Affordable Drug Choices More Limited in Medicare, Study Finds

The American Journal of Managed Care publishes a first-of-its-kind study comparing different types of health insurance plans and different levels of co-payment, to see how varieties of coverage affect access to therapeutic drug classes.


Affordable Drug Choices More Limited in Medicare, Study Finds

PLAINSBORO, N.J. — How much does your health coverage affect your access to affordable drugs? Quite a bit, it turns out, according to a study published this month in The American Journal of Managed Care.

The study, believed to be the first of its kind, has important implications as the American population ages, for it found that protein-tyrosine kinease inhibitors (P-TKIs), which treat cancers including chronic myeloid leukemia (CML), are less likely to be covered by Medicare plans than almost any other type of insurance, even though the typical CML patient is a man in his 60s.

Author Stephane A. Regnier, PhD, MBA, in “How Does Drug Coverage Vary by Insurance Type? Analysis of Drug Formularies in the United States,” used the Fingertip Formulary database, which accounts for at least 95% of covered US lives, taking a snapshot in May 2011. Dr. Regnier compared types of insurance plans and whether they covered on-patent drugs in different therapeutic areas at low or high co-pays. Unsurprisingly, Dr. Regnier found that public employee and union plans were the most generous, while Medicare plans showed a high degree of cost-sharing.

Among commercial plans, Dr. Regnier found that there were more on-patent drugs with a low co-pay in employer plans, union plans, and pharmacy benefit management companies, with “substantially fewer” on-patent drugs with a low co-pay in the different types of Medicare programs. Co-payments for Medicaid and public employee plans tended to vary by therapeutic class, or results were inconclusive.

Dr. Regnier attributed the poor coverage of P-TKIs in Medicare plans to cutthroat price competition, but this phenomenon did not appear to show up as significantly in other classes of drugs. “In other words,” he wrote, “when on-patent drugs were more scarce and expensive (such as P-TKIs), plans in competitive states limited the number of on-patent drugs with a low co-pay, possibly to reduce costs.”

Some of Dr. Regnier’s findings may have public health implications. He finds strong coverage of on-patient Tier 1 and Tier 2 drugs in 95 percent of state Medicaid plans; citing prior studies, he said this may suggest that Medicaid officials are trying to encourage low-income patients with chronic conditions to stick with medications and avoid higher hospitalization costs. By contrast, he wrote, “Medicare plan designs may be suboptimal because they rely heavily on cost-sharing for expensive chronic therapies, such as P-TKIs.”

About the Journal

The American Journal of Managed Care, now in its 20th year of publication, is the leading peer-reviewed journal dedicated to issues in managed care. In December 2013, AJMC launched The American Journal of Accountable Care, which publishes research and commentary devoted to understanding changes to the healthcare system due to the 2010 Affordable Care Act. AJMC’s news publications, the Evidence-Based series, bring together stakeholder views from payers, providers, policymakers and pharmaceutical leaders in the areas of oncology, diabetes management, respiratory care, and immunology and infectious disease.

CONTACT: Mary Caffrey (609) 716-7777 x 144