Journal of General Internal Medicine

, Volume 29, Issue 1, pp 230–236

Potential Savings Associated with Drug Substitution in Medicare Part D: The Translating Research into Action for Diabetes (TRIAD) Study

  • O. Kenrik Duru
  • Susan L. Ettner
  • Norman Turk
  • Carol M. Mangione
  • Arleen F. Brown
  • Jeffery Fu
  • Leslie Simien
  • Chien-Wen Tseng
Article

ABSTRACT

BACKGROUND

Drug substitution is a promising approach to reducing medication costs.

OBJECTIVE

To calculate the potential savings in a Medicare Part D plan from generic or therapeutic substitution for commonly prescribed drugs.

DESIGN

Cross-sectional, simulation analysis.

PARTICIPANTS

Low-income subsidy (LIS) beneficiaries (n = 145,056) and non low-income subsidy (non-LIS) beneficiaries (n = 1,040,030) enrolled in a large, national Part D health insurer in 2007 and eligible for a possible substitution.

MEASUREMENTS

Using administrative data from 2007, we identified claims filled for brand-name drugs for which a direct generic substitute was available. We also identified the 50 highest cost drugs separately for LIS and non-LIS beneficiaries, and reached consensus on which drugs had possible therapeutic substitutes (27 for LIS, 30 for non-LIS). For each possible substitution, we used average daily costs of the original and substitute drugs to calculate the potential out-of-pocket savings, health plan savings, and when applicable, savings for the government/LIS subsidy.

RESULTS

Overall, 39 % of LIS beneficiaries and 51 % of non-LIS beneficiaries were eligible for a generic and/or therapeutic substitution. Generic substitutions resulted in an average annual savings of $160 in the case of LIS beneficiaries and $127 in the case of non-LIS beneficiaries. Therapeutic substitutions resulted in an average annual savings of $452 in the case of LIS beneficiaries and $389 in the case of non-LIS beneficiaries.

CONCLUSIONS

Our findings indicate that drug substitution, particularly therapeutic substitution, could result in significant cost savings. There is a need for additional studies evaluating the acceptability of therapeutic substitution interventions within Medicare Part D.

KEY WORDS

pharmacoeconomics Medicare health care policy 

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Copyright information

© Society of General Internal Medicine 2013

Authors and Affiliations

  • O. Kenrik Duru
    • 1
  • Susan L. Ettner
    • 1
    • 4
  • Norman Turk
    • 1
  • Carol M. Mangione
    • 1
    • 4
  • Arleen F. Brown
    • 1
  • Jeffery Fu
    • 1
  • Leslie Simien
    • 1
  • Chien-Wen Tseng
    • 2
    • 3
  1. 1.David Geffen School of MedicineUniversity of CaliforniaLos AngelesUSA
  2. 2.John A. Burns School of MedicineUniversity of HawaiiHonoluluUSA
  3. 3.Pacific Health Research and Education InstituteHonoluluUSA
  4. 4.Department of Health Policy and Management, UCLA Fielding School of Public HealthUniversity of California, Los AngelesLos AngelesUSA

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