Date of Award

5-2011

Document Type

Thesis

Degree Name

Master of Science (MS)

Program

Health Outcomes and Policy Research

Research Advisor

David K. Solomon, Pharm.D.

Committee

Richard Faris, M.S., Ph.D. James M. Hoffman, Pharm.D., M.S. Trevor McKibbin, Pharm.D., M.Sc. Robert Nolly, M.S. Junling Wang, Ph.D., M.S.

Keywords

Medicare Part D, Out-of- pocket costs, Drug tiers, Prior authorization, Oral oncologic therapies

Abstract

Background: There are few studies that examine patients' costs of oral oncology drugs from Medicare Part D plan providers. These drugs can impose a financial burden to beneficiaries, and, due to their cost, place beneficiaries in the coverage gap in a short period of time. In addition to examining costs, there is little published concerning the potential impact of drug utilization management techniques on access to these drugs in Medicare Part D plans. This study examined the roles of prior authorization, step-therapy, and placement of drugs in higher formulary tiers on patients' out-of-pocket costs, and access to therapy.

Methods: A cost analysis of pricing structure data for nine oral oncology drugs from the 48 Medicare Part D stand-alone plans in Tennessee in 2009. Out-of-pocket costs per drug on an annual basis, copayments per claim, monthly premiums, and deductibles as well as an analysis of the time to the coverage gap, and patient expenses beyond the catastrophic limit are examined. This analysis includes a summary of the changes to drug utilization management techniques to these drugs on the plans from 2008 to 2009 and examines their impact on members' out-of-pocket expenses.

Results: Of the one million eligible seniors in Tennessee, only about 43% were enrolled in a Medicare Part D plan in 2009. There were 48 plans offered in 2009 with a variety of deductibles, premiums, and cost-sharing strategies. For the drugs in the study, imatinib, lenalidomide, sorafenib, erlotinib, dasatinib, sunitinib, vorinostat, nilotinib, and lapatinib, the annual out-of-pocket costs for each drug varied from $0 to a maximum of $1,133, based on plan design. Bivariate regression analysis showed that monthly premiums, deductibles, and cost-sharing are all precise predictors of out-of-pocket expenses (p <.001) and demonstrated to what extent each of these parameters are important to out-of-pocket expenses. For every $1 increase in monthly premiums, out-of-pocket costs increased by $14.27 for imatinib and $14.29 for the remainder of the study drugs. A cost sharing increase of 1% is associated with a $41.45 increase in out-of-pocket expenses for imatinib. That same 1% increase in cost sharing resulted in a $41.16 increase in out-of-pocket expenses for the remainder of the study drugs. Annual deductibles provide cost savings to beneficiaries; for every dollar increase there is a significant reduction in annual out-of-pocket expenses of $1.45. Drug utilization management tools such as prior authorization resulted in cost savings to members for all study drugs except for vorinostat and lapatinib; however, the results were not statistically significant.

Conclusions: There is little doubt that for seniors lacking prescription drug benefits Medicare Part D is a substantial advantage. Drug utilization management techniques such as step therapy and prior authorization may actually save patients out-of-pocket expenses, but monthly premiums, deductibles, and cost sharing add a significant financial burden. A patients' costs for oral oncology drugs can vary widely among Part D plans, and all elements of plan design should be considered prior to choosing a Part D plan. Access to oral oncology drugs may save both Medicare and beneficiaries costs, but seniors do not always pick the plan that would save them the most money. Streamlining Medicare Part D to include fewer plans, fewer options within plan design, and making gap coverage available would lower beneficiaries' out-of-pocket costs.

DOI

10.21007/etd.cghs.2011.0081

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