Biologic Bi l i U Use and dS Spending di under Medicare: A Tale of Two Parts (B and D) using Case Studies in Rheumatoid Arthritis Jalpa A. Doshi, PhD Universityy of Pennsylvania y School of Medicine Leonard Davis Institute of Health Economics Center for Health Incentives Center for Evidence-based Practice AcademyHealth ARM ARM, Boston June 28, 2010 Biologics vs. Chemically synthesized drugs • Unlike chemically synthesized drugs which are smallmolecules biologics are large molecules, large, complex molecules derived from living organisms (MedPAC 2009) – Typically provided as injections or infusions – Require special handling such as refrigeration – More costly to produce – More difficult to assess for a high degree of similarity • Two broad categories – Older biologics: vaccines, blood products, and hormones – Newer biologics: treatments for diseases like cancers, anemia, chronic kidney disease, rheumatoid arthritis, and multiple sclerosis Biologics covered under Part B • Physician-administered biologics • Patient cost-sharing – Standard 20% coinsurance – Supplemental insurance (Medigap, retiree plan, plan Medicaid) may cover some or all coinsurance • Physicians y receive Medicare reimbursement for the biologic itself and the administration fee • Data captured in Part B files Biologics covered under Part D (since 2006) • Self-administered biologics • Patient cost-sharing – Initial 25% coinsurance (higher if on specialty tier) – 100% coinsurance in donut hole – 5% coinsurance over catastrophic limit – LIS p patients face minimal cost-sharing g • Physicians typically receive no payment • Part D p plans may y use formulary y and utilization management tools (e.g. prior authorization, step therapy) • Data captured in Part D files Part B and D Biologic Spending • Medicare spending on biologics is substantial ~$13 billi iin 2007 (M billion (MedPAC dPAC 2009) – Top six Part B biologics accounted for ~$7 billion (43%) of ~$17 $17 billion in total Part B dr drug g spending – Spending on Part D biologics totaled ~$3.9 billion accounting for 6% of total Part D drug spending • Biologic spending under both Parts B and D is expected to increase, thus raising issues for Medicare in terms of balancing costs and patient access • Yet, little research till date has examined issues surrounding g biologic g use and spending p g in Medicare to inform policy The Medicare Modernization Act (MMA) & recentt release l off Prescription P i ti Drug D Event E t (PDE) data have created several opportunities • MMA extended coverage to additional biologics under Part D and also significantly changed the reimbursement off already l d covered d physician-dispensed h i i di dP Partt B bi biologics l i – Evaluations of these policy changes may offer lessons for future • Linkage of PDE files with the Medicare claims makes it possible to comprehensively examine a series of research questions related to biologics – Particularly in disease areas where approved biologic treatments span across Part B and Part D • Cancers, C multiple lti l sclerosis, l i rheumatoid h t id arthritis th iti Biologics for Rheumatoid Arthritis Date of A Approval l Ad i i Administration i Medicare coverage ®) Etanercept (ENBREL p ( Nov. 1998 Subcutaneous None Infliximab (REMICADE®) Nov. 1999 IV infusion Part B Anakinra (KINERET®) Nov. 2001 Subcutaneous None Dec. 2002 MMA 2003 Subcutaneous None Bi l i A Biologic Agent Adalimumab (HUMIRA®) Biologics for Rheumatoid Arthritis Date of A Approval l Ad i i Administration i Medicare coverage ®) Etanercept (ENBREL p ( Nov. 1998 Subcutaneous None Infliximab (REMICADE®) Nov. 1999 IV infusion Part B Anakinra (KINERET®) Nov. 2001 Subcutaneous None Dec. 2002 MMA 2003 Subcutaneous None Bi l i A Biologic Agent Adalimumab (HUMIRA®) Infliximab was the predominant RA biological used in the Medicare population prior to MMA Medicare population prior to MMA Biologics for Rheumatoid Arthritis Date of A Approval l Ad i i Administration i Medicare coverage ®) Etanercept (ENBREL p ( Nov. 1998 Subcutaneous None Infliximab (REMICADE®) Nov. 1999 IV infusion Part B Anakinra (KINERET®) Nov. 2001 Subcutaneous None Adalimumab (HUMIRA®) Dec. 2002 Subcutaneous 2004 (85% AWP + ** Adm. fee) 2005 (106% ASP + * Adm Adm. fee) None Bi l i A Biologic Agent Biologics for Rheumatoid Arthritis Date of A Approval l Ad i i Administration i Medicare coverage ®) Etanercept (ENBREL p ( Nov. 1998 Subcutaneous Part D Infliximab (REMICADE®) Nov. 1999 IV infusion Part B Anakinra (KINERET®) Nov. 2001 Subcutaneous Part D Adalimumab (HUMIRA®) Dec. 2002 Subcutaneous 2004 (85% AWP + ** Adm. fee) 2005 (106% ASP + * Adm Adm. fee) 2006 (106% ASP + Part D) Part D Bi l i A Biologic Agent Biologics for Rheumatoid Arthritis Date of A Approval l Ad i i Administration i Medicare coverage ®) Etanercept (ENBREL p ( Nov. 1998 Subcutaneous Part D Infliximab (REMICADE®) Nov. 1999 IV infusion Part B Anakinra (KINERET®) Nov. 2001 Subcutaneous Part D Adalimumab (HUMIRA®) Dec. 2002 Subcutaneous 2004 (85% AWP + ** Adm. fee) 2005 (106% ASP + * Adm Adm. fee) 2006 (106% ASP + Part D) Part D Abatacept (ORENCIA Abatacept (ORENCIA®) Dec 2005 Dec. 2005 IV infusion IV infusion Part B Rituximab (RITUXAN®) Feb. 2006 IV infusion Part B Bi l i A Biologic Agent Impact of MMA Changes on y (in ( 2006 dollars)) for Total Allowed Payments Infliximab in RA patients 600 537 Med dicare To otal Allow wed Pay ym,ents (($ Million ns) 550 492 484 500 505 450 400 350 366 300 85% AWP + **Adm. Adm. fee 250 95% AWP 200 106% ASP + *Adm. Adm. fee 106% ASP/CAP/ Part D 150 2002 2003 2004 2005 2006 Doshi et al. Arthritis Care & Research 2009 Source: 2002-2006 5% Medicare files Impact of Availability of Alternative Biologics on Utilization of Infliximab in RA patients • Low switching rate to new Part B biologics available in 2006 – 3% of infliximab users (2005) switched to abatacept (2006) – 2% of infliximab users (2005) switched to rituximab (2006) • PDE data were not yet released to study switch to Part D biologics covered starting 2006 Doshi et al. Arthritis Care & Research 2009 Source: 2002-2006 5% Medicare files Linkage with Part D PDE data………. data • Linkage of 5% Medicare claims and PDE files – Offered first opportunity to comprehensively examine use and spending on all available RA biologics in a nationally-representative Medicare sample • Part P t B (infusions) (i f i ) vs. Part P t D ((self-injectables) lf i j t bl ) • LIS vs. Non-LIS patients Total Spending on Biologics among RA patients enrolled in Stand-alone Stand alone PDPs in 2007 M Millions of dollars 800 * Part P t D estimates ti t do d nott reflect plan rebates 439 361 341 192 45 49 Source: Doshi et al. Analysis of 2007 5% Medicare CCW and PDE files 160 3 Total Spending on Biologics among RA patients enrolled in Stand-alone Stand alone PDPs in 2007 M Millions of dollars 800 * Part P t D estimates ti t do d nott reflect plan rebates 439 361 341 192 45 49 Source: Doshi et al. Analysis of 2007 5% Medicare CCW and PDE files 160 3 Percent Use of Biologics among patients in Stand-alone PDPs in 2007 RA p Source: Doshi et al. Analysis of 2007 5% Medicare CCW and PDE files Percent Use of Biologics among patients in Stand-alone PDPs in 2007 RA p Source: Doshi et al. Analysis of 2007 5% Medicare CCW and PDE files Mean Number of Administrations/Fills among RA Biologic Users in Stand-alone Stand alone PDPs in 2007 Mean number of administrations Mean number of 30-day 30 day fills Source: Doshi et al. Analysis of 2007 5% Medicare CCW and PDE files Mean Total Spending on Biologics among RA Biologic Users in Stand-alone Stand alone PDPs in 2007 Source: Doshi et al. Analysis of 2007 5% Medicare CCW and PDE files Mean Out-of-pocket Spending on Biologics among RA Biologic Users in Stand-alone Stand alone PDPs in 2007 Source: Doshi et al. Analysis of 2007 5% Medicare CCW and PDE files Mean Out-of-pocket Spending on Biologics among RA Biologic Users in Stand-alone Stand alone PDPs in 2007 OOP costs for those without Medicare supplemental insurance Paid for in part or full for patients with Medigap or retiree plan Paid by Medicaid for LIS patients with dual-eligibility Source: Doshi et al. Analysis of 2007 5% Medicare CCW and PDE files Mean Out-of-pocket Spending on Biologics among RA Biologic Users in Stand-alone Stand alone PDPs in 2007 OOP costs for those without Medicare supplemental insurance Paid for in part or full for patients with Medigap or retiree plan Paid by Medicaid for LIS patients with dual-eligibility Source: Doshi et al. Analysis of 2007 5% Medicare CCW and PDE files Linkage with Part D plan characteristics and prescriber characteristics files…… • Link 100% Medicare Part A/B/D and beneficiary summary files with recently released Part D plan characteristics h t i ti and d prescriber ib characteristics h t i ti fil files ffor allll RA biologic users – Examine patient, patient provider, provider and plan characteristics associated with the use and spending on Part B and Part D biologic therapies • Files under request at CMS…… Linkage with Medicare Replacement Drugs Demonstration (MRDD) data…. • Extraction of the PDE and Medicare files for the MRDD enrollees with RA provides a patient sample in “need” of P t D bi Part biologics l i – Physician confirmed diagnosis of RA – Signed Si d physician’s h i i ’ prescription i ti ffor one off the th selflf injectable biologics (etanercept, adalimumab, kineret) – Majority enrolled into Part D in January 2006 after MRDD ended on December 31, 2005 • Sample limited to biologic users during MRDD period who enrolled in stand-alone PDPs in January 2006 – Non-LIS patients with no gap coverage for biologics compared with full-subsidy LIS patients (i.e. control) Percent reaching Gap and Catastrophic Coverage and Time in these Benefit Phases in 2006* Non NonLIS LIS N % reaching initial coverage limit (ICL) M Mean months th to t reach h ICL Mean months in gap 1260 1166 93% 4.5 4.0 94% 3.7 3.4 % reaching catastrophic coverage (CAT) % reaching CAT among those reaching ICL Mean months to reach CAT after hitting ICL 79% 85% 3.5 93% 99% 3.3 * Among those using Part D biologics in 2006 Source: Doshi et al. Analysis of 2006 Medicare and PDE files for MRDD sample Take Away and Policy Implications • Intersection of Part B and Part D data creates a powerful resource for research on biologics in Medicare patients • Reductions in physician payment rates for Part B drugs were associated with a remarkable slowdown in the rate of increase in spending p g for Part B RA biologics g ((infliximab)) Implications for Medicare Part B • P Patient ti t cost-sharing t h i appears tto d drive i choice h i b between t P Partt B vs. Part D RA biologics with LIS patients more likely to use the latter • Most Part D biologic users enter donut hole and majority enter catastrophic coverage Implications for Medicare Part D Acknowledgements Penn research team: • Pengxiang Li, University of Pennsylvania School of Medicine • Sean McElligott, Wharton School • Andrea Puig, Wharton School MRDD research study team: • Lorraine Johnson, Centers for Medicare & Medicaid Services Mohr Center for Medical Technology Policy • Penny Mohr, • Jennifer Polinski, Brigham and Women’s Hospital Funding: • Leonard Davis Institute of Health Economics, Penn-Pfizer Alliance Grant Grant, American Heart Association Association, Population Aging Research Center (PARC)