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Research

Spending on World Health Organization essential medicines in Medicare Part D, 2011-15: retrospective cost analysis

BMJ 2019; 366 doi: https://doi.org/10.1136/bmj.l4257 (Published 17 July 2019) Cite this as: BMJ 2019;366:l4257
  1. David G Li, research fellow1 2,
  2. Mehdi Najafzadeh, instructor in medicine3,
  3. Aaron S Kesselheim, professor of medicine3,
  4. Arash Mostaghimi, assistant professor of dermatology1
  1. 1Department of Dermatology, Brigham and Women’s Hospital, Harvard Medical School, Boston, MA 02115, USA
  2. 2Tufts University School of Medicine, Boston, MA, USA
  3. 3Program on Regulation, Therapeutics, and Law (PORTAL), Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital Boston, MA, USA
  1. Correspondence to: A Mostaghimi amostaghimi{at}bwh.harvard.edu (or @AMostaghimi on Twitter)
  • Accepted 29 April 2019

Abstract

Objectives To characterize the trends, drivers, and potential modifiers of increased spending by US Medicare beneficiaries on medicines deemed essential by the World Health Organization.

Design Retrospective cost analysis of Medicare Part D Prescriber Public Use File, detailing annual generic and brand name drug prescribing and spending from 2011 through 2015 by Medicare Part D participants who filled prescriptions for WHO essential medicines.

Setting US Medicare System.

Main outcome measures Total and per beneficiary Medicare spending, total and per beneficiary out-of-pocket patient spending, cumulative beneficiary count, claim count, and per unit drug cost. All spending measures were adjusted for inflation and reported in 2015 US dollars.

Results Medicare Part D expenditures on 265 WHO essential medicines between 2011 and 2015 was $87.2bn (£68.4bn; €76.5bn), with annual spending increasing from $11.9bn in 2011 to $25.8bn in 2015 (116%). Patients’ out-of-pocket spending for essential medicines over the same period was $12.1bn. Total annual out-of-pocket spending increased from $2.0bn to $2.9bn (47%), and annual per beneficiary out-of-pocket spending on these drugs increased from $20.42 to $21.17 (4%). Total prescription count increased from 376.1m to 498.9m (33%), and cumulative beneficiary count grew from 95.9m to 135.8m (42%). Of the essential medicines included in the study, the per unit cost of 133 (50%) agents increased faster than the average inflation rate during this period. Overall, approximately 58% of the increase in total spending during this period can be attributed to the introduction of novel agents.

Conclusions Spending associated with essential medicines grew substantially from 2011 to 2015, driven largely by the increased use of two expensive novel drugs used in treating hepatitis C. Approximately 22% of increased total spending during this period can be attributed to increases in per unit cost of existing drugs. These trends may limit patients’ access to essential drugs while also increasing healthcare system costs.

Footnotes

  • Contributors: DGL and AM were responsible for study concept and design, obtained funding, and did the statistical analysis. All authors were involved in acquisition, analysis, and interpretation of data; drafting of the manuscript; and critical revision of the manuscript for important intellectual content. ASK and AM supervised the study. The corresponding author attests that all listed authors meet authorship criteria and that no others meeting the criteria have been omitted. DGL and AM are the guarantors.

  • Funding: DGL is supported by the National Center for Advancing Translational Sciences, National Institutes of Health (award No TL1TR001062). ASK is supported by the Laura and John Arnold Foundation, as well as the Engelberg Foundation and the Harvard-MIT Center for Regulatory Science.

  • Competing interests: All authors have completed the ICMJE uniform disclosure form at www.icmje.org/coi_disclosure.pdf (available on request from the corresponding author) and declare: no support from any organization for the submitted work other than that described above; no financial relationships with any organizations that might have an interest in the submitted work in the previous three years; no other relationships or activities that could appear to have influenced the submitted work.

  • Ethical approval: This study was granted institutional review board exemption by the Partners Healthcare IRB.

  • Data sharing: No additional data available.

  • Transparency declaration: The manuscript’s guarantors affirm that the manuscript is an honest, accurate, and transparent account of the study being reported; that no important aspects of the study have been omitted; and that any discrepancies from the study as planned (and, if relevant, registered) have been explained.

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