Preferred Pharmacy Networks and Drug Costs

2021 ◽  
Vol 13 (3) ◽  
pp. 406-446
Author(s):  
Amanda Starc ◽  
Ashley Swanson
Keyword(s):  
Cost Sharing ◽  
Consumer Surplus ◽  
Medicare Part D ◽  
Pharmacy Cost ◽  
Costs And Benefits ◽  
Part D ◽  
Drug Prices ◽  
Prescription Drug Plans ◽  
Demand Models ◽  
Care Costs

Selective contracting is an increasingly popular tool for reducing health care costs, but any savings must be weighed against consumer surplus losses from restricted access. Recently, many prescription drug plans (PDPs) utilize preferred pharmacy networks to reduce drug prices. Our results suggest that Medicare Part D plans with preferred pharmacy networks pay lower retail drug prices, while subsidized enrollees’ insensitivity to preferred pharmacy cost-sharing discounts reduces these savings. We then estimate pharmacy demand models to quantify the costs and benefits of preferred pharmacy networks, finding that the average enrollee benefits from preferred pharmacy contracting due to reduced out-of-pocket (OOP) costs at preferred pharmacies. (JEL G22, H51, I13, I18, L65, L81)

Biosimilar formulary placement in Medicare Part D prescription drug plans: A case study of infliximab

2020 ◽  
Author(s):  
Mariana P Socal ◽  
Ijeamaka Ezebilo ◽  
Ge Bai ◽  
Gerard F Anderson
Keyword(s):  
Prescription Drug ◽  
Cost Sharing ◽  
Cost Savings ◽  
Medicare Part D ◽  
Medicare Part ◽  
Prior Authorization ◽  
Part D ◽  
Medicare Program ◽  
Prescription Drug Plans ◽  
Step Therapy

Abstract Purpose Biosimilars can generate competition and provide cost savings over reference biologics for the Medicare program and beneficiaries. The extent to which these benefits can be realized in the Medicare Part D program depends on how biosimilars and biologics are placed in the formulary. We conducted a study to examine Medicare formulary placement of the first biologic to have 2 biosimilars on the market—infliximab and its biosimilars infliximab-dyyb and infliximab-abda. Methods All standalone and Medicare Advantage (MA) prescription drug plans (PDPs) offered in Medicare Part D were examined between September 2016 (ie, at the end of the last quarter before the launch of the first infliximab biosimilar) and September 2018, at which time a second biosimilar had been on the market for about 14 months. When PDPs covered both the reference biologic and a biosimilar, we compared the cost-sharing tier and the frequency of prior authorization and step therapy requirements for each drug. Results Nearly all PDPs covered infliximab throughout the study period. By September 2018, 31.7% of MA plans and 14.9% of standalone PDPs were covering a biosimilar on the market. Nearly all plans that covered a biosimilar also covered the reference product. Most plans (98% of standalone PDPs and 89% of MA plans) had placed prior authorization restrictions on both the biologic and the biosimilar. All plans covering both products placed them in the same cost-sharing tier. No plan required step therapy for either product. Conclusion Formulary placement of infliximab biologic and biosimilars in Medicare Part D is not optimized to generate cost savings for the Medicare program and beneficiaries, whose cost sharing is often based on the drug’s list price. The Medicare program should provide incentives for PDPs to expand biosimilar coverage.

Access To Cancer Drugs In Medicare Part D: Formulary Placement And Beneficiary Cost Sharing In 2006

2006 ◽  
Vol 25 (5) ◽  
pp. 1240-1248 ◽  
Author(s):  
Jennifer Bowman ◽  
Amy Rousseau ◽  
David Silk ◽  
Catherine Harrison
Keyword(s):  
Cost Sharing ◽  
Medicare Part D ◽  
Medicare Part ◽  
Cancer Drugs ◽  
Part D

scholarly journals CB7-02: Medicare Part D Cost-sharing and Antipsychotic Drug Use in Two Medicare Advantage Systems

2012 ◽  
Vol 10 (3) ◽  
pp. 182-182
Author(s):  
V. Fung ◽  
M. Price ◽  
A. Busch ◽  
W. Dow ◽  
B. Fireman ◽  
...  
Keyword(s):  
Drug Use ◽  
Antipsychotic Drug ◽  
Cost Sharing ◽  
Medicare Part D ◽  
Medicare Part ◽  
Medicare Advantage ◽  
Part D

Medicare Part D Drug Prices: Let's Make a Deal

2007 ◽  
Vol 40 (5) ◽  
pp. 52
Author(s):  
JOEL B. FINKELSTEIN
Keyword(s):  
Medicare Part D ◽  
Medicare Part ◽  
Part D ◽  
Drug Prices

scholarly journals Regulation of Insurance with Adverse Selection and Switching Costs: Evidence from Medicare Part D

2016 ◽  
Vol 8 (3) ◽  
pp. 165-195 ◽  
Author(s):  
Maria Polyakova
Keyword(s):  
Adverse Selection ◽  
Switching Costs ◽  
Consumer Surplus ◽  
Medicare Part D ◽  
Medicare Part ◽  
Pricing Model ◽  
Part D ◽  
Contract Choice ◽  
Pricing Dynamics ◽  
Per Capita

I take advantage of regulatory and pricing dynamics in Medicare Part D to explore interactions among adverse selection, inertia, and regulation. I first document novel evidence of adverse selection and switching frictions within Part D using detailed administrative data. I then estimate a contract choice and pricing model that quantifies the importance of inertia for risk sorting. I find that in Part D switching costs help sustain an adversely-selected equilibrium. I also estimate that active decision making in the existing policy environment could lead to a substantial gain in annual consumer surplus of on average $400–$600 per capita—20 percent to 30 percent of average annual spending. (JEL D82, G22, H51, I13, I18)

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