Medicare spending on conventional DMARDs increased fivefold over 5 years
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Medicare spending on DMARDs frequently used for rheumatoid arthritis increased from $4.4 billion to more than $10 billion between 2012 and 2017, with biologic DMARDs accounting for 95% of total expenditures each year, according data.
However, although most of this spending went toward biological DMARDs, findings published in Seminars in Arthritis and Rheumatism revealed that expenditures for conventional DMARDs increased at a much faster pace during this time — a more than fivefold increase — compared with a twofold increase for the biologic drugs.
“This was driven by an increase in the unit cost of drugs which consistently outpaced an increase explicable by inflation alone,” Deepan S. Dalal, MD, of the Brown University School of Medicine, told Healio Rheumatology. “For example, the unit cost of generic hydroxychloroquine in 2012 was $0.29, which in 2017 dollars would be $0.33 based on the medical component of CPI. However, the actual cost in 2017 was $1.84, thus representing a 458% increase. Such an increase in cost was also noted for biologic agents. The annual cost of etanercept in 2012 was $25,875, which in 2017 dollars would be $29,507. However, the actual cost in 2017 was $56,897, representing a 93% increase in the cost.”
“Such increases in conventional DMARDs can be explained by lack of or limited availability of competitors,” he added. “In the RA treatment algorithms, there are a limited number of conventional DMARDs to choose from. Biologic DMARDs, on the other hand, are considerably more expensive than conventional DMARDs, hence providing an opportunity to manufacturers of conventional DMARDs to increase the unit cost of these agents.”
To compare recent trends in Medicare spending on conventional and biologic DMARDs used to treat RA, Dalal and colleagues analyzed CMS data for Parts B and D drugs from 2012 to 2017.
The researchers calculated total spending by adding expenditures across various drug formulations, while unit costs were determined by dividing total spending by the number of doses dispensed.
According to the researchers, total Medicare spending on conventional DMARDs between 2012 and 2017 increased fivefold, from $98 million to $579 million. Moreover, total spending on biologic DMARDs during this time ballooned from $4.3 billion to about $10 billion. These increases were driven largely by unit costs, rather than the number of beneficiaries, Dalal and colleagues wrote. For example, there was a sixfold increase in the unit cost of generic hydroxychloroquine, followed by methotrexate and leflunomide. Among biologic DMARDs, the unit prices of adalimumab and etanercept each increased twofold.
“We also noted that the proportion of spending and beneficiaries on self-administered biologics compared to office-administered biologics increased during the study period,” Dalal said. “Across all biologic agents, the unit cost of office administered agents increased less than the unit cost of self-administered agents. As such, when drug administration costs are factored in, office administered agents are considerably more expensive than self-administered agents.”
“If the post-marketing unit costs of DMARDs continue to increase at the pace noted in this study, with the increasing number of Medicare beneficiaries, the total spending on these agents will increase at an even faster pace,” he added. “Hence, policy changes targeting the post-marketing drug prices are required.”
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