The relationship between the number of available therapeutic options and government payer (medicare part D) spending on topical drug products

Michael C. Kwa, Kyle Tegtmeyer, Leah J. Welty, Sam G. Raney, Markham C. Luke, Shuai Xu*, Betty Kong

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

The cost of prescription drugs has increased at rates far exceeding general inflation in recent history, with topical drugs increasing at a disproportionate rate compared to other routes of administration. We assessed the relationship between net changes in the number of therapeutic options, defined as any approved drug or therapeutic equivalent on the market, and prescription topical drug spending. Drugs were divided based on the category of use through pairing of Medicare Part D Prescriber Public Use and Food and Drug Administration (FDA) approved drug products databases. Across drug classes, we modeled the log of the ratio of total spending per unit in 2015 to total spending per unit in 2011 as a linear function of net number of topical therapeutic options over this time period. Primary outcomes include total Medicaid Part D spending on topical drugs and net change in the number of available therapeutic options within each category of use. Total spending on topical drugs increased by 61%, while the number of units dispensed increased by only 18% from 2011–2015. The greatest total spending increases were in categories with few new therapeutic options, such as topical corticosteroid and antifungal medications. Each net additional therapeutic option during 2011–2015 was associated with an reduction in how much relative spending per unit increased (95% CI 2.5%–14.4%, p = 0.013). Stimulating greater competition through increasing the net number of therapeutic options within each major topical category of use may place downward pressure on topical prescription drug spending under medicare Part D.

Original languageEnglish (US)
Pages (from-to)559-565
Number of pages7
JournalArchives of Dermatological Research
Volume312
Issue number8
DOIs
StateAccepted/In press - 2020

Keywords

  • FDA
  • Generics
  • Market competition
  • Medicare
  • Topical drugs

ASJC Scopus subject areas

  • Dermatology

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