Changes in Drug List Prices and Amounts Paid by Patients and Insurers

Eric J. Yang, Emilio Galan, Robert Thombley, Andrew Lin, Jaeyun Seo, Chien Wen Tseng, Jack S. Resneck, Peter B. Bach, R. Adams Dudley

Research output: Contribution to journalArticlepeer-review

Abstract

Importance: High out-of-pocket drug costs can cause patients to skip treatment and worsen outcomes, and high insurer drug payments could increase premiums. Drug wholesale list prices have doubled in recent years. However, because of manufacturer discounts and rebates, the extent to which increases in wholesale list prices are associated with amounts paid by patients and insurers is poorly characterized. Objective: To determine whether increases in wholesale list prices are associated with increases in amounts paid by patients and insurers for branded medications. Design, Setting, and Participants: Cross-sectional retrospective study analyzing pharmacy claims for patients younger than 65 years in the IBM MarketScan Commercial Database and pricing data from SSR Health, LLC, between January 1, 2010, and December 31, 2016. Pharmacy claims analyzed represent claims of employees and dependents participating in employer health benefit programs belonging to large employers. Rebate data were estimated from sales data from publicly traded companies. Analysis focused on the top 5 patent-protected specialty and 9 traditional brand-name medications with the highest total drug expenditures by commercial insurers nationwide in 2014. Data were analyzed from July 2017 to July 2020. Exposures: Calendar year. Main Outcomes and Measures: Changes in inflation-adjusted amounts paid by patients and insurers for branded medications. Results: In this analysis of 14.4 million pharmacy claims made by 1.8 million patients from 2010-2016, median drug wholesale list price increased by 129% (interquartile range [IQR], 78%-133%), while median insurance payments increased by 64% (IQR, 28%-120%) and out-of-pocket costs increased by 53% (IQR, 42%-82%). The mean percentage of wholesale list price accounted for by discounts increased from 17% in 2010 to 21% in 2016, and the mean percentage of wholesale list price accounted for by rebates increased from 22% in 2010 to 24% in 2016. For specialty medications, median patient out-of-pocket costs increased by 85% (IQR, 73%-88%) from 2010 to 2016 after adjustment for inflation and 42% (IQR, 25%-53%) for nonspecialty medications. During that same period, insurer payments increased by 116% for specialty medications (IQR, 100%-127%) and 28% for nonspecialty medications (IQR, 5%-34%). Conclusions and Relevance: This study's findings suggest that drug list prices more than doubled over a 7-year study period. Despite rising manufacturer discounts and rebates, these price increases were associated with large increases in patient out-of-pocket costs and insurer payments.

Original languageEnglish (US)
Pages (from-to)e2028510
JournalJAMA Network Open
Volume3
Issue number12
DOIs
StatePublished - Dec 1 2020

PubMed: MeSH publication types

  • Journal Article
  • Research Support, N.I.H., Extramural
  • Research Support, Non-U.S. Gov't

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