Correlation Between Changes in Brand-Name Drug Prices and Patient Out-of-Pocket Costs

Citation:

Rome BN, Feldman WB, Desai RJ, Kesselheim AS. Correlation Between Changes in Brand-Name Drug Prices and Patient Out-of-Pocket Costs. JAMA Netw Open 2021;4(5):e218816.

Date Published:

2021 05 03

Abstract:

Importance: List prices set by manufacturers for brand-name prescription drugs in the US have been increasing faster than inflation, although confidential manufacturer rebates offset some of these increases. Most commercially insured patients pay at least some out-of-pocket costs for prescription drugs, and higher patient spending is associated with lower adherence and worse health outcomes. Objective: To examine whether price changes for brand-name drugs are correlated with changes in patient out-of-pocket spending and whether this association varies by insurance benefit design. Design, Setting, and Participants: A cohort study of 79 brand-name drugs with available pricing data from January 2015 to December 2017 was conducted, with data obtained from a national commercial insurance claims database. Exposures: Change in the list prices set by manufacturers and estimated net prices after rebates among non-Medicaid payers. Main Outcomes and Measures: Change in median out-of-pocket spending among all patients and stratified by insurance pharmacy benefit design, including high-deductible insurance plans and plans with any amount of deductibles or coinsurance. Results: Among 79 drugs, median increases were 16.7% (interquartile range [IQR], 13.6%-21.1%) for list prices, 5.4% (IQR, -3.9% to 11.7%) for net prices, and 3.5% (IQR, 1.4%-9.1%) for out-of-pocket spending from 2015 to 2017. Changes in list prices were correlated with changes in net prices (r = 0.34; P = .002). Overall, changes in out-of-pocket spending were not correlated with changes in list prices (r = 0.14; P = .22) or net prices (r = 0.04; P = .71). Among 53.7% of patients who paid any drug deductible or coinsurance, median out-of-pocket spending increased by 15.0%, and changes were moderately correlated with changes in list prices (r = 0.38; P = .001) but not net prices (r = 0.06; P = .62). Conclusions and Relevance: Some commercially insured patients who pay only prescription drug copayments appear to be insulated from increases in drug prices. However, more than half of patients pay deductibles or coinsurance and may experience substantial increases in out-of-pocket spending when drug prices increase. Among these patients, there was no evidence that manufacturer rebates to insurers are associated with patients' out-of-pocket spending. Policies to rein in unregulated annual increases in list prices for brand-name drugs may have important consequences for patient out-of-pocket spending.
Last updated on 06/19/2022