The influence of Medicare Part D on the list pricing of brand drugs

Objective

To compare the Medicare Part D market share of brand drugs with their net-to-list price ratio.

Data Sources and Study Setting

SSR Health Brand Net Price Tool and Medical Expenditure Panel Survey, 2007–2019.

Study Design

For each drug, we calculated the ratio of net to list price and the percent of users that were Medicare-eligible. We compared these cross-sectionally in each year and estimated a difference-in-differences model comparing drugs with high or low Medicare market shares (MMS) after following changes to program incentives in 2010.

Data Collection/Extraction Methods

The sample included brand drugs without generic competitors appearing in both datasets.

Principal Findings

Net-to-list price ratios were negatively correlated with MMS in the later years of our sample. In 2019, a 10% increase in MMS was associated with a significant 4.6% [95% CI: 2.1%, 7.1%] decrease in net-to-list ratio. Difference-in-differences showed net-to-list price ratios of drugs with above median MMS fell relative to those with below median MMS. By 2019, we observe an absolute reduction of −0.2 [95% CI: −0.29, −0.11], representing 28% reduction relative to the average ratio in 2010.

Conclusions

Greater exposure to the Medicare Part D market was associated with larger differences between net and list prices of drugs.     

Consumer price sensitivity and health plan choice in a regulated competition setting

We estimate premium elasticities in a regulated competition market based on a quasi‐exogenous premium increase for young adults in Switzerland. We exploit that individuals born before the turn of the year (“treatment group”) face a larger increase in premiums than individuals born after the turn of the year (“control group”). We find that the treatment group is 1.5 times more likely to switch their health plan than the control group. Overall, individuals respond to premium increases by choosing more frequently health plans with managed care features, increasing the deductible, and by switching the insurer. Regarding health plan choice, we find an average elasticity of ?0.56 with regard to the relative premium difference of any plan to the status quo contract. The elasticity is up to 5 times larger for the treated (?1.03) than for the controls (?0.19). Our results are not driven by health status as measured by health care expenditures and chronic conditions. Rather, our findings suggest that the difference in the premium elasticity is driven by the salience of the premium increase. We argue that this finding is of high relevance for health care policies that aim at fostering health plan competition.     

我国处方药品价格及其均衡机制分析

我国现有的药品生产流通体制以及医院药品加成销售制度改变了传统意义上的药品需求曲线,药品的供方（药企）和需方（医院）在推高药品价格上具有共同的利益动机,药品供需的价格均衡点取决于药品供给和需求的弹性.这在一定程度上可解释我国部分处方药品价格越高医院销售量反而越大,以及药品集中招标采购过程中低价药“中标即死”,以致投标药企与招标医院合谋提高招投标价格等许多反常的现象.     

In search of a corrected prescription drug elasticity estimate: a meta-regression approach

An understanding of the relationship between cost sharing and drug consumption depends on consistent and unbiased price elasticity estimates. However, there is wide heterogeneity among studies, which constrains the applicability of elasticity estimates for empirical purposes and policy simulation. This paper attempts to provide a corrected measure of the drug price elasticity by employing meta-regression analysis (MRA). The results indicate that the elasticity estimates are significantly different from zero, and the corrected elasticity is -0.209 when the results are made robust to heteroskedasticity and clustering of observations. Elasticity values are higher when the study was published in an economic journal, when the study employed a greater number of observations, and when the study used aggregate data. Elasticity estimates are lower when the institutional setting was a tax-based health insurance system.     

Trends in Medicare Part D Medication Therapy Management Eligibility Criteria

Background

To increase the enrollment rate of medication therapy management (MTM) programs in Medicare Part D plans, the US Centers for Medicare & Medicaid Services (CMS) lowered the allowable eligibility thresholds based on the number of chronic diseases and Part D drugs for Medicare Part D plans for 2010 and after. However, an increase in MTM enrollment rates has not been realized.

Objectives

To describe trends in MTM eligibility thresholds used by Medicare Part D plans and to identify patterns that may hinder enrollment in MTM programs.

Methods

This study analyzed data extracted from the Medicare Part D MTM Programs Fact Sheets (2008–2014). The annual percentages of utilizing each threshold value of the number of chronic diseases and Part D drugs, as well as other aspects of MTM enrollment practices, were analyzed among Medicare MTM programs that were established by Medicare Part D plans.

Results

For 2010 and after, increased proportions of Medicare Part D plans set their eligibility thresholds at the maximum numbers allowable. For example, in 2008, 48.7% of Medicare Part D plans (N = 347:712) opened MTM enrollment to Medicare beneficiaries with only 2 chronic disease states (specific diseases varied between plans), whereas the other half restricted enrollment to patients with a minimum of 3 to 5 chronic disease states. After 2010, only approximately 20% of plans opened their MTM enrollment to patients with 2 chronic disease states, with the remaining 80% restricting enrollment to patients with 3 or more chronic diseases.

Conclusion

The policy change by CMS for 2010 and after is associated with increased proportions of plans setting their MTM eligibility thresholds at the maximum numbers allowable. Changes to the eligibility thresholds by Medicare Part D plans might have acted as a barrier for increased MTM enrollment. Thus, CMS may need to identify alternative strategies to increase MTM enrollment in Medicare plans.