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Report: Medicare Spends Too Much on Brand-Name Diabetes Drugs

Unnecessary spending topped $1 billion in single year (June 11)

A new study led by the Center for Health Equity Research and Promotion (CHERP) of the U.S. Department of Veterans Affairs (VA) has found that Medicare Part D beneficiaries are two to three times more likely than those covered by the VA to be prescribed brand-name diabetes drugs instead of generics.

Because the branded drugs don’t seem to be more effective than their generic counterparts, the researchers say that the extra $1.4 billion that Medicare spent on those treatments in 2008 may not have led to improved patient health.

Medicare Part D and the VA use different approaches to manage prescription drug benefits, with implications for spending. Medicare relies on private plans with distinct formularies, whereas the VA administers its own benefit using a national formulary.

In the retrospective cohort study, the researchers used data from 2008 to compare overall and regional rates of brand-name drug use in 1,061,095 Medicare Part D beneficiaries and 510,485 veterans aged 65 years or older with diabetes.

The investigators measured the percentage of patients taking oral hypoglycemics, statins, and angiotensin-converting enzyme (ACE) inhibitors or angiotensin receptor blockers (ARBs) who filled brand-name drug prescriptions and the percentage of patients taking long-acting insulin who filled analogue prescriptions.

They found that brand-name drug use in Medicare was two to three times higher than that in the VA: 35.3% versus 12.7%, respectively, for oral hypoglycemics; 50.7% versus 18.2% for statins; 42.5% versus 20.8% for ACE inhibitors or ARBs; and 75.1% versus 27.0% for insulin analogues.

“Medicare spending in this population would have been $1.4 billion less if brand-name drug use matched that of the VA,” the authors reported.

According to lead investigator Dr. Walid Gellad, all VA benefits are managed by the same pharmacy company, and doctors must justify why they are prescribing a brand-name drug before the prescription will be filled. That means patients typically get a branded version only if there is no close generic equivalent, or if they have already tried multiple generics and had side effects or didn’t get better.

Sources: Annals of Internal Medicine; June 11, 2013; and Reuters; June 10, 2013.

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