Study: Cheapest Topical Steroid Substitution Can Save Nearly $67M in OOP Spending

Topical steroids typically prescribed are generic drugs, but the increase in the cost of generics means that out-of-pocket Medicare spending for topical steroids has risen. A new study found substituting the cheapest topical steroid could result in substantial savings.

Generic drugs of topical steroids are typically prescribed in dermatology; however, with the rising cost of generic drugs, out-of-pocket Medicare spending on these drugs has increased.

A study recently published in JAMA Dermatology assessed the Medicare patient out-of-pocket costs for topical steroids in order to determine the least expensive substitution to produce the potential savings. The researchers analyzed the Medicare Part D Prescriber Public Use File, from 2011 to 2015, to collect data of the drug utilization and costs of branded and generic topical steroids. Furthermore, the study was able to calculate the total Medicare and out-of-patient spending.

“We chose to focus on topical steroids because they are used to treat a broad range of dermatoses, are among the most commonly prescribed agents in dermatology, and often require a prescription, enabling us to capture drug utilization and expenditures via a prescription insurance database,” the authors explained.

Following the database analysis, the researchers found that Medicare Part D expenditures on topical steroids between 2011 and 2015 were $2.3 billion, while the patient’s out-of-pocket spending for topical steroids was $333.7 million. Over the specific period of time, total annual spending increased by 226.5% and out-of-pocket spending increased by 145.9%. However, 97.8% of the total spending was accounted for by generic medications.

“Active clinician support at the time of prescribing would need to account for a variety of factors, including market dynamics, geographical variation, and pharmaceutical coverage to determine the cheapest agent within a desired steroid class, and prompt physicians to prescribe this agent when they consider dispensing a more expensive agent from the same class,” the researchers noted.

In order to produce potential savings, the study found that with the substitution of the cheapest topical steroid in the corresponding potency class, the total healthcare and out-of-pocket savings would be $944.8 million and $66.6 million, respectively.

The researchers suggested that clinical decision support is necessary to produce savings through potentially providing patients with the most affordable generic topical steroid to treat their dermatological need.

“It is imperative that health policies emerge that regulate pharmaceutical company practices and improve transparency surrounding drug costs,” the authors concluded. “Until that time, interventions such as electronic medical record—based clinician support may allow clinicians to prescribe the most affordable topical steroids available on the market, ensuring efficacy while minimizing costs. Without these efforts, routine medications may become prohibitive in cost for our patients.”

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