Drug Prices and OOP Costs Increased Beyond Inflation Rates 2009-2018, But Were Not Related

Between 2009 and 2018, drug prices in the US increased at an annual rate of 4.4% while median out-of-pocket (OOP) costs increased 9.6% per year. However, researchers say there was no link between these increases for individual drugs.

Prescription drugs administered in clinics or hospitals, including infusions and injections, constitute approximately one-third of prescription drug spending in the US, and previous research has shown that patient OOP costs for pharmacy-administered drugs increased with rising drug prices. However, it remained unclear whether a similar trend existed for clinician-administered drugs.

Drug price increase | Image credit: Alex Puhovoy – stock.adobe.com

Published in Health Services Research, the cross-sectional study conducted by the Program On Regulation, Therapeutics, And Law (PORTAL) at Brigham and Women's Hospital examined the data of privately insured patients who received at least 1 of 52 brand name clinician-administered drugs from 2009 to 2018. Among the 1.2 million commercially insured patients in this cohort, 62% were female and 5% were enrolled in a high deductible health plan (HDHP), with median (IQR) age of 53 (44-59) years. Interestingly, the percentage of female patients, patients enrolled in HDHPs, and patients receiving clinician-administered drugs in hospital facilities all increased over the decade-long study period.

Of the 52 included drugs, 18 encountered no generic or biosimilar competition throughout the study period, while the remaining drugs either entered the study after 2009 or faced competition prior to 2018. The distribution of drug categories revealed that 27 drugs were antineoplastic, 7 were hematologic, 6 were immunomodulating, and 5 were antibiotics.

Throughout the study period, the weighted median annual changes in wholesale acquisition cost (WAC) and average sales price (ASP) were 4.4% (1.1%-6.0%) and 3.3% (–0.3% to 5.5%), respectively. The annual price changes remained consistent across each year, and, notably, 42 of the 52 drugs experienced at least 1 year where both the list and net prices escalated above inflation.

“These rising prices for existing drugs have raised concerns about medication affordability,” the authors noted. “However, unlike prior studies of retail prescription drugs, we found that rising out-of-pocket costs for clinician-administered drugs were not directly related to price changes for individual drugs.”

Additionally, the median percentage of individuals incurring any OOP costs rose from 38% in 2009 to 48% in 2018, with median nonzero annual costs escalating by 9.6% (4.1%-15.4%) annually. This corresponded with an increase in median nonzero OOP costs from $351 ($223-$987) in 2009 to $768 ($619-$1645) in 2018. Among all patients, median deductibles and coinsurance also saw an uptick from $0 ($0-$2) and $104 ($0-$630) in 2009, to $0 ($0-$460) and $236 ($11-$1163) in 2018, respectively. These trends were consistent across various subgroups by insurance plan type and place of service.

In general, each 1% rise in (WAC correlated with a 0.09% reduction (95% CI, 0.03%-0.15%) in the proportion of patients paying nonzero OOP expenses compared with the prior year (P = .003). However, no relationship was observed between fluctuations in WAC and changes in median nonzero OOP expenses. Similarly, changes in ASP did not show any connection with shifts in OOP costs.

“This is likely because private insurers frequently reimburse hospitals and clinics at substantial markups, and because insurance benefit design can delink patient out-of-pocket costs from the cost of individual drugs,” the authors said. “With clinician-administered drugs accounting for nearly one-third of all prescription drug spending annually, higher cost-shifting to patients is a concerning development that deserves careful scrutiny by policymakers to prevent adverse outcomes from cost-related nonadherence.”

Additionally, since these drugs fall under patients' medical insurance coverage, OOP expenses like deductibles may be influenced by the utilization of other health care services, such as office visits or hospitalizations.

Similar findings emerged when factoring in OOP expenses for drug administration fees and when analyzing subgroups based on enrollment in HDHPs vs non-HDHPs, as well as among patients receiving drugs exclusively in hospital settings. Among those solely receiving clinician-administered drugs in office settings, the authors observed a positive correlation between ASP changes and median nonzero OOP costs: For every 1% increase in ASP, there was a 0.53% (0.02%-1.04%) rise in median nonzero OOP costs.

According to the authors, these findings underscore the importance for policymakers to devise strategies aimed at reducing OOP costs for patients receiving clinician-administered drugs, complementing existing efforts targeting pharmacy-administered drugs. For instance, although the Inflation Reduction Act plans to cap patient annual OOP costs for pharmacy-administered drugs at $2000 starting in 2025, this cap does not extend to clinician-administered drugs.

Reference

Lalani HS, Russo M, Desai RJ, Kesselheim AS, Rome BN. Association between changes in prices and out-of-pocket costs for brand-name clinician-administered drugs. Health Serv Res. Published online January 21, 2024. doi:10.1111/1475-6773.14279