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J Gen Intern Med. 2014 Jan;29(1):230-6. doi: 10.1007/s11606-013-2546-6. Epub 2013 Aug 22.

Potential savings associated with drug substitution in Medicare Part D: the Translating Research into Action for Diabetes (TRIAD) study.

Author information

1
David Geffen School of Medicine, University of California, Los Angeles, CA, USA, kduru@mednet.ucla.edu.

Abstract

BACKGROUND:

Drug substitution is a promising approach to reducing medication costs.

OBJECTIVE:

To calculate the potential savings in a Medicare Part D plan from generic or therapeutic substitution for commonly prescribed drugs.

DESIGN:

Cross-sectional, simulation analysis.

PARTICIPANTS:

Low-income subsidy (LIS) beneficiaries (nā€‰=ā€‰145,056) and non low-income subsidy (non-LIS) beneficiaries (nā€‰=ā€‰1,040,030) enrolled in a large, national Part D health insurer in 2007 and eligible for a possible substitution.

MEASUREMENTS:

Using administrative data from 2007, we identified claims filled for brand-name drugs for which a direct generic substitute was available. We also identified the 50 highest cost drugs separately for LIS and non-LIS beneficiaries, and reached consensus on which drugs had possible therapeutic substitutes (27 for LIS, 30 for non-LIS). For each possible substitution, we used average daily costs of the original and substitute drugs to calculate the potential out-of-pocket savings, health plan savings, and when applicable, savings for the government/LIS subsidy.

RESULTS:

Overall, 39 % of LIS beneficiaries and 51 % of non-LIS beneficiaries were eligible for a generic and/or therapeutic substitution. Generic substitutions resulted in an average annual savings of $160 in the case of LIS beneficiaries and $127 in the case of non-LIS beneficiaries. Therapeutic substitutions resulted in an average annual savings of $452 in the case of LIS beneficiaries and $389 in the case of non-LIS beneficiaries.

CONCLUSIONS:

Our findings indicate that drug substitution, particularly therapeutic substitution, could result in significant cost savings. There is a need for additional studies evaluating the acceptability of therapeutic substitution interventions within Medicare Part D.

PMID:
23975059
PMCID:
PMC3889972
DOI:
10.1007/s11606-013-2546-6
[Indexed for MEDLINE]
Free PMC Article
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