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)