Filling a new prescription these days can result in severe Rx-shock. Many seniors opt to pay an added premium for Part D coverage, which subsidizes the cost of medications for about 28 million Medicare beneficiaries. However, according to a new UCLA-led study, about 20% of these Part D beneficiaries have out-of-pocket costs that top $100 a month. As a result, some 10% are forced to use less medication than prescribed due to financial hardship. The study results were published online on August 23 in the Journal of General Internal Medicine.
The study authors note that because both the federal government and Medicare beneficiaries have to deal with the high cost of medication, there is a need for strategies to reduce those costs. They note that a simple solution could result in hundreds of dollars in savings per patient: Instead of brand-name drugs, substitute less expensive counterparts that have a similar therapeutic effect¬-––a practice sometimes known as therapeutic interchange or therapeutic substitution. While this strategy seems simple, and while about 90% of hospitals do it all the time, it is, oddly, not yet common practice in outpatient settings in the United States.
The cost of prescription medications continues to grow each year, for patients, health plans and government insurance programs such as Medicare, noted lead investigator, Dr. O. Kenrik Duru, an associate professor in the division of general internal medicine and health services research at the David Geffen School of Medicine at UCLA. He explained, “The increase in prescription drug costs is not sustainable over time, and we need to consider alternative approaches that are more cost-conscious. Many patients are not aware that there is often a less expensive alternative to many popular medications that may work slightly differently but have a very similar therapeutic effect. While the appropriateness of substituting less expensive medication varies in different clinical situations, patients need to know about potential options so they can have informed discussions with their doctors.”
The researchers used 2007 data to identify 50 common medications prescribed in a large Medicare Part D health plan. In addition, a group of practicing clinicians and pharmacists identified a subset of about 30 of these medications for which there was either a direct generic substitute that used the same chemical compound, or an acceptable and less expensive therapeutic substitute that used a different chemical compound with a very similar therapeutic effect. The researchers then compared the cost of the original medications to the substitutes and calculated the potential savings. This included savings for the patient, the health plan and, in some cases, for the government when it was subsidizing the cost.
The investigators found that 39% of Medicare patients receiving the low-income subsidy and 51% of patients not receiving the subsidy were eligible for a generic or therapeutic substitution. (The health plans and the government pay most of the medication costs for subsidy-eligible patients.) The investigators found that for each generic substitution among patients receiving a subsidy, the government would save an average of $156 per year. Each therapeutic substitution among subsidized patients would result in greater savings: The government would, on average, save $126 per year, and the health plan would save $305 per year. Patients not receiving the low-income subsidy would save $138 per year for each generic substitution. For each therapeutic substitution, each patients would save, on average, $113 per year, and the health plan would save $276 per year.
The researchers noted that not every substitution is appropriate for every patient, and they acknowledged that in some clinical scenarios, potential substitutions have already been tried unsuccessfully or may not be appropriate at all. For these reasons, they listed cost-savings as a per-substitution figure rather than estimating potential savings across the entire system. (The latter number would depend on exactly how many people switched to potential substitutes.)
Also, the researchers said, these numbers are from a single health plan at one point in time and cannot be generalized to other health plans. However, Dr. Duru noted, “The purpose of this research was to provide a general estimate of possible potential savings.”
Take home message:
The strategy embraced by this study could also benefit younger individuals whether or not they have a prescription plan that covers only a portion of the cost. It is also worthwhile to shop around at different pharmacies. This can often be done online or via a phone call. I recently filled a prescription for eye drops that cost $120 for a one-month supply at Rite-Aid. I found that the identical product (same pharmaceutical manufacturer) was available at Costco for $22.