Prescribing Patterns and the Cost of Brand Medications
Ophthalmology, March 2018
Prescription drugs are the fastest-growing sector of health care spending. Newman-Casey et al. conducted research to quantify the costs of ophthalmic medications prescribed by eye care providers, compare prescribing patterns between these and other providers, and estimate savings from negotiating prices and substituting generic/therapeutic alternatives for brand medications. They found that, among all providers, eye care specialists prescribe the highest proportion of brand name drugs by volume.
The study used data from the 2013 Medicare Part D prescriber public use file and summary file (released in 2015) to calculate medication costs by specialty and drug. Potential savings from substituting generic or therapeutic options for brand drugs were calculated. Potential savings were estimated using drug prices negotiated by the U.S. Veterans Health Administration.
Eye care providers (ophthalmologists and optometrists) accounted for $2.4 billion of the $103 billion total Medicare Part D costs for prescription drugs and produced the highest percentage of claims for brand medications among all specialties. Medications accounted for a significantly higher proportion of monthly supplies by volume as well as by total cost for eye care providers relative to other providers (38% vs. 23% by volume; 79% vs. 56% by total cost).
As for medication type, glaucoma drugs accounted for the largest proportion of costs generated by eye care providers ($1.2 billion; 54% of total cost; 72% of total volume), followed by drugs for dry eye syndrome. Restasis, which currently has no generic alternative, was responsible for nearly 99% ($371 million) of drug expenditures in the dry eye category (17% of total cost; 4% of total volume). The Medicare Part D average payment for a monthly supply of Restasis was $293, higher than the amount for any other drug.
If generics could be substituted for brand drugs, savings of approximately 7% ($148 million) would be realized. The combination of generic and therapeutic substitutions would yield savings of 42% ($882 million). If Medicare could attain Veterans Health Administration rates for medications, the resulting savings would be 53% ($1.09 billion).
Efforts to reduce drug expenditures associated with eye care professionals should focus on greater use of generic and therapeutic options. Policy changes enabling Medicare to negotiate lower prices for prescription drugs could yield substantial savings for the program.
The original article can be found here.