Published in:
01-01-2014
Potential Savings Associated with Drug Substitution in Medicare Part D: The Translating Research into Action for Diabetes (TRIAD) Study
Published in: Journal of General Internal Medicine | Issue 1/2014
Login to get accessABSTRACT
BACKGROUND
Drug substitution is a promising approach to reducing medication costs.
OBJECTIVE
To calculate the potential savings in a Medicare Part D plan from generic or therapeutic substitution for commonly prescribed drugs.
DESIGN
Cross-sectional, simulation analysis.
PARTICIPANTS
Low-income subsidy (LIS) beneficiaries (n = 145,056) and non low-income subsidy (non-LIS) beneficiaries (n = 1,040,030) enrolled in a large, national Part D health insurer in 2007 and eligible for a possible substitution.
MEASUREMENTS
Using administrative data from 2007, we identified claims filled for brand-name drugs for which a direct generic substitute was available. We also identified the 50 highest cost drugs separately for LIS and non-LIS beneficiaries, and reached consensus on which drugs had possible therapeutic substitutes (27 for LIS, 30 for non-LIS). For each possible substitution, we used average daily costs of the original and substitute drugs to calculate the potential out-of-pocket savings, health plan savings, and when applicable, savings for the government/LIS subsidy.
RESULTS
Overall, 39 % of LIS beneficiaries and 51 % of non-LIS beneficiaries were eligible for a generic and/or therapeutic substitution. Generic substitutions resulted in an average annual savings of $160 in the case of LIS beneficiaries and $127 in the case of non-LIS beneficiaries. Therapeutic substitutions resulted in an average annual savings of $452 in the case of LIS beneficiaries and $389 in the case of non-LIS beneficiaries.
CONCLUSIONS
Our findings indicate that drug substitution, particularly therapeutic substitution, could result in significant cost savings. There is a need for additional studies evaluating the acceptability of therapeutic substitution interventions within Medicare Part D.