beneficiaries residing in lower-income areas. Annual Part D OOP costs were lowest for sitagliptin (LIS: $104 [$60], non-LIS: $1,391 [$1,153]) and highest for ibrutinib (LIS: $649 [$649], non-LIS: $6,449 [$6,867]). Among non-LIS beneficiaries, 24% (22% to 76%) had more than $2,000 in OOP costs. CONCLUSIONS: Inflation Reduction Act OOP spending caps and LIS expansion will lower prescription drug costs for beneficiaries with OOP costs exceeding $2,000 who are mostly White and live in higher-income areas, insulin users who are disproportionately Black with multiple chronic conditions, and beneficiaries with low incomes. However, these provisions will not impact the 76% of non-LIS beneficiaries using negotiated drugs who have OOP costs that are still substantial but below $2,000. Negotiations could reduce OOP costs through reduced coinsurance payments for this group, which is older and has more chronic conditions compared with beneficiaries not taking negotiated drugs. Part D plan design, spending, and utilization changes should be monitored after negotiation to determine if further solutions are needed to lower OOP costs for this group.

Filgrastim and infliximab biosimilar uptake in Medicare Advantage compared with Traditional Medicare, 2016-2019.

BACKGROUND: Medicare Advantage (MA) and Traditional Medicare face different financing structures and incentives and may implement different strategies to encourage biosimilar uptake. Strategies used by health insurers can influence biosimilar uptake, which can in turn promote savings to insurers and patients. OBJECTIVE: To compare filgrastim and infliximab biosimilar uptake between MA and Traditional Medicare from 2016 to 2019 and examine biosimilar uptake by different MA carriers and plan types (Health Maintenance Organization [HMO] or Preferred Provider Organization). METHODS: We use a 2016-2019 nationally representative random 20% sample of the carrier (physician) and outpatient paid claims for Traditional Medicare data and final-action carrier and outpatient records for MA data. We compare quarterly biosimilar uptake from 2016 to 2019 for the first 2 drugs with biosimilar competition: (1) filgrastim, (Neupogen, originator), and biosimilars tbo-filgrastim (GRANIX) and filgrastim-sndz (ZARXIO), and (2) infliximab (Remicade, originator), and biosimilars infliximab-dyyb (Inflectra) and infliximab-abda (Renflexis). RESULTS: From their introduction, there was consistently greater uptake of filgrastim and infliximab biosimilars in MA compared with Traditional Medicare. By Q4 2019, filgrastim biosimilar uptake was 7.6 percentage points higher in MA (80.3%) than Traditional Medicare (72.7%). By Q4 2019, infliximab biosimilar uptake was 28.7% and 15.4% in MA and Traditional Medicare, respectively. Kaiser HMO plans were primarily responsible for the higher uptake of biosimilars in MA; in Q4 2019, filgrastim and infliximab biosimilar uptake was 98.8% and 78.8%, respectively. CONCLUSIONS: Our findings suggest that filgrastim and infliximab biosimilar uptake is greater in MA compared with Traditional Medicare, which is driven in part by particularly high uptake of biosimilars in MA Kaiser HMO plans. This highlights the need for future work to examine specific strategies and levers employed by MA Kaiser HMO plans and other insurers to increase biosimilar uptake, which can lead to cost savings for physician-administered drugs.

Facility Fees for Colonoscopy Procedures at Hospitals and Ambulatory Surgery Centers.

This cross-sectional study investigates commercial facility fee differences for colonoscopy procedures between US hospitals and ambulatory surgery centers located within the same county and contracting with the same insurers.

Hospital Prices in Medicaid Managed Care.

This cross-sectional study uses hospitals' self-disclosed pricing information to characterize Medicaid managed care hospital prices.

Pharmacy Benefit Manager Pricing and Spread Pricing for High-Utilization Generic Drugs.

This cross-sectional study uses Medicare Part D claims for high-utilization generic drugs to analyze gross profits accumulated by pharmacy benefit managers, pharmacies, wholesalers, and manufacturers in the pharmaceutical supply chain.

Role of Registries in Medicare Coverage of New Alzheimer Disease Drugs.

This Viewpoint discusses how the design of the Centers for Medicare & Medicaid Services (CMS) registry could impact Medicare's ability to evaluate whether monoclonal antibodies are reasonable and necessary for patients with Alzheimer disease and help physicians understand when the drug is most beneficial.

Estimated Savings From Using Added Therapeutic Benefit and Therapeutic Reference Pricing in United States Medicare Drug Price Negotiations.

OBJECTIVES: US Medicare will begin negotiating prices for top-selling drugs in 2023. This study describes and estimates potential savings from a therapeutic reference pricing approach, linking comparative effectiveness with the costs of existing therapeutic alternatives, that Medicare could use to adjust the starting point for price negotiations. METHODS: First, we identified target drugs likely to be selected for Medicare negotiation. Second, we identified comparative effectiveness ratings for target drugs based on French Haute Autorité de Santé reports. For target drugs with minor or no added benefit, we identified therapeutic alternatives based on the French reports and US clinical guidelines. For each target drug with minor or no added benefit, we computed the difference between spending based on the drug's estimated statutory ceiling price and spending based on the weighted average cost of therapeutic alternatives or the lowest cost therapeutic alternative. Finally, we calculated potential annual savings from using a starting point in negotiations based on costs of therapeutic alternatives. RESULTS: Potential drug-level savings to Medicare from using a starting point in negotiations based on average spending across therapeutic alternatives, compared with using the statutory ceiling price alone, ranged from $186 541 340 to $2 173 441 197. Potential savings from using a starting point based on the lowest cost alternative ranged from $199 872 163 to $3 605 904 765. CONCLUSIONS: Although we do not expect Medicare to rely on French comparative effectiveness assessments, this study demonstrates the potential for additional savings when using comparative effectiveness and costs of therapeutic alternatives to inform the starting price for negotiations.

Hospital Prices For Commercial Plans Are Twice Those For Medicare Advantage Plans When Negotiated By The Same Insurer.

Most major insurers operate in both the commercial health insurance and Medicare Advantage (MA) markets. We investigated the ratio of commercial-to-MA prices negotiated by the same insurer, in the same hospital and for the same services, using 2022 price information disclosed by hospitals in compliance with the hospital price transparency rule. Insurers negotiated median hospital prices for commercial plans that were two to three times higher than their MA prices in the same hospital for the same service. The median commercial-to-MA price ratio in the same hospital varied, from 1.8 for surgery and medicine services to 2.2 for laboratory tests and emergency department visits and 2.4 for imaging services. In multivariable Poisson regression analysis, higher ratios were associated with system-affiliated, nonprofit, and teaching hospitals, as well as with large national insurers. These findings reflect the differences in financial incentives and regulatory policies in the commercial and MA markets. Because insurers respond to differing incentives by obtaining different negotiated prices across markets, policy and practice efforts that alter incentives for insurers may have the potential to lower commercial prices.

Incorporating Added Therapeutic Benefit and Domestic Reference Pricing Into Medicare Payment for Expensive Part B Drugs.

OBJECTIVES: Identify expensive Part B drugs and evidence for each drug's added benefit and model a reimbursement policy for Medicare that integrates added benefit assessment and domestic reference pricing. METHODS: A retrospective analysis using a 20% nationally representative sample of 2015 to 2019 traditional Medicare Part B claims. Expensive drugs were defined as having average annual spending per beneficiary exceeding the average annual social security benefit ($17 532 in 2019). For expensive drugs identified in 2019, added benefit assessments conducted by the French Haute Autorité de Santé were collected. For expensive drugs with a low added benefit rating, comparator drugs were identified in French Haute Autorité de Santé reports. For each comparator, average annual spending per beneficiary in Part B was computed. Potential savings from 2 reference pricing scenarios were calculated: reimbursing expensive Part B drugs with low added benefit at the level of each drug's (1) lowest cost comparator and (2) beneficiary-weighted-average cost of all comparators. RESULTS: The number of expensive Part B drugs grew from 56 in 2015 to 92 in 2019. Of the 92 expensive drugs in 2019, 34 offer low added benefit. Implementing reference pricing for these expensive drugs with low added benefit could have saved an estimated $2.1 billion if prices were set based on spending for their lowest cost comparator, or $1 billion if prices were set based on the weighted average of spending for comparators. CONCLUSION: Reference pricing based on added benefit assessment could be used to address the launch prices for expensive Part B drugs with low added benefit.

Comparison of Price Index Methods and Drug Price Inflation Estimates for Hepatitis C Virus Medications.

Importance: Measuring drug price inflation is challenging because new drugs continually enter the market, some drugs transition from branded to generic, and current inflation indexes do not account for these market basket changes. Instead, they measure the price increases after new drugs have been launched. Therefore, the public pays the higher costs of newer and usually more expensive drugs, but the inflation indexes do not reflect the increases over existing drugs previously used to treat the same conditions. Objective: To assess how price index methods can affect estimates of drug price inflation using a case study of hepatitis C virus (HCV) medication and to explore other approaches for constructing a price index. Design, Setting, and Participants: This cross-sectional study used data from outpatient pharmacies to compile a list of all HCV medications that were ever on the market (brand and generic) from 2013 to 2020. Using National Drug Codes of HCV drugs, a 20% nationally representative sample of Medicare Part D claims from 2013 to 2020 was queried. Alternative drug price indexes, including product-level vs class-level product and quantity definitions were developed in which gross vs net price definitions were used and an adjustment was created and applied to capture treatment duration because newer drugs often required a shorter duration. Main Outcomes and Measures: Price index value and rate of inflation from 2013 to 2020 for each methodologic approach to constructing a drug pricing index. Results: In all, 27 different HCV drug regimens were identified in Medicare Part D claims in 2013 to 2020. A product-level approach for measuring inflation estimated a 10% gross drug price increase from 2013 to 2020 for HCV drugs, whereas a class-level approach including the higher prices of the new drugs showed a 31% gross price increase. After adjusting for manufacturer rebates to estimate net prices, the findings showed that HCV drug prices fell by 31% from 2013 to 2020. Conclusions and Relevance: The findings of this cross-sectional study indicate that the current product-level methods to estimate drug price inflation underestimated price increases for HCV drugs by failing to include the high launch prices of new market entrants. Using a class-level approach, the index captured higher spending on new products at launch. Prescription-level analyses, which did not consider shorter durations of treatment, overestimated price increases.

Estimating Changes in Medicare Part D and Commercial Insurer Insulin Spending Amid Planned State-Led Biosimilar Insulin Production in California.

This cross-sectional study evaluates the cost savings of state-led manufacturing and selling of biosimilar insulin.

Comparison of Out-of-Pocket Spending on Ultra-Expensive Drugs in Medicare Part D vs Commercial Insurance.

Importance: Little is known about how out-of-pocket burden differs between Medicare and commercial insurance for ultra-expensive drugs. Objective: To investigate out-of-pocket spending for ultra-expensive drugs in the Medicare Part D program vs commercial insurance. Design, Setting, and Participants: This was a retrospective, population-based cohort study of individuals using ultra-expensive drugs included in a 20% nationally random sample of prescription drug claims from Medicare Part D and individuals aged 45 to 64 years using ultra-expensive drugs included in a large national convenience sample of outpatient pharmaceutical claims from commercial insurance plans. Claims data from 2013 through 2019 were used, and data were analyzed in February 2023. Main Outcomes and Measures: Claims-weighted mean out-of-pocket spending per beneficiary per drug by insurance type, plan, and age. Results: In 2019, 37 324 and 24 159 individuals using ultra-expensive drugs were identified in the 20% Part D and commercial samples, respectively (mean [SD] age, 66.2 [11.7] years; 54.9% female). A statistically significant higher share of commercial enrollees vs Part D beneficiaries were female (61.0% vs 51.0%; P < .001), and a statistically significantly lower share were using 3 or more branded medications (28.7% vs 42.6%; P < .001). Mean out-of-pocket spending per beneficiary per drug in 2019 was $4478 in Part D (median [IQR], $4169 [$3369-$5947]) compared with $1821 for commercial (median [IQR], $1272 [$703-$1924]); these differences were statistically significant every year. Differences in out-of-pocket spending comparing commercial enrollees aged 60 to 64 years and Part D beneficiaries aged 65 to 69 years exhibited similar magnitudes and trends. By plan, mean out-of-pocket spending per beneficiary per drug in 2019 was $4301 (median [IQR], $4131 [$3000-$6048]) in Medicare Advantage prescription drug (MAPD) plans, $4575 (median [IQR], $4190 [$3305-$5799]) in stand-alone prescription drug plans (PDPs), $1208 (median [IQR], $752 [$317-$1240]) in health maintenance organization plans, $1569 (median [IQR], $838 [$481-$1472]) in preferred provider organization plans, and $4077 (median [IQR], $2882 [$1075-$4226]) in high-deductible health plans. There were no statistically significant differences between MAPD plans and stand-alone PDPs in any study year. Mean out-of-pocket spending was statistically significantly higher in MAPD plans compared with health maintenance organization plans and in stand-alone PDPs compared with preferred provider organization plans in each study year. Conclusions and Relevance: This cohort study demonstrated that the $2000 out-of-pocket cap included in the Inflation Reduction Act may substantially moderate the potential increase in spending faced by individuals who use ultra-expensive drugs when moving from commercial insurance to Part D coverage.

Patterns of Manufacturer Coupon Use for Prescription Drugs in the US, 2017-2019.

Importance: Although manufacturer-sponsored coupons are commonly used, little is known about how patients use them within a treatment episode. Objectives: To examine when and how frequently patients use manufacturer coupons during a treatment episode for a chronic condition, and to characterize factors associated with more frequent use. Design, Setting, and Participants: This is a retrospective cohort study of a 5% nationally representative sample of anonymized longitudinal retail pharmacy claims data from October 1, 2017, to September 30, 2019, obtained from IQVIA's Formulary Impact Analyzer. The data were analyzed from September to December 2022. Patients with new treatment episodes using at least 1 manufacturer coupon over a 12-month period were identified. This study focused on patients with 3 or more fills for a given drug and characterized the association of the outcomes of interest with patient, drug, and drug class characteristics. Main Outcomes and Measures: The primary outcomes were (1) the frequency of coupon use, measured as the proportion of prescription fills accompanied by manufacturer coupon within the treatment episode, and (2) the timing of first coupon use relative to the first prescription fill within the treatment episode. Results: A total of 36 951 treatment episodes accounted for 238 474 drug claims and 35 352 unique patients (mean [SD] age, 48.1 [18.2] years; 17 676 women [50.0%]). Among these episodes, nearly all instances (35 103 episodes [95.0%]) of first coupon use occurred within the first 4 prescription fills. Approximately two-thirds of treatment episodes (24 351 episodes [65.9%]) used a coupon for the incident fill. Coupons were used for a median (IQR) of 3 (2-6) fills. The median (IQR) proportion of fills with a coupon was 70.0% (33.3%-100.0%), and many patients discontinued the drug after the last coupon. After adjustment for covariates, there was no significant association between an individual's out-of-pocket costs or neighborhood-level income and the frequency of coupon use. The estimated proportion of fills with a coupon was greater for products in competitive (19.5% increase; 95% CI, 2.1%-36.9%) or oligopolistic (14.5% increase; 95% CI, 3.5%-25.6%) markets than monopoly markets when there is only 1 drug in the therapeutic class. Conclusions and Relevance: In this retrospective cohort analysis of individuals receiving pharmaceutical treatment for chronic diseases, the frequency of manufacturer-sponsored drug coupon use was associated with the degree of market competition, rather than patients' out-of-pocket costs.

The Relationships Among Cash Prices, Negotiated Rates, And Chargemaster Prices For Shoppable Hospital Services.

Hospitals must disclose their cash prices, commercial negotiated rates, and chargemaster prices for seventy common, shoppable services under the hospital price transparency rule. Examining prices reported by 2,379 hospitals as of September 9, 2022, we found that a given hospital's cash prices and commercial negotiated rates both tended to reflect a predetermined and consistent percentage discount from its chargemaster prices. On average, cash prices and commercial negotiated rates were 64 percent and 58 percent of the corresponding chargemaster prices for the same procedures at the same hospital and in the same service setting, respectively. Cash prices were lower than the median commercial negotiated rates in 47 percent of instances, and most likely so at hospitals with government or nonprofit ownership, located outside of metropolitan areas, or located in counties with relatively high uninsurance rates or low median household incomes. Hospitals with stronger market power were most likely to offer cash prices below their median negotiated rates, whereas hospitals in areas where insurers had stronger market power were less likely to do so.