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Medicare could have saved more than a billion dollars in one year alone if the program's spending on brand-name diabetes drugs matched that of the Veterans Administration, researchers found.
In a retrospective study done with data from 2008, brand-name drug use on oral hypoglycemics, statins, angiotensin-converting enzyme (ACE) inhibitors or angiotensin-receptor blockers (ARBs), and insulin analogs was nearly three times higher among Medicare Part D beneficiaries than among VA patients, Walid Gellad, MD, MPH, of the VA Center for Health Equity Research and Promotion in Pittsburgh, and colleagues reported.
In cost analyses, the researchers estimated that Medicare spending on the diabetic population would have been $1.4 billion less in 2008 if brand-name drug use matched that of the VA, they wrote.
"We found large differences in rates of brand-name drug use among patients with diabetes in Medicare Part D and the VA, with substantial economic implications," they wrote online in the Annals of Internal Medicine. "These differences likely reflect structural differences in formulary management between the two systems."
Medicare and the VA use different approaches to manage prescription drug benefits. Medicare relies on private plans with distinct formularies, while the VA administers its own benefits using a national formulary.
To compare rates of brand-name drug use among older adults with diabetes in these two populations, Gellad and colleagues conducted a retrospective cohort study involving 1,061,095 Medicare Part D beneficiaries and 510,485 veterans ages 65 and up.
They focused on four medication groups commonly used by patients with diabetes: oral hypoglycemics, long-acting insulins, statins, and ACE inhibitors or ARBs.
Overall, they found that brand-name drug use was far higher among Medicare patients than among VA patients:
- Oral hypoglycemics: 35.3% versus 12.7%
- Statins: 50.7% versus 18.2%
- ACE inhibitors/ARBs: 42.5% versus 20.8%
- Insulin analogs: 75.1% versus 27%
Among Medicare beneficiaries, the percentage of patients using any brand-name oral hypoglycemics ranged from 25.1% in the fifth percentile to 42.4% in the 95th percentile of hospital referral regions, compared with a range of 5.1% to 21.9% for VA beneficiaries.
There were similar variations for insulin analogs, statins, and ACE inhibitors or ARBs, the researchers reported.
Across the four medication groups, Medicare would have seen savings of $589 million for oral hypoglycemics, $189 million for insulins, $404 million for statins, and $183 million for ACE inhibitors or ARBs.
On the other hand, VA spending would have increased by $108 million (57%) if patients used brand-name drugs at the same rate as in Medicare, the authors pointed out.
One factor that may explain much of the between-system difference in brand-name drug use is the VA's ability to promote "therapeutic substitution" by prescribers using a national formulary, they said. Part D plans have tools for encouraging use of less costly drugs, but they have applied them less extensively than the VA, the researchers wrote.
The study was limited because it couldn't fully describe the factors underlying differences in brand-name drug use. But Gellad and colleagues still concluded that significant savings "could be realized through policies that promote Part D plan efficiency and by encouraging physicians to consider costs and value in their prescribing."
Gellad was supported by VA Health Services Research & Development, the VA Competitive Pilot Project Fund, the RAND-University of Pittsburgh Health Institute, and the NIH's National Center for Research Resources.
Co-authors reported support from the RAND-University of Pittsburgh Health Institute, the NIH's National Center for Research Resources and Institute on Aging, the Agency for Healthcare Research and Quality, and the Robert Wood Johnson Foundation Dartmouth Atlas.
- Reviewed by Robert Jasmer, MD Associate Clinical Professor of Medicine, University of California, San Francisco and Dorothy Caputo, MA, BSN, RN, Nurse Planner