Resources on Pharmaceutical Costs and Access

1/10/2018

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The following is a selected list of recent government, academic, industry and consumer studies, analyses and related publications, designed to assist state-based research. Most are available on the web, with links included. For more comprehensive sources and additional studies, see the source lists and links below. The final "archive" section below includes earlier history of interest to state policymakers.

NCSL Pharmaceuticals Resources and Overview, 2018 - a separate web-based list and Table of Contents of 45+ NCSL research, articles and presentations, plus NCSL-related news.

State and Federal Activities and Reports -

Note and Disclaimer: NCSL provides links to third-party web sites for information purposes only.  Providing these links does not indicate NCSL's support or endorsement of any third party site material. Use of brand or manufacturer names also are informational only.  NCSL is not responsible for the opinions or facts on such sites.
  • Medicare Part D Premiums continue to decline in 2019 - CMS Press Release, July 31, 2018
  • CMS: Innovative treatments call for innovative payment models and arrangements. - The U.S. Food and Drug Administration approved  a first-ever new brand drug using gene therapy for certain pediatric and young adult patients with so-called "CAR T-cell therapy" B-cell precursor acute lymphoblastic leukemia. The "Centers for Medicare & Medicaid Services (CMS) is continuing to explore the development of payment models and arrangements for new and potentially life-saving treatments. CMS is working actively with all stakeholders, including state officials, on innovative payment arrangements.”  CMS Release posted 8/30/17.  
  • The Importance of Relative Prices in Health Care Spending. - A discussion on the substantial gap in health care spending between the United States and other developed countries based on the differences in prices, not use of health care services. by Austin B. Frakt, PhD1Michael E. Chernew, PhD, JAMA. Published online 14/18.
  • Use of Common Heart Drugs Dropped After Price Hike. - A Cleveland Clinic study "disproves suggestions that gouging price hikes do not reduce access and utilization of medications". From 2012 to 2015:
     ♦  Ntroprusside prices increased 30-fold from $27.46 to $880.88,
     ♦  Ioproterenol prices increased nearly 70-fold from $26.20 to $1,790.11. 
    These medications are used only in the hospital, with no external patient demand and no direct-to-consumer advertising. Researchers examined the effect of the price increases on physician prescribing behavior. The study by Cleveland Clinic was reported in the 8/10/17 issue of The New England Journal of Medicine ; Health Leaders Media report

Health policy briefs on issues shaping the prescription drug market by Health Affairs  - "A series of peer-reviewed health policy briefs on key issues currently shaping the prescription drug market. This set of briefs looks at key factors that explain the many issues determining consumer out-of-pocket spending and contribute to the confusion between list prices and net prices." Topics include:
The 340B Drug Discount Program

The 340B drug discount program mandates the sale of outpatient prescription drugs to safety-net providers at reduced rates. 9/2017. 

Patient Financial Support

Manufacturer-sponsored financial support helps patients afford medicines but may thwart payers’ efforts to use preferred drugs. 9/2017 - Read and Save Printable PDF

Formularies

Formularies are tools used by purchasers to limit drug coverage based on favorable clinical performance and relative costs. 9/2017 - Read and Save Printable PDF

Pharmacy Benefit Managers

On behalf of payers, pharmacy benefit managers negotiate rebates from drug makers in exchange for preferred formulary placement. 9/2017 - Read and Save Printable PDF

Medicaid Best Price

The Medicaid best price policy requires drug manufacturers to give Medicaid programs the best price among nearly all purchasers.  8/2017 - Read and Save Printable PDF

Expedited Approval Pathways

 For drugs of particular clinical importance, the Food and Drug Administration offers several expedited development and approval pathways. 7/2017 - Read and Save Printable PDF

Pricing Orphan Drugs

A 1983 law created incentives to develop drugs to treat rare diseases that might otherwise not justify commercial investment. 7/2017 - Read and Save Printable PDF

Biosimilars

Follow-on products to innovative brand-name biologic medicines may lower overall drug spending by creating price competition. 7/2017Read and Save Printable PDF

Patent Settlements

The timing of a generic drug's market entry may be determined by "pay for delay" patent settlements between drug companies. 7/2017 - Read and Save Printable PDF

Medicare Part D 

Medicare Part D covers retail prescription drugs for Medicare beneficiaries through unique, stand-alone drug insurance plans.  8/2017 - Read and Save Printable PDF

Medicare Part B 

The Medicare Part B "buy and bill" payment structure for physician-administered drugs also influences private-sector prices. 8/2017 - Read and Save Printable PDF

Veterans Health Administration 

The Veterans Health Administration can often obtain very favorable prices for drugs and may be a model for Medicare and others.  8/2017 - Read and Save Printable PDF

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  • UCSF Soaring Drug Prices: Presentation to the California Legislature- FULL PRESENTATION - Slides with audio/video from Lisa Gill, Best Buy Drug Program, Consumer Reports; Professor Robin Feldman, Director of the Institute for Innovation Law at University of California Hastings -11/9/17
  • May Your Drug Price Be Ever Green - View or download Full report, Revised 6/18 (Highlights:)
    • Rather than creating new medicines, pharmaceutical companies are recycling and repurposing old onesOn average, 78% of the drugs associated with new patents were not new drugs coming on the market, but existing drugs. 
    • Adding new patents and exclusivities to extend the protection cliff is particularly pronounced among blockbuster drugs. Of the roughly 100 best-selling drugs, almost 80% extended their protection at least once, with 50% extending the protection cliff more than once.
  • Lawmakers in three states have approved legislation intended to lower the prices consumers pay for prescription drugs, mainly by requiring more disclosure of pricing information from pharmacy benefit managers (PBMs) and drug manufacturers. Reprinted from Drug Benefit News, via AIS Health, 6/23/17
  • Absent Federal Action, States Take The Lead On Curbing Drug CostsBy Washington Post and KHN, September 29, 2017- As Congress stalls on what voters say is a top health concern — high pharmaceutical costs — states increasingly are tackling the issue. Despite often-fierce industry opposition, a variety of bills are working their way through state governments. California, Nevada and New York are among those joining Maryland in passing legislation meant to undercut skyrocketing drug prices. Lawmakers in Maryland are focusing on generic and off-patent drugs and penalizing drugmakers for price hikes. Maryland, though, is the first to. Its law passed May 26, 2016 without the governor’s signature
  • State Medicaid Alternative Reimbursement and Purchasing Test for High-cost Drugs (SMART-D)  "This report analyzes the options available to state Medicaid agencies to purchase and pay for high-cost specialty drugs under current federal law. Drug prices are set by manufacturers, and Medicaid price and coverage regulation is most clearly within the domain of federal policy and legislation, so this report cannot offer a quick solution to high drug launch prices. Rather, in this first phase of SMART-D, the Center for Evidence-based Policy has sought to identify tools and techniques that states can use under current law to enable patient access to needed drugs while being an effective steward of scarce public dollars." [View full summary report] Published by the Center for Evidence-based Policy, 9/16. 
  • SMART-D, the State Medicaid Alternative Reimbursement and Purchasing Test for High-Cost Drugs. SMART-D, part of a series of grants from the Laura and John Arnold Foundation in Texas, addresses the rising cost of pharmaceutical drugs. The project aims to help develop a better menu of options for states to consider in purchasing high cost drugs in Medicaid. This 2016 article by Milbank Memorial Fund provides information about phase one of the project. Published 6/24/2016.
  • What’s Driving Increased Pharmaceutical Spending? A 2016 report focused on specialty drugs and how "policymakers need new solutions to manage drug costs and ensure patient access." By The Pew Charitable Trusts, 5/26/16.  
  • Health care spending is up. According to published data from the Health Care Cost Institute, health care spending grew by 4.5% from 2015 to 2016. Utilization was steady or, in some cases, declined during the same period. According to HCCI’s analysis, which is limited to employer-sponsored coverage, the increase in spending was driven by steep increases in prices. Spending on prescription drugs is up 27% between 2012 and 2016, driven by a roughly 25% jump in prices. Reproduced from HCCI 2016 Health Care Cost And Utilization Report. Published1/18.
  • Why a New Study on Drug Costs Misses the Mark. Rebuttal to the HCCI report, published by BIO Inc.., 1/18. 
  • The High Cost of Prescription Drugs in the United States: Origins and Prospects for Reform full article in JAMA, 8/23/16
  • Gaining Coverage Through Medicaid or Private Insurance Increased Prescription Use and Lowered Out-Of-Pocket Spending.  Uninsured people who gained private coverage filled, on average, 28% more prescriptions and had 29% less out-of-pocket spending per prescription in 2014 compared to 2013. Those who gained Medicaid coverage had larger increases in fill rates (79%) and reductions in out-of-pocket spending per prescription (58%)." Diabetes shows the largest increased prescribing of all categories. [Read abstract or request text] A Health Affairs study, 8/18/16.
  • Pharma takes an average 35% hit on list price in Medicare Part D:  Drugmakers argue that pricing stats are misleading because they don’t account for rebates; like sticker prices on automobiles, they yield far less because of customer discounts. Now, in a study funded by PhRMA, some top pharma number-crunchers find Medicare Part D pays an average of 35% less than list price on many commonly used meds. Article by FiercePharma, 10/12/16. 
  • "The EpiPen, a Case Study in Health System Dysfunction" Article as The Upshot; New York Times, 8/25/16 
  • Report Outlines Policies to Promote Access to Affordable Prescription DrugsProvides a series of recommendations to assist regulators, lawmakers, and the National Association of Insurance Commissioners (NAIC) on ways to promote access, affordability, nondiscrimination, transparency, and meaningful oversight of prescription drug coverage. 8/26/16
  • Use the WHO’s  “essential medicines” as guides for drug pricing - read article in Boston Globe's STAT. Updated every two years, the current list4 includes medications separated by condition and indication for use. Updated 8/18. 
  • Allergan CEO swears off big price hikes in manifesto on pharma's 'social contract' - article posted in FiercePharma, 9/6/16 
  • Generic drug alternatives crucial to competition, cost control, JAMA- "Among 417 unique therapeutics, 210 were eligible for generic competition, JAMA found.” Read in Healthcare Financenews.com Published 7/20/16
  • Expenditures for Commonly Treated Conditions among Adults Age 18 and Older in the U.S. Civilian Noninstitutionalized Population. Read full report, by MEPS, 5/16.     
  • CMS delays enforcement of Medicaid drug rule, "caves to drugmakers' plea" -  "Drug manufacturers are breathing a sigh of relief after the CMS announced it will delay enforcement of a rule that changes the way state Medicaid agencies reimburse pharmacies for prescription drugs." The CMS pushed back the enforcement date to July 2016. Pharmaceutical companies wanted a delay until October. Modern Healthcare, 4/5/16.
  •  California: Drug makers spend big to fight California price control referendum. The industry is expected to pour $100 million into an effort to squash the November ballot initiative. The initiative would require the state to pay no more for prescription drugs than the U.S. Department of Veterans Affairs — one of the few federal agencies allowed to negotiate drug prices. Read more, from Politico, 4/25/16
  • Hospital Software Often Doesn't Flag Unsafe Drug Prescriptions, Report Finds - "Medical errors are estimated to be the third-highest cause of death in the country. Experts and patient safety advocates are trying to change that. But at least one of the tools that’s been considered a fix isn’t yet working as well as it should, suggests a report released Thursday." Article by Kaiser Health News staff, 4/7/16.
  • GAO report identifies FDA for lax oversight on speedily approved drugs - "A new study from the Government Accountability Office found ...problems with the FDA's safety tracking, including incomplete, outdated and inaccurate data. Beyond that, more than half of the required submissions from pharma companies between March 2008 and September 2013--related to 1,400 post-market studies--were either delayed or overdue." Posted by FiercePharma, 1/19/16.
    > Read the GAO reportFDA Expedites Many Applications, But Data for Post-approval Oversight Need Improvement. 12/15.
  • Strategies Used by Adults to Reduce Their Prescription Drug Costs: United States, 2013To save money, 7.8% of U.S. adults did not take their medication as prescribed, 15.1% asked a doctor for a lower-cost medication, 1.6% bought prescription drugs from another country, and 4.2% used alternative therapies. Published by Centers for Disease Control and Prevention, National Center for Health Statistics, 1/15
  • Federal Agency Releases Detailed Data on Prescription Drug Spending, by Product & Provider - The federal government released detailed data on an HHS website on nearly 1.4 billion prescriptions dispensed to seniors and disabled people in the Medicare program in 2013. News analysis by ProPublica, 4/15
  • The Centers for Medicare & Medicaid Services (CMS) released data that details information on the prescription drugs that individual physicians and other health care providers prescribed in 2013 under the Medicare Part D Prescription Drug Program. Approximately 68% of all Medicare beneficiaries were enrolled in the Part D program, 36 million people. The New York Times report and top-10 table. 4/30/15
  • CMS makes drug & device company payments public.  Data designed to promote transparency into the financial relationships between health care industry, doctors and teaching hospitals. Released 9/30/14
  • Prescription Drugs as Essential Health Benefits- In early 2015, the U.S. Department of Health and Human Services revised the Essential Health Benefits (EHB) standard, including significant changes to the EHB prescription drug requirements. The National Health Law Program published a 5-part series providing a comprehensive analysis of the new (EHB) prescription drug requirements. Published 7/15. 
National Health Expenditures: Prescription Drugs
  • What’s Driving Increased Pharmaceutical Spending? A new report focused on specialty drugs and how "policymakers need new solutions to manage drug costs and ensure patient access." By The Pew Charitable Trusts, 5/26/16.  
  • National Health Expenditures: Prescription Drugs- Projected 2016-2026; released by HHS/CMS Office of the Actuary, 8/18
Reports in the Media, 2015-2016

Medicaid Drugs & Pricing -- Includes Specialty Drugs

  • Cost Sharing Out-of-Pocket Drug Costs.  CMS describes the process as follows: " States can impose copayments, coinsurance, deductibles, and other similar charges on most Medicaid-covered benefits, both inpatient and outpatient services, and the amounts that can be charged vary with income. All out of pocket charges are based on the individual state’s payment for that service.” See more information in Out of Pocket Costs
  • Medicaid Prescription Reimbursement Information by State - March 2018 Updated by CMS every 3 months.  
  • HHS Sets 2018 Health Plan OOP Maximums- The 2018 limits will be $7,350 for self-only coverage (up from the 2017 cap of $7,150) and $14,700 for family/other than self-only coverage (up from $14,300) Read full article – 12/22/16
  • What Drives Spending and Utilization on Medicaid Drug Benefits in States? Key findings include: Specialty drugs account for just two percent of drug utilization in 2012, but they comprise 28% of drug spending. This share increased from 2010 when they totaled 24% of drug spending before rebates. The specialty drug share of total drug spending varies at the state level. Brand-name drugs account for a disproportionate amount of drug spending. In 2012, they accounted for 20% of Medicaid drug prescriptions but 76% of spending. - [Executive Summary | Full Text - PDF]  Authors: Brian Bruen and Katherine Young. Published by Kaiser Family Foundation, 12/10/14

Medicare Prescription Drug law- Analyses and Commentary:

State and General Pharmaceutical Reports:

Private Patient Assistance Programs & Free Pharmaceuticals

  • Benefits Checkup helps connect people ages 55 and over with benefits. A service of the National Council on Aging.
  • Partnership for Prescription Assistance (PPARx): Partnership connects pharmaceutical companies, doctors, and advocacy groups to help low-income and uninsured individuals access free or discount medications.
  • Patient Assistance Now by Novartis - This service links to Novartis products at no charge or at a discount and includes related PAP features and consumer information.
  • RxAssist is a web-based searchable database, providing information on patient assistance programs and practical tools for patients and healthcare professionals.
  • Rx Outreach- The Nonprofit Pharmacy is committed to provide qualified individuals with robust prescription drug coverage for less. People may take advantage of the program even if they receive medicines through another discount program. The program has annual income eligibility requirements.  
  • RxHope.com is an online clearinghouse of no-cost and low-cost prescription drugs to support low income US residents with free or lost cost prescriptions.
  • "AZ&Me" launched by manufacturer AstraZeneca in 2006, as a user-friendly patient assistance program. Eligibility requirements apply with a current prescription for an AstraZeneca brand product and some others. Two programs available: AZ&Me Prescription Savings program for people without insurance or AZ&Me for people with Medicare Part D

Privately run state-based programs hosted by:

  • MedBank Foundation of Georgia is a non-profit volunteer organization formed in 1992 to assist the uninsured in obtaining prescription medications free-of-charge from pharmaceutical companies. The organization works with eligible citizens who reside in Southeastern and Central Georgia counties.
    • Medbank of Maryland, funded in part with state funds authorized beginning in 2001 but lost funding in July 2009.
  • Prescription Connection for North Dakota. The program is the result of state legislation passed in 2003, which connects low-income individuals with discount prescription direct from manufacturers.
  • The Virginia Rx Partnership is a public/private partnership which exists to provide free prescription medications for Virginia's eligible uninsured. “In Fiscal Year 2017, Rx Partnership helped 8,622 uninsured Virginians receive 49,122 prescriptions with a retail value of $26 million.” Previously the VA Health Care Foundation ran a free program for more than five years.
  • NeedyMeds a nationwide non-profit service that helps identify medical cost assistance programs.

Discount Card Programs - Public

Various states authorized programs that offer a discount only (no subsidy) for eligible or enrolled residents; some of these states have a separate subsidy program.  Descriptions and the current status of these programs are available on the NCSL's State Pharmaceutical Assistance Programs web page.

Discount Card Programs - Organizations / Pharmaceutical Manufactures / Other

There are several private-sector plans that offer to provide eligible individuals with discounts on some or all prescription drugs. Although these plans are not established or usually regulated by state law, the following information is provided as examples for general and comparative purposes. The claims listed by these programs have not been verified and are subject to change.

  • UNA Rx Cards: Many states have free prescription drug cards available to all state residents. The United Networks or America (UNA) manages the RX program providing uninsured and underinsured members with access to prescription discounts. These are not government sponsored or affiliated programs.
  • Georgia’s Rx Outreach: Rx Outreach is a Patient Assistance Program developed by Express Scripts Specialty Distribution Services, Inc.. The program provides qualified low-income individuals and families access to medications in 45 therapeutic categories. As of 2017, it is available to anyone with an income under 300% of the Federal Poverty Level and provides generic drugs for many chronic conditions. It is "affordable," with a fee of $20 for a 6 month supply of more than 120 medication strengths. The application form is featured on the program page through the GA Department of Community Health.
  • Merck: The Merck Prescription Discount Program started in 2005. It provides those without prescription drug or health insurance with medicine and vaccines for free. Individuals must meet eligibility requirements; one application may provide up to a year of free medication. For more information, please click: https://www.merckhelps.com/Programs.aspx
  • AARP Prescription Savings Service is sponsored by the not-for-profit senior organization, AARP. It features a discount card that is free but only AARP members. Participants save an average of 61% on FDA-approved prescriptions not covered by their current insurance. The program is administered by OptumRx.
  • OPTIMIZERx offers special savings & free trial programs to help you better afford your prescriptions and over-the-counter medicines, beginning in late 2006.  It is described as "simple and free", requiring no additional enrollment into any insurance or pharmacy program.  Registration required for offers.
  • National Cooperative Rx: The WisconsinRX, also known as the Wisconsin Prescription Drug Purchasing Coalition, was a not-for-profit coalition of employer groups, providing employee discounts, full transparency in pricing and an emphasis on evidence-based research.  In 2006, it expanded to include National CooperativeRx, with large partners in Alaska and Minnesota and elsewhere. Due to its purchasing power, it provides members with discounts and rebates.

Additional Pharmaceutical Facts, Opinions and Advocacy

  • 2018 Preferred Medication List- This Walgreens PDL provides one example of a commercial use of PDLs; (Its inclusion here is illustrative only; and does not imply NCSL endorsement or opposition).  Effective 2/21/18.
  • Pharmaceutical Research and Manufacturers of America (PhRMA): The industry trade association maintains numerous online documents and releases about Rx policies and laws. (Free access, requires login) 2018
  • Prescription Access Litigation project: As part of Community Catalyst, PAL was created in 2001 to make prescription drugs more affordable for consumers through class action litigation and public education.  PAL has a diverse coalition of over 130 organizations and consumer class action attorneys.
  • 340B Health: (Formerly Public Hospital Pharmacy Coalition) an organization of more than 1,300 public and private non-profit hospitals and health systems throughout the U.S. that participate in the Public Health Service 340B drug discount program.
  • ADAP Advocacy Association: Works to enhance AIDS Drug Assistance Programs and seeks the support of advocates, community, health care, government, patients, pharmaceutical companies and other stakeholders to improve access to care for persons living with HIV/AIDS.
  • NJ Prescription Drug Retail Price Registry: helps consumers compare the retail prices charged by many pharmacies for the 150 most-frequently prescribed prescription drugs.
  • Prescription Drugs: Overview of Approaches to Control Prescription Drug Spending in Federal Programs: report by US Government Accountability Office, 6/24/09.