Medicare Part D Payments for Topical Steroids: Rising Costs and Potential Savings | Clinical Pharmacy and Pharmacology | JAMA Dermatology | JAMA Network
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Original Investigation
August 2017

Medicare Part D Payments for Topical Steroids: Rising Costs and Potential Savings

Author Affiliations
  • 1Harvard Medical School, Boston, Massachusetts
  • 2Department of Dermatology, University of North Carolina at Chapel Hilll
  • 3Department of Dermatology, Brigham and Women's Hospital, Boston, Massachusetts
JAMA Dermatol. 2017;153(8):755-759. doi:10.1001/jamadermatol.2017.1130
Key Points

Question  What are the trends, drivers, and potential modifiers of Medicare spending on topical steroids?

Findings  In this retrospective analysis of Medicare Part D claims data between 2011 and 2015, Medicare spent $2.3 billion on topical steroids; spending increased 226.5%, while prescriptions increased 37.0%. If prescribers had written for the cheapest topical steroid within the same potency class, Medicare could have saved $944.8 million.

Meaning  Medicare spending on topical steroids continues to rise, largely owing to increased medication costs for generic drugs; encouraging physicians to prescribe the cheapest topical steroids within a given potency group may decrease health care expenditures without compromising patient outcomes.

Abstract

Importance  Rising pharmaceutical costs in the United States are an increasing source of financial burden for payers and patients. Although topical steroids are among the most commonly prescribed medications in dermatology, there are limited data on steroid-related spending and utilization.

Objective  To characterize Medicare and patient out-of-pocket costs for topical steroids, and to model potential savings that could result from substitution of the cheapest topical steroid from the corresponding potency class.

Design, Setting, and Participants  This study was a retrospective cost analysis of the Medicare Part D Prescriber Public Use File, which details annual drug utilization and spending on both generic and branded drugs from 2011 to 2015 by Medicare Part D participants who filled prescriptions for topical steroids.

Main Outcomes and Measures  Total and potential Medicare and out-of-pocket patient spending. Costs were adjusted for inflation and reported in 2015 dollars.

Results  Medicare Part D expenditures on topical steroids between 2011 and 2015 were $2.3 billion. Patients’ out-of-pocket spending for topical steroids over the same period was $333.7 million. The total annual spending increased from $237.6 million to $775.9 million, an increase of 226.5%. Patients’ annual out-of-pocket spending increased from $41.4 million to $101.8 million, an increase of 145.9%. The total number of prescriptions were 7.7 million in 2011 and 10.6 million in 2015, an increase of 37.0%. Generic medication costs accounted for 97.8% of the total spending during this time period. The potential health care savings and out-of-pocket patient savings from substitution of the cheapest topical steroid within the corresponding potency class were $944.8 million and $66.6 million, respectively.

Conclusions and Relevance  Most topical steroids prescribed were generic drugs. There has been a sharp increase in Medicare and out-of-pocket spending on topical steroids that is driven by higher costs for generics. Use of clinical decision support tools to enable substitution of the most affordable generic topical steroid from the corresponding potency class may reduce drug expenditures.

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