State Health Lawmakers' Digest: Prescription Drug Pricing (Vol. 2, No. 3), In the Abstract

IN THE ABSTRACT

Prescription Drug Trends: A Chartbook Update

STUDY AND RESULTS: The chartbook, released in November 2001, provides information about the recent trends in prescription drug coverage, expenditures and prices, utilization, prescription drug promotion, and the pharmaceutical industry.

WHAT'S IMPORTANT: The percent of non-elderly population with prescription drug coverage is unlikely to have changed dramatically since 1996, since the percentage of uninsured people remains similar and the vast majority of employer-provided health insurance plans continue to include drug coverage. Also, overall health care expenditures for prescription drugs continue to rise more quickly than spending for hospital care and physician and clinical services. The average prescription drug price continues to increase. The overall average retail prescription price was $45.79 in 2000, more than double the average price in 1990 ($22.06).

FIND THIS STUDY: Prescription Drug Trends: A Chartbook Update, by The Henry J. Kaiser Family Foundation (November 2001), http://www.kff.org

Source: Prescription Drug Trends: A Chartbook Update, by the Henry J. Kaiser Family Foundation (November 2001).

COVERAGE, MARKETING AND PAYMENT

The Price of Progress: Prescription Drugs in the Health Care Market

STUDY AND RESULTS: The shift in consumption from traditional medical services-such as hospital care-to pharmaceuticals is explored in this article. Pharmaceuticals are broken into six groups, depending on whether savings occur, when they occur (short- or long-term) and to whom they accrue (physicians, hospitals or employers). The article calls for more investigation of the cost-savings of specific drugs so side-by-side cost-effectiveness comparisons can be made. The current, poorly-designed insurance system fails to maximize the potential of pharmaceuticals to lower overall spending and improve health outcomes. For example, annual insurance contracts and the high year-to-year member turnover give insurers little incentive to incur short-term cost increases to achieve long-term savings. The disjoined relationship between physicians and hospitals is also to blame: physicians often are asked to incur the cost of higher patient drug utilization while hospitals see the savings.

WHAT'S IMPORTANT: Some, but not all, pharmaceuticals can yield overall health care savings. More information is needed to quantify and compare these savings and maximize health improvement outcomes.

FIND THIS STUDY: J.D. Kleinke. Health Affairs 20, no. 3 (September/October 2001), 43-60.

Who Bears the Burden of Medicaid Drug Copayment Policies?

STUDY AND RESULTS: Researchers used Medicare survey data to examine at the drug expenditure patterns of Medicaid beneficiaries in 38 states and the District of Columbia. The authors found that Medicaid recipients in states with copayments filled five fewer prescriptions annually than their counterparts in noncopayment states. Controlling for other factors that may account for this difference, Medicaid copayments were found to reduce the number of prescriptions by 15.5 percent. Furthermore, it was found that this discrepancy is most severe among Medicaid recipients in fair or poor health. Medicaid recipients who are in very good or excellent health in copay and noncopayment states had nearly identical prescription drug usage, but people in copayment states in fair health filled 40 percent fewer prescriptions that their counterparts in noncopayment states; people in poor health filled 27 percent fewer prescriptions. The data also indicate that pharmacies in states with copayments fail to collect copayments in one-third of the cases.

WHAT'S IMPORTANT: Medicaid copayments are nominal (between $.50 and $3), but even this low amount appears to deter people who are in fair or poor health from filling prescriptions.

CAVEAT: This data is for people who are dually eligible for Medicare and Medicaid so it does not include most of the women and children who make up a large portion of the Medicaid population. That may not have a strong effect on the findings, though, since this younger, healthier population is mostly in Medicaid managed care and therefore not subject to copayments.

FIND THIS STUDY: Bruce Stuart and Christopher Zacker. Health Affairs 18, no. 2 (March/April 1999), 201-212.

Source: Health Affairs. 18, no. 2 (January/February 2002), 174.

Prescription Drug Coverage, Spending, Utilization, and Prices

STUDY AND RESULTS: This study investigates prescription drugs in response to a presidential request. The study investigated the following: price differences for most commonly used drugs for people with and without coverage; drug spending by people of various ages, as a percentage of income and of total health spending; and trends in drug expenditures by people of different ages, as a percentage of income and of total health spending.

FINDINGS: This study revealed suggestive relationships between demographic factors, insurance status, and prescription drug use; however, it does not examine the interrelationships among these factors.

FIND THIS STUDY: Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices, (April 2000) Department of Health and Human Services, http://aspe.hhs.gov/health/reports/drugstudy/exec.htm

Understanding the Effects of Direct-to-Consumer Prescription Drug Advertising

STUDY AND RESULTS: This study focused on two aspects of direct-to-consumer advertising (DTC). First, it documented the public's response to the prescription drug advertisements they have seen in the past. Second, the study used new survey technology to present a random representative sample of the public reaction to a particular prescription drug ad, following up with questions about that ad.

FINDINGS: The study found that DTC does prompt many people-especially the elderly and those in poor health-to talk to their doctors about a medicine they have seen advertised. The amount the public was actually educated about health problems or treatments were minimal and seem to depend for the most part on prior knowledge about the condition or medicine. Although the ads successfully communicated names and basic information about the medicine, there were mixed results on the success of communicating potential side effects and how to obtain more information about the medicines.

FIND THIS STUDY: Understanding the Effects of Direct-to-Consumer Prescription Drug Advertising, by The Henry J. Kaiser Family Foundation (November 2001) http://www.kff.org

STATE ASSISTANCE PROGRAMS

State Pharmacy Assistance Programs 2001: An Array of Approaches

STUDY AND RESULTS: This issue brief focuses on background information for the various approaches being used in states with state pharmacy assistance programs. The study provides a context for examining these programs and compares and contrasts their main features, while also analyzing their effects and limitations. The analysis for this study is limited to programs that were passed into law on or before June 1, 2001.

WHAT'S IMPORTANT: With the lack of federal action to create a Medicare prescription drug benefit, many states have implemented or are currently developing programs to help older and disabled residents pay for prescription drugs. These programs are quite diverse. However, they each are designed to reduce the burden of prescription drug costs for a selected group of the population. This study explores and analyzes these diverse programs.

FIND THIS STUDY: State Pharmacy Assistance Programs 2001: An Array of Approaches, by AARP Public Policy Institute (July 2001), http://www.research.aarp.org

Pharmaceutical Benefits under State Medical Assistance Programs: 2000 Edition

STUDY AND RESULTS: This 600-page report is updated yearly by the National Pharmaceutical Council. It is a compilation of an annual NPC survey of state Medicaid program administrators, pharmacy consultants and statistics from the annual CMS 2082 report.

This extensive survey provides valuable information on:

· Trends in Medicaid spending by states;

· Information about Medicaid managed care enrollment;

· Demographic statistics for 50 states and the District of Columbia;

· List of Medicaid-certified facilities in each state;

· Medicaid pharmacy program characteristics, including estimates of total payments and recipients, drug payments and recipients, drug benefit design, pharmacy payment and patient cost-sharing;

· Profiles of 20 states' coverage for elderly prescription drug programs;

· Detailed description of states' pharmacy programs;

· Helpful appendix with updated state contacts, CMS regional offices, etc.;

WHAT'S IMPORTANT: Section four on pharmacy program characteristics may be particularly useful. It consists of various listings of state participation in drug utilization reviews (DUR), prior authorization, drug rebate trends and patient cost sharing.

FIND THIS STUDY: Pharmaceutical Benefits under State Medical Assistance Programs: 2000 Edition, by the National Pharmaceutical Council, may be ordered from NPC by calling (703) 620-6390 or it can be downloaded at http://www.npcnow.org/resourcesproducts/productlist_date.asp#

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