Diabetes drugs helping to drive rise in US medication expenditures
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Key takeaways:
- Total expenditures for diabetes medications rose from $27.15 billion in 2011 to $89.17 billion in 2020.
- Expenditures increased for insulin, incretin mimetics, DPP-IV inhibitors and combination drugs.
Annual expenditures for diabetes medications more than tripled in the U.S. from 2011 to 2020, and the increase played a role in an overall rise in money spent on prescription drugs, according to study findings.
“American health plans and consumers have spent more on medications in every therapeutic category year over year over the last decade. Spending on metabolic agents, antidiabetic agents and insulin in particular has increased most dramatically even after adjusting for inflation,” Tyler J. Varisco, PharmD, PhD, assistant professor of pharmaceutical health outcomes and policy at the University of Houston College of Pharmacy, told Healio. “While the prevalence of diabetes increased over the period of our study, drug prices have increased due to market pressure on pharmaceutical companies across the sector and the advent of new, costly, brand-name-only medications indicated for the treatment of diabetes. Innovation in diabetes management is not without cost, and unfortunately, American consumers and health plans bear the brunt of the cost of innovation.”
Varisco and colleagues conducted a cross-sectional analysis of prescription medication expenditures in the U.S. from 2011 to 2020. Data were obtained from the Medical Expenditures Panel Survey. Total prescribed medication expenditures per calendar year were collected. All costs were adjusted to 2020 U.S. dollars. Sources for payments included out of pocket, Medicare, Medicaid, private insurance, TRICARE/Veterans Administration/CHAMPVA (TVAC), other government sources and other sources. Medications were placed into therapeutic categories. Diabetes medications were assessed as a subcategory for metabolic agents and included sulfonylureas, biguanides, insulin, thiazolidinediones, diabetes combination drugs, DPP-IV inhibitors, amylin analogs, incretin mimetics, SGLT2 inhibitors, meglitinides, miscellaneous diabetes agents and alpha-glucosidase inhibitors.
The study was published in Research in Social and Administrative Pharmacy.
Insulin leads rise in diabetes expenditures
From 2011 to 2020, $4.04 trillion was spent on prescription medications in the U.S. Annual medication expenditures increased from $341.49 billion in 2011 to $473.12 billion in 2020 (P < .001). The cost of metabolic agents rose from $58.66 billion in 2011 to $100.08 billion in 2020 (P < .0001). Within the metabolic agent category, expenditures for diabetes medications rose from $27.15 billion in 2011 to $89.17 billion in 2020 (P < .0001).
Americans spent more money on insulin than any other diabetes therapy. Annual expenditures for insulin rose from $13.93 billion in 2011 to $37.98 billion in 2020 (P = .0003). The cost of incretin mimetics increased from $1.18 billion in 2011 to $21.29 billion in 2020, DPP-IV inhibitor expenditures rose from $2.9 billion in 2011 to $10.26 billion in 2020 and money spent on combination diabetes drugs rose from $1.75 billion in 2011 to $7 billion in 2020 (P < .0001 for all). Expenditures on thiazolidines decreased from $3.72 billion in 2011 to $100 million in 2020 (P = .0004). No changes in expenditures were observed for other type of diabetes medications.
Medicare now leading source for expenditures
The source with the largest increase in diabetes drug expenditures was Medicare, where costs rose from $7.12 billion in 2011 to $38.23 billion in 2020 (P < .0001). Private insurance plans had diabetes drug costs increase from $9.91 billion in 2011 to $33.8 billion in 2020 (P < .0001). Medicaid also had an increase in expenditures from $2.65 billion in 2011 to $8.86 billion in 2020 (P = .001). Other sources with increases in diabetes expenditures were TVAC and other sources. No increases were observed for out-of-pocket expenditures and other government sources.
“We did not directly evaluate reasons for increased expenditures, but it is safe to say that diabetes drugs have simply become more expensive,” Varisco said. “Insulin prices provide a cautionary tell of the consequences of allowing the market to price drugs. The prescription drug market is not a free market in that medical necessity, rather than demand and consumer choice, drive prices. There is also a tremendous barrier to entry in that new drug products must meet be approved by FDA and are then given a prolonged period of market exclusivity.”
Varisco warned that diabetes medication expenses may continue to rise as newer, more expensive agents are prescribed by providers.
“Further research is needed to evaluate the appropriateness of use and cost-effectiveness of newer, costlier glucose-lowering agents,” Varisco said. “Long-term observational studies can be a useful tool to evaluate how these agents are being used in the real world.”
For more information:
Tyler J. Varisco, PharmD, PhD, can be reached at tjvarisc@central.uh.edu.
Perspective
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Susan Cornell, PharmD, CDE, FAPhA, FAADE
The old adage of “drugs don’t work in people that do not take them,” holds true more today than ever before. Today, there are many limitations for people to get the medications that they need to better manage their diabetes and related conditions. It is true that the cost of medications is skyrocketing. This is especially true for the preferred diabetes medications that can lower blood glucose, while simultaneously reducing the risks for cardiometabolic disease, chronic kidney disease, heart failure and more.
However, access to medications is a concern for patients and health care providers. There are a multitude of reasons people do not take their prescribed medications, including drug cost, supply shortages, pill burden, fear of side effects, mistrust in medications or health care system and more. Of course, suboptimal or no treatment leads to many unnecessary outcomes and increases the overall medical expenditures.
It is important for people to realize that the increase in cost for diabetes medications goes beyond the price set by pharmaceutical companies and includes factors involving health insurance companies and pharmacy benefit managers (PBMs). The PBMs, not prescribers, control which medications are prescribed for patients based on negotiations with the pharmaceutical companies. The pharmaceutical companies are forced to make deals on their medications to get their drug onto a health care payer formulary and be covered by that health insurance plan. Part of the cost of prescriptions goes to the pockets of PBMs.
It is interesting in this article that expenditure increases occurred in the health care plans tied to PBMs. Whereas, no increases were observed for the out-of-pocket expenditures group, which had no PBM influence. Is it really the diabetes drugs driving the rise in the U.S. medication expenditures, or is it the health care system, specifically PBMs?
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