Estimates of Medicaid and Non-Medicaid Net Prices of Top-Selling Brand-name Drugs Incorporating Best Price Rebates, 2015 to 2019

Abstract

ImportanceThe US spends far more on brand-name prescription drugs than other comparable countries. However, studies of prescription drug spending in the US are often limited because there can be substantial differences in the confidential rebates that drug manufacturers pay to Medicaid vs other payers.ObjectivesTo demonstrate an approach for improved estimation of Medicaid rebates through case studies of 18 top-selling drugs to better understand trends in net Medicaid and non-Medicaid spending and prices for brand-name drugs.Design, Settings, and ParticipantsThis was a cross-sectional study of US pricing data from 2015 to 2019 derived from Medicaid State Drug Utilization data SSR Health, Medi-Span, the Federal Supply Schedule, and IQVIA. Pricing data for 18 top-selling brand-name drugs measured consistently in both SSR Health, which captures US sales reported by publicly traded companies, and IQVIA’s top US prescription drugs by nondiscounted spending in 2015 to 2019. Data were accessed and analyzed from January 2019 to June 2021.Main Outcomes and MeasuresGross and net Medicaid and non-Medicaid drug spending for the sample of 18 drugs and prices corresponding to a 30-day supply of medication.ResultsMedicaid aggregate gross spending for the 18 drugs in the sample increased 173%, from $3.6 billion in 2015 to $9.9 billion in 2019, and estimated net spending after discounts increased by 119%, from $1.4 billion to $3.0 billion. Medicaid inflation-linked rebates reduced average gross price per 30-day supply by an estimated 43% in 2019, and up to 67% for individual drugs. In addition to the basic rebate, the best price provision reduced the average gross price per 30-day supply by an estimated 3% in 2019 and up to 54% for individual drugs. Between 2015 and 2019 across all study drugs, estimated average non-Medicaid net 30-day prices were between 1.9 and 2.6 times higher than Medicaid net prices. Excluding adalimumab—a spending anomaly because of the entry of a new high-cost formulation—net prices weighted by average gross spending decreased annually by 1% from 2015 through 2019 for Medicaid, while increasing by 2% for non-Medicaid payers.Conclusions and RelevanceIn this cross-sectional study of 18 top-selling brand-name drugs, excluding 1 anomaly, Medicaid average net prices declined from 2015 to 2019. Simultaneously, for non-Medicaid payers, net price increased more than previously published marketwide growth rates, raising the importance of restraining drug price growth in non-Medicaid markets. Rigorous and transparent methods to estimate Medicaid discounts are imperative to understand patterns in Medicaid and non-Medicaid prices and develop policies that better align drug prices with clinical benefits.

Potential Medicare and Medicaid Savings on Anti-CD20 Therapy for Multiple Sclerosis

“…From 2018 to 2021, the annual price of ocrelizumab was more than 4 times higher than that for rituximab in Medicare ($69 949 vs $11 759 in the fourth quarter [Q4] of 2021; Figure 1A) and 8 times higher in Medicaid ($47 671 vs $5893 in 2021 Q4; Figure 1B). Prices for brand-name ocrelizumab and rituximab both decreased during this period; rituximab biosimilars were less expensive than the brand-name version in Medicare, but in Medicaid the brand-name version had lower net prices after accounting for large inflationary rebates …”

“…Prices for brand-name ocrelizumab and rituximab both decreased during this period; rituximab biosimilars were less expensive than the brand-name version in Medicare, but in Medicaid the brand-name version had lower net prices after accounting for large inflationary rebates. 2,3 From 2018 to 2021, the use of ocrelizumab increased by 35% in Medicare (from 7376 to 9924 annual treatment courses/y) and by 152% in Medicaid (from 1975 to 4972 annual treatment courses/y). During this time, ocrelizumab spending totaled $2.5 billion in Medicare and $670 million in Medicaid.…”

“…Missed savings may increase in future years as use of ocrelizumab and other expensive anti-CD20 mAbs increases while rituximab prices decrease. This study's limitations include overestimating Medicaid prices by not accounting for confidential best-price discounts, 3 not accounting for manufacturer patient assistance programs that could offset the 20% Medicare coinsurance for some patients, and not accounting for potentially more limited use of anti-CD20 immunosuppressive therapy during the COVID-19 pandemic. Ocrelizumab's high price relative to rituximab is not justified by comparative effectiveness data.…”

The Rise and Fall of the Insulin Pricing Bubble

“…As a result, this approach provided a more accurate estimate of the manufacturer rebates negotiated with commercial and Medicare Part D plans. In addition, as others have recently attempted, including a 2023 study by Clemans-Cope et al, 3 Dickson and colleagues 1 projected best price discounts when estimating Medicaid rebates, which leads to more accurate estimates of net Medicaid prices than the values provided by SSR Health. 2 Because of the secrecy of rebates, this approach is not perfect;…”

“…As a result, this approach provided a more accurate estimate of the manufacturer rebates negotiated with commercial and Medicare Part D plans. In addition, as others have recently attempted, including a 2023 study by Clemans-Cope et al, Dickson and colleagues projected best price discounts when estimating Medicaid rebates, which leads to more accurate estimates of net Medicaid prices than the values provided by SSR Health . Because of the secrecy of rebates, this approach is not perfect; Dickson and colleagues acknowledge several limitations, including the inability to disaggregate small public payers, like the Veterans Affairs Health Administration, from estimates of commercial and Medicare Part D discounts, and uncertain estimates of Medicaid best price discounts.…”