Spending and Out-of-Pocket Prices for Brand-Name Drugs Among Commercially Insured Individuals in Massachusetts, 2015-2017

This cross-sectional study analyzes data on aggregate utilization and aggregate spending by patients and by pharmacy benefit managers to pharmacies for every brand-name drug prescription dispensed to all fully insured patients and some self-insured patients with commercial insurance in Massachusetts from 2015 to 2017.


Introduction
In 2019, one-quarter of persons living in the United States younger than 65 years of age reported that it was "difficult" to afford their prescription drugs. 1 High drug costs for patients have been associated with worse medication adherence-which may lead to poor health-and with poor financial outcomes for patients. 2 Several policy proposals are considering forms of drug price regulation for the highestpriced drugs to slow the increase in drug spending. Understanding how these policies may affect the affordability of medications for patients requires evidence of actual patient out-of-pocket (OOP) prices, 3 and understanding how prescription drug prices translate into OOP prices. Affordability for patients also depends on the increase in OOP prices over time. In this study, we investigated out-ofpocket prices for brand-name drugs, growth in these prices over time, and how these prices translated into patient spending.

Methods
For this cross-sectional study, we obtained data on aggregate utilization (number of prescriptions, total days' supply) and aggregate spending by patients and by pharmacy benefit managers to pharmacies for every brand-name drug prescription (excluding specialty drugs) dispensed to all fully For each drug-year, we calculated the mean point-of-service price per 30-day prescription (ie, excluding rebates and discounts that may affect net spending), 5,6 the mean patient OOP price per 30-day prescription, and the mean patient-paid proportion of point-of-service price ("patient share"). The point-of-service price is not the manufacturer list price; it is the negotiated reimbursement price paid to the pharmacy and is used to calculate patient cost sharing. For drugs not covered by one's insurance plan (eg, those subject to a deductible), patients pay point-of-service price. We categorized drugs into quartiles based on point-of-service price. For drugs appearing in both 2015 and 2017 (66% of drugs), we measured the increase in OOP price using the compound annual growth rate.
63.9% of total spending was for drugs in the highest price quartile, and 33.0% was for drugs in the second and third quartiles ( Figure). The OOP price for patients was more than 25% of the point-ofservice price for 41.3% of drugs in the second price quartile, for 5.4% of drugs in the third quartile, and for 1.1% of the top quartile.
Across drugs, the mean OOP price per 30-day fill was $45.46, and the mean increase in OOP price from 2015 to 2017 was 43.9% (Table). For the 20 drugs with the highest OOP prices, the mean OOP price per 30-day fill ranged from $194.89 to $1937.25, and the 2015 to 2017 increase in OOP price ranged from −28% to 140%.

Discussion
Because insurance covers very high shares of the point-of-service price for the most expensive drugs to avoid exposing patients to excessive financial risk, a large portion of patient OOP spending was for drugs with moderate prices (eg, second and third quartile) and not just for drugs with high (eg,  The limitations of this cross-sectional study include that we cannot observe whether patient cost sharing is offset by coupons or copay assistance, and we cannot distinguish between when patients pay consistent OOP prices and when patients pay higher OOP prices at first and then reach their out-of-pocket maximum. Because the point-of-service price does not include rebates, our measure of patient share understates the fraction of drug cost (eg, net price) paid by patients. These findings may not be generalizable outside Massachusetts, where health insurance may be more comprehensive.
The findings of this study suggest that a policy to reduce the highest drug prices may lead to lower total spending and lower health insurance premiums, but it may not necessarily address the high OOP prices paid by many patients. Monitoring and slowing the increase in OOP spending will be important to improve patient affordability and access to prescription medications.