Medicare Part D spending at in-house pharmacies nearly quintupled from 2011 to 2019
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Key takeaways:
- Medicare Part D spending at in-house pharmacies rose from $324.1 million in 2011 to $1.6 billion in 2019.
- Researchers said evaluation of increasing financial integration among practices is “urgently” needed.
Medicare Part D spending on prescriptions filled at in-house pharmacies nearly quintupled from 2011 and 2019, topping out at $1.6 billion, with increases concentrated among high-cost drugs, according to data published in JAMA Network Open.
“Physician practices and health systems are increasingly launching their own pharmacies to dispense self-administered specialty medications, and this is especially impacting large practices in specialties such as oncology, urology, infectious disease, rheumatology and gastroenterology,” Pragya Kakani, PhD, of Weill Cornell Medical College, told Healio. “This represents a really major change in how these medicines — which were historically filled by external pharmacies — reach patients.”
Kakani added that she became interested in the topic as a graduate student in health economics, when she discovered that many practices, particularly in oncology, “were launching their own pharmacies that dispense oral medicines, but very little was known about how prevalent this trend really was or its impact on patients.”
To investigate these trends, Kakani and colleagues conducted a cross-sectional study of 8,020,652 Medicare beneficiaries (median age, 72 years; 57% women), specifically examining how much of their Part D spending could be attributed to in-house pharmacies between 2011 and 2019. The researchers additionally analyzed the spread of in-house pharmacies among specialties with the greatest total Part D spending in 2019, which were rheumatology, gastroenterology, infectious disease, urology and medical oncology.
Physician-organization operated pharmacies were identified through a combination of databases and manual review. The beneficiaries analyzed each year were limited to those enrolled in Medicare fee-for-service Parts A and B continuously or until death, and Part D for 1 month or longer.
According to the researchers, the share of Medicare Part D spending at in-house pharmacies rose from $324.1 million in 2011 to $1.6 billion overall in 2019. High-cost drug classes, particularly oral anticancer treatments — 10% in 2011 vs. 34% in 2019— as well as antivirals — 12% vs. 20% — and immunosuppressants — 2% vs. 9% — accounted for most of these ballooning payments.
By 2019, the following shares of physicians were practicing in facilities with in-house pharmacies relevant to their specialty:
- 63% of oncologists, up from 26% in 2011;
- 29% of infectious disease specialists, up from 16%;
- 21% of gastroenterologists, up from 5%;
- 22% of rheumatologists, up from 4%; and
- 20% of urologists, up from 1%.
Results also demonstrated that facilities were more likely to have an in-house pharmacy if they were larger — with a 0.75 percentage point increase (95% CI, 0.56-0.94) per additional physician — or enrolled in the 340B Drug Discount Program — which carried a 10.91 percentage point increased likelihood (95% CI, 6.33-15.48).
“I think the biggest and most important unanswered question is how the integration of pharmacies into physician practices actually impacts patients and whether the potential to improve care is actually realized,” Kakani said. “Does it make it easier for patients to access these medications and improve medication management? Or does it distort prescribing towards profitable drugs? This is an important area of ongoing and future research.”
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