In 2016, the total reported spending on brand-name olmesartan (Benicar, Daiichi Sankyo) by Medicare Part D was $437.6 million, exclusive of potential rebates (horizontal blue line). For comparison, the projected amounts spent by Medicare Part D in 2016 in the cases of therapeutic interchange with generic losartan and candesartan, with 25%, 50%, 75%, and 100% uptake of the generic drug are depicted by the bars. In 2016, Medicare Part D reported average costs per dose unit weighted to account for variation in claims volume and strength of $0.16 and $2.06 for generic losartan (24 manufacturers) and candesartan (4 manufacturers), respectively; the cost per dose unit of brand-name olmesartan was $6.44.
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Growdon ME, Sacks CA, Kesselheim AS, Avorn J. Potential Medicare Savings From Generic Substitution and Therapeutic Interchange of ACE Inhibitors and Angiotensin-II-Receptor Blockers. JAMA Intern Med. 2019;179(12):1712–1714. doi:10.1001/jamainternmed.2019.3107
Prescription drug spending accounts for an increasing share of US health care costs.1 Spending can be decreased by substituting generic drugs for identical brand-name drugs (generic substitution) or for brand-name drugs with similar effect (therapeutic interchange).2 We estimated the potential cost savings for Medicare from generic substitution and therapeutic interchange of angiotensin converting enzyme inhibitors (ACEIs) and angiotensin-II-receptor blockers (ARBs).
Using the Medicare Part D Prescription Drug Event data set,3 we identified expenditures in 2016 and 2017 for brand-name tablet or capsule ACEIs or ARBs, excluding combination products, and compared them with what the program would have spent on identical or therapeutically similar generic products. For brand-name ARBs without identical generic equivalents, the generic drugs losartan and candesartan were considered therapeutically interchangeable. With sensitivity analyses, we considered possible manufacturer rebates on branded products of 0%, 26.3%,3 and 38.0%.2 We used a medical care inflation rate of 2.5% from the US Bureau of Labor Statistics to adjust prices to 2017 values. Data analysis was performed from March 20, 2019, to April 9, 2019.
In 2016 and 2017, prescriptions for brand-name ACEIs that had identical generic substitutes were filled by 8694 and 7567 Medicare Part D beneficiaries respectively, costing $21.3 million in 2016 and $20.9 million in 2017 (Table). In 2016 and 2017, prescriptions for brand-name ARBs that had generic substitutes were filled by 49 396 and 116 551 beneficiaries, respectively costing $63.6 million and $165.2 million. In 2016, potential savings from generic substitution were $20.6 million for ACEIs and $54.2 million for ARBs; with rebates of 26.3% or 38.0%, potential savings were $12 million to $15 million and $30 million to $38 million, respectively. In 2017, potential savings were $20.4 million for ACEIs and $109.9 million for ARBs; with the same rebate assumptions, potential savings were $12 million to $15 million and $47 million to $66 million, respectively.
In 2016, 287 016 Medicare Part D beneficiaries filled prescriptions for brand-name ARBs without identical generic alternatives available at the start of the year, costing $452.2 million. In 2017, with the availability of generic olmesartan, 13 588 beneficiaries still filled prescriptions for brand-name ARBs, costing $17.1 million. Potential savings attributable to therapeutic interchange in 2016 were $269 million to $441 million when substituting with losartan and $134 million to $306 million when substituting with candesartan, depending on the rebate (38% vs 0%). In 2017, the potential savings attributable to interchange of azilsartan (Edarbi, Arbor Pharmaceuticals) were $10 million to $17 million when substituting with losartan and $4 million to $11 million when substituting with candesartan, with the same rebate estimates. Potential savings in 2016 were $105 million to $426 million for interchange of olmesartan (Benicar, Daiichi Sankyo) with losartan and $73 million to $297 million with candesartan, depending on the extent of generic drug uptake (Figure).
By maximizing generic substitution and therapeutic interchange, Medicare could have saved approximately $676 million (89.6%) in 2016 and 2017 of the total $754 million spent on these brand-name ACEIs and ARBs during those 2 years ($537 million in 2016 and $203 million in 2017),3 excluding possible manufacturer rebates. Clinical guidelines for treating patients with hypertension and heart failure do not recommend a particular ACEI or ARB,4 and there is little evidence of differences in outcomes between medications. Thus, such cost-containment strategies would be clinically appropriate.
To encourage cost-effective prescribing, Medicare Part D plan administrators use tiered formularies in which generic drugs have lower out-of-pocket costs. State laws vary: 20 states mandate pharmacy-driven generic substitution, but others do not1; therapeutic interchange by pharmacists is permitted under limited circumstances in Arkansas, Idaho, and Kentucky.5 Additionally, despite its safety in appropriate circumstances, some physician groups oppose therapeutic interchange.2 Achieving the savings estimated here and in an earlier study by Sacks et al6 would require action by Medicare Part D plans, regulatory changes by Medicare, state laws removing barriers to generic substitution and therapeutic interchange, and better clinician education about the benefits of generic substitution and therapeutic interchange.
The present study was limited to Medicare Part D; prescribing patterns, prices, and rebates for other insurers may vary. These findings underscore the value of generic substitution and therapeutic interchange as strategies to contain rising prescription drug costs.
Accepted for Publication: June 5, 2019.
Corresponding Author: Matthew E. Growdon, MD, MPH, Division of Pharmacoepidemiology and Pharmacoeconomics, Brigham and Women’s Hospital, 1620 Tremont St, Ste 3030, Boston, MA 02120 (email@example.com).
Published Online: August 5, 2019. doi:10.1001/jamainternmed.2019.3107
Author Contributions: Dr Growdon had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.
Study concept and design: Growdon, Sacks, Avorn.
Acquisition, analysis, or interpretation of data: All authors.
Drafting of the manuscript: Growdon.
Critical revision of the manuscript for important intellectual content: Sacks, Kesselheim, Avorn.
Statistical analysis: Growdon, Avorn.
Obtained funding: Kesselheim, Avorn.
Administrative, technical, or material support: Avorn.
Study supervision: Kesselheim, Avorn.
Conflict of Interest Disclosures: None reported.
Funding/Support: Work at PORTAL is supported by Arnold Ventures, with additional support from the Engelberg Foundation and Harvard-MIT Center for Regulatory Science. Dr Sacks also receives support from the Carney Family Foundation.
Role of the Funder/Sponsor: Arnold Ventures, the Engelberg Foundation, the Harvard-MIT Center for Regulatory Science, and the Carney Family Foundation had no roles in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.