Although the 2010 Patient Protection and Affordable Care Act attempted to close the coverage gap for prescription drugs, a new study has found that yearly price increases for expensive treatments like rheumatoid arthritis biologics have kept out-of-pocket spending high for patients enrolled in Medicare Part D.
“As the coverage gap is now considered closed, our results suggest a need for out-of-pocket maximums in the catastrophic phase to limit older Americans’ yearly financial burden and allow them to better estimate their annual drug costs,” wrote coauthors Alexandra Erath and Stacie B. Dusetzina, PhD, of Vanderbilt University in Nashville, Tenn. The study was published in JAMA Network Open.
To determine if closing the Medicare Part D coverage gap lowered out-of-pocket costs as anticipated, the researchers embarked on a cross-sectional study of Medicare data from the first quarter of each calendar year from 2010 to 2019. They analyzed the costs of 17 RA biologic drug and strength combinations, calculating the median point-of-sale price per fill for each drug and adjusting for medical inflation.
From 2010 to 2019, the median price per fill increased for all 17 drugs studied. With the exception of the 100-mg/1-mL golimumab (Simponi) autoinjector, every drug that had been on the market for 5 years or longer had a price increase of more than 20%. For the six drugs that have been on the market since 2010 – 200 mg of certolizumab pegol (Cimzia), 25 mg of etanercept (Enbrel), 50 mg of etanercept, 20 mg/0.4 mL of adalimumab (Humira), 40 mg/0.8 mL of adalimumab, and 50 mg/0.5 mL of golimumab – the median list price increased by a mean of 160% (standard deviation [SD], 17%; range, 136%-180%).
Mean (SD) annual out-of-pocket spending for those six drugs did decrease from $6,108 (SD, $234; range, $5,647-6,282) in 2010 to $4,801 (SD, $620; range, $3,594-$5,196) in 2019. However, the most significant decrease actually occurred between 2010 and 2011, when out-of-pocket spending dropped to $4,026 because the Affordable Care Act’s 50% manufacturer rebate for brand-name drugs filled in the coverage gap. This meant there was actually a mean increase of 19% in out-of-pocket costs from 2011 to 2019.
“This is the same story as the EpiPen,” said Maria Greenwald, MD, of Desert Medical Advances in Palm Desert, Calif., in an interview. “Patients have to have it, so you’re going to pay $600 even if you used to pay $50. Why do pharmaceutical companies keep raising their prices? Because they can. There’s no cap on list prices. And these drugs are miracles. They’re the difference between a high quality of life and being bound to a wheelchair. These patients don’t sleep without them. They’ll do whatever they can to pay for them, and so the prices continue to go up.”
This study reinforces the need for physicians to advocate for affordable biologics across the board, wrote Joel Lexchin, MD, of York University in Toronto in an accompanying editorial (doi: 10.1001/jamanetworkopen.2020.4753).
“Price increases for biologics do not only affect patients with rheumatologic conditions,” Dr. Lexchin noted, citing how the cost of multiple sclerosis therapies increased by thousands of dollars from the mid-1990s to 2013. In addition, although biologics make up a single-digit percentage of prescriptions in the United States, he highlighted that “they are responsible for $120 billion or 37% of net drug spending and, since 2014, for 93% of the overall growth in total spending.”
When it comes to potential solutions, he said that Medicare should negotiate directly with drug companies, that substitutions with biosimilars should become mandatory whenever possible, and that pharmaceutical companies should publicly validate their alleged research and development expenses. “Biologics can be transformational treatments,” he wrote, “but only if they are affordable at both the individual and societal levels.”
The authors shared their study’s potential limitations, including relying on list prices that do not factor in rebates and focusing on a single biologic filled every month rather than all treatments filled under Medicare, which could “result in our underestimating out-of-pocket spending by patients.” In addition, although a growing RA biosimilar market could increase price competition and lower costs, they added that progress in that area is limited by “aggressive litigation by the biologic manufacturers and an insufficient number of competitors to markedly affect price.”
The study was supported by the Commonwealth Fund and the Leukemia and Lymphoma Society. Dr. Dusetzina reported receiving grants from Arnold Ventures and personal fees from the Institute for Clinical and Economic Review.
SOURCE: Erath A et al. JAMA Netw Open. 2020 Apr 27. doi: 10.1001/jamanetworkopen.2020.3969.