Gary M. Owens, MD
http://www.ajmc.com/_media/_upload_image/ACE017_May14_RA-CE_Owens_Figure.pngThe Economic Impact of RA
While the clinical burden of rheumatoid arthritis (RA) is significant in and of itself, the patient and societal costs associated with this disorder are also substantial.1
Breaking down these outlays using cost-of-illness principles, a spectrum including direct, indirect, and intangible costs, can substantially impact management of RA. Direct costs associated with RA consist of the expenditures directly attributed to healthcare utilization. These expenditures include those for clinical consultation (primary and specialty care), biologic and imaging assessments, outpatient/office-based care, and inpatient care, which includes admissions for disease-related symptoms and/or surgery (such as joint replacement). Other direct costs include those incurred by emergency department visits, physical therapy, pharmaceutical treatments and related expenditures, and medical costs beyond the treatment of joint disease itself.1-3
The costs of such care may also include those related to nonmedical costs, such as out-of-pocket expenses incurred for caregivers or care that is not reimbursed on a regular basis.2
Indirect costs usually refer to loss of productivity, including paid productivity loss associated with employment, and loss of productivity outside the workplace, such as in the community or the home. These indirect costs may be classified in terms of productivity losses borne by the patient, the patient’s family, and the patient’s employer, as well societal costs (morbidity), and costs of lost productivity due to premature death caused by RA-related illness (mortality). Finally, intangible costs should also be considered, relating to the cost of patient suffering from pain or disability associated with RA along with diminished self-esteem and well-being. While such costs may be substantial in addition to the oftenmeasured direct and indirect costs, they are, unfortunately, rarely quantified, and lack the hard data needed for their actual burden to be assessed.2,4
An early major systematic review, published in 2000 and utilizing 4 computerized literature databases, was performed to assess costs associated with RA, as analyzed by 14 costof- illness studies.4
Costs were reported in 1996 dollars based upon the consumer price index for medical care. The actual costs calculated in the different studies included in the review varied across all cost categories. Overall, the analysis revealed that mean annual direct costs associated with RA averaged $5720 per patient per year. Mean costs for outpatient visits and inpatient hospital stays were $1855 and $4944, respectively. Indirect costs usually referred to the number of days absent from work annually, and these ranged from 2.7 to 30 days per year per employed patient. The mean annual indirect cost associated with RA was found to be $5822. The authors noted that by calculating mean cost as the main statistic published to date at that time, it was likely that the study overestimated the annual per-person costs of RA owing to a positively skewed distribution attributed to cost data. It is important to note that, for this analysis, inpatient costs were found to be the largest total annual medical costs associated with RA at that time, accounting for between 17% and 88% of total medical costs. Medication constituted between 8% and 24% of total costs, and physician visits accounted for 8% to 21% of total costs. It must be noted that this study was performed in 2000 and provides a historical perspective of the breakdown of costs associated with RA at that time, which may be compared with more current assessments.
Additional analyses of RA-associated costs have produced very wide ranges of cost estimations. A study published in 2004 estimated that direct medical costs ranged from $2298 to $13,549 per patient.5,6 More recent data have resulted in estimates of annual per patient direct medical costs of RA ranging from $2000 to $10,000, with estimates for indirect costs ranging from $1500 to $22,000.1,7,8
A large number of cost-of-illness studies have been performed in recent decades, and significant variability among these studies has been found. The main sources of discrepancies between the studies include sample characteristics (study size, RA characteristics such as severity and duration), the healthcare organization involved, and the methodology used to perform the cost calculations. While cost estimations have varied, it is well understood that the economic burden of RA has evolved significantly over the past decade, driven primarily by the launch of biologic therapies for treatment of the disorder and costs associated with the use of these medications rather than the higher inpatient costs identified as the primary cost driver in RA at the beginning of the century.2,4Specialty Medication Costs
The US Food and Drug Administration does not designate individual medications or classes of drugs as specialty related; instead, this designation is frequently defined internally by a health plan or pharmacy benefit management service. These designations can vary substantially among different health plans and organizations, but are usually associated with a cost cutoff.9
Specialty drugs are often designated as such by the condition they are designed to treat, and these agents have provided new therapeutic options for many chronic conditions.
Such pharmaceuticals have demonstrated great efficacy and promise; however, this effectiveness does not come without cost. Historically, these medications were developed to treat only rare conditions that affected a limited number of patients, and were considered a good value despite their expense because they made treatment possible for patients with difficult-to-treat disorders who otherwise had limited therapeutic options.10
In recent years specialty drugs have become the designated standard of care for many common chronic diseases, including RA.9,10
The use of these agents has increased more rapidly than the use of traditional therapies and, because of this, payers are more carefully scrutinizing their associated costs and evidence for their actual value in patient management.9
In 2011 it was estimated that spending on specialty drugs accounted for approximately 25% of the total prescription drug spending processed via the medical and pharmacy benefit.9
These specialty agents are expected to account for 50% of the total spending for prescription drugs by 2018.9,11
As this type of spending continues to grow at a rate faster than that associated with more traditional treatments, payers and policy makers must better comprehend the costs of these drugs along with their clinical benefits so they are better able to implement appropriate therapy decision making for patients with the chronic disorders these agents are designed to treat.9
The treatment landscape is complicated by the fact that comparatively little is known about the actual utilization of specialty drugs and related spending in diseases such as RA, for which use of such agents is frequent, especially when assessed in relation to an individual patient’s total healthcare costs. It is challenging to accurately assess the use of specialty drugs and member spending across pharmacy and medical benefit databases due to limited access to these data and differences in how specialty drugs are captured in medical and pharmacy benefits claims.9 One study that attempted to address the issue of health plan utilization and cost of specialty drugs utilized medical and pharmacy administrative claims data from a Midwest healthcare plan to assess prevalence and trends for selected chronic conditions and their associated specialty drug use.9
RA was one of the 4 separate study cohorts (along with multiple sclerosis, psoriasis, and inflammatory bowel disease), with data on 4398 individuals identified within the RA cohort. The actual prevalence of RA was the highest among the 4 conditions studied, calculated to be 4489 per million members. Integration of medical and pharmacy benefits claims data was used to obtain a comprehensive understanding of the costs associated with RA and its associated specialty drug costs.9
PDF is available on the last page.