Highlights
- •Most spending for prescription drugs is on branded drugs that do not have direct generic equivalents but many of these drugs do have therapeutic alternatives within class.
- •Using a microsimulation model, we demonstrate that a direct patient payment can incentivize patients to switch from a higher cost drug to a lower cost, therapeutic alternative drug, generating both patient and health plan savings.
- •Future work should integrate considerations of shared decision making, medical ethics, and treatment effect heterogeneity into these incentive programs.
Abstract
Objectives
Most spending for prescription drugs is on branded drugs that do not have direct generic
equivalents but many of these drugs do have therapeutic alternatives within class.
We estimate the potential savings from providing patients a financial incentive to
switch from a higher cost drug to a lower cost, therapeutic alternative drug.
Methods
We used individual state-transition microsimulations to model medication use and spending
with and without financial incentives over a 12-month time horizon with a healthcare
sector perspective. Costs and utilization inputs were from individuals on branded
insulins or multiple sclerosis drugs enrolled in a regional mixed-model health maintenance
organization. Base-case model used a one-time financial incentive of $83 and $250
offered to patients on higher cost insulin and multiple sclerosis treatments, respectively,
to switch to lower cost drugs within class.
Results
Savings per individual offered an incentive in the insulin and multiple sclerosis
classes were, respectively, $84 (95% CI $46-$122) and $2,127 (95% CI $267-$3,987).
Varying the incentive size and switch probability resulted in maximum savings of $712
at elasticity of 0.2 and incentive size $250 for the insulin drug class. For the multiple
sclerosis drug class, maximum savings of $5945 was at elasticity of 0.2 and incentive
size of $1000. Short time horizon makes our savings estimates conservative.
Conclusions
If programs such as financial incentives could encourage even a small proportion of
patients to switch among drugs within therapeutic class, then substantial savings
could be generated.
Keywords
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Article info
Publication history
Published online: October 01, 2021
Accepted:
August 18,
2021
Identification
Copyright
© 2021 International Society for Pharmacoeconomics and Outcomes Research, Inc. Published by Elsevier Inc.
