Potential Savings Associated with Drug Substitution in Medicare Part D: The Translating Research into Action for Diabetes (TRIAD) Study
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Drug substitution is a promising approach to reducing medication costs.
To calculate the potential savings in a Medicare Part D plan from generic or therapeutic substitution for commonly prescribed drugs.
Cross-sectional, simulation analysis.
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.
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.
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.
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 WORDSpharmacoeconomics Medicare health care policy
Significant contributions to this study were made by members of the Translating Research into Action for Diabetes (TRIAD) Study Group.
This study was jointly funded by Program Announcement number 04005 from the Centers for Disease Control and Prevention (Division of Diabetes Translation) and the National Institute of Diabetes and Digestive and Kidney Diseases. Drs. Mangione and Duru are supported in part by the UCLA Resource Center for Minority Aging Research, Center for Health Improvement of Minority Elderly (RCMAR/CHIME) under NIH/NIA Grant P30-AG021684. Dr. Mangione also received support from the NIH/NCATS UCLA CTSI Grant Number UL1TR000124. Dr. Duru also received support from the Amos Medical Faculty Development Award from the Robert Wood Johnson Foundation as well as NIA Grant K08-AG033630.
A prior version of these analyses was presented at the 33rd Annual Meeting of the Society of General Internal Medicine in Minneapolis MN, April 28 - May 1, 2010.
Conflicts of Interest
The authors declare that they do not have any conflicts of interest.
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