The Impact of Differential Cost Sharing of Non-Steroidal Anti-Inflammatory Agents on the Use and Costs of Analgesic Drugs

OBJECTIVE: To estimate the effect of differential cost sharing (DCS) schemes for non-steroidal anti-inflammatory drugs (NSAIDs) on drug subsidy program and beneficiary expenditures. DATA SOURCES/STUDY SETTING: Monthly aggregate claims data from Pharmacare, the public drug subsidy program for seniors in British Columbia, Canada over the period 1989-11 to 2001-06. STUDY DESIGN: DCS limits insurance reimbursement of a group of therapeutically similar drugs to the cost of the lowest priced drugs, with beneficiaries responsible for costs above the reimbursement limit. Pharmacare introduced two different forms of DCS, generic substitution (GS) and reference pricing (RP), in April 1994 and November 1995, respectively, to the NSAIDs. Under GS, generic and brand versions of the same NSAID are considered interchangeable, whereas under RP different NSAIDs are. We extrapolated average reimbursement per day of NSAID therapy over the months before GS and RP to estimate what expenditures would have been without the policies. These counterfactual predictions were compared to actual values to estimate the impact of the policies; the estimated impacts on reimbursement rates were multiplied by the post-policy volume of NSAIDS dispensed, which appeared unaffected by the policies, to estimate expenditure changes. DATA COLLECTION: The cleaned NSAID claims data, obtained from Pharmacare’s databases, were aggregated by month and by their reimbursement status under the GS and RP policies. PRINCIPAL FINDINGS: After RP, program expenditures declined by $22.7 million, or$4 million annually, cutting expenditure by half. Most savings accrued from the substitution of low cost NSAIDs for more costly alternatives. About 20% of savings represented expenditures by seniors who elected to pay for partially-reimbursed drugs. GS produced one quarter the savings of RP. CONCLUSIONS: RP of NSAIDs achieved its goal of reducing drug expenditures and was more effective than GS. The effects of RP on patient health and associated health care costs remain to be investigated.Reference pricing; generic substitution; prescription drugs; drug cost containment; NSAIDs.

Utility values for symptomatic non-severe hypoglycaemia elicited from persons with and without diabetes in Canada and the United Kingdom

<p>Abstract</p> <p>Objective</p> <p>To elicit societal and patient utilities associated with diabetic symptomatic non-severe hypoglycaemia for three health states: 1) rare (quarterly), 2) intermittent (monthly), 3) and frequent (weekly) hypoglycaemia episodes.</p> <p>Methods</p> <p>Using validated health states, time trade-off utilities were elicited from 51 Canadian respondents with diabetes, and 79 respondents in Canada and 75 respondents in the United Kingdom (UK) without diabetes.</p> <p>Results and discussion</p> <p>Each hypoglycaemic episode was associated with a reduction in utility and persons with diabetes consistently reported slightly higher utility values than respondents without diabetes. The utility for diabetes without hypoglycaemia ranged from 0.88 to 0.97, the mean utility for rare hypoglycaemic events (quarterly) ranged between 0.85 and 0.94. The utility for the intermittent state (monthly) ranged from 0.77 to 0.90 and from 0.66 to 0.0.83 for the frequent state (weekly). Differences were observed between respondents without diabetes in Canada and the UK. Using a multivariate linear OLS regression, the estimated utilities associated with a single hypoglycaemic event were -0.0033 and -0.0032 for respondents with diabetes and without diabetes, respectively.</p> <p>Conclusion</p> <p>Among respondents with and without diabetes, there was a demonstrable utility loss associated with hypoglycaemia. Considering a utility loss of 0.03 as a minimum clinically important difference for persons with diabetes, the evidence from this study indicates that as low as ten symptomatic non-severe hypoglycaemic episodes per year may be of clinical importance and that the importance increases with frequency of episodes. Integrating directly elicited utility values such as those reported here will improve the quality and applicability of economic evaluations of diabetes treatment.</p

Covariate balance in a Bayesian propensity score analysis of beta blocker therapy in heart failure patients

Regression adjustment for the propensity score is a statistical method that reduces confounding from measured variables in observational data. A Bayesian propensity score analysis extends this idea by using simultaneous estimation of the propensity scores and the treatment effect. In this article, we conduct an empirical investigation of the performance of Bayesian propensity scores in the context of an observational study of the effectiveness of beta-blocker therapy in heart failure patients. We study the balancing properties of the estimated propensity scores. Traditional Frequentist propensity scores focus attention on balancing covariates that are strongly associated with treatment. In contrast, we demonstrate that Bayesian propensity scores can be used to balance the association between covariates and the outcome. This balancing property has the effect of reducing confounding bias because it reduces the degree to which covariates are outcome risk factors

The Impact of Reference Pricing of Cardiovascular Drugs on Health Care Costs and Health Outcomes: Evidence from British Columbia -- Volume II: Technical Report

(see QSEP 369 for abstract)reference pricing,prescription drugs,ACE inhibitors,calcium channel blockers,nitrates,pharmaceutical cost control,seniors,user fees

The Impact of Reference Pricing of Cardiovascular Drugs on Health Care Costs and Health Outcomes: Evidence from British Columbia -- Volume I: Summary

Objective: We estimate the effects of Reference Pricing, a drug cost control policy introduced by the BC Ministry of Health Pharmacare program in 1995, on its program expenditures for seniors, out of pocket costs paid by its senior beneficiaries, indicators of beneficiary health status and attendant Ministry of Health expenditures on physicians and hospitals services. Rationale: Reference pricing (RP) limits the reimbursement of a group of drugs with similar therapeutic effect but different active ingredients to a fixed "reference price". The setting of the reference price varies by jurisdiction but typically is based on an average of the lowest cost "reference standard" drugs within the group. Critics of RP contend that the partially subsidized and fully subsidized (reference standard) drugs are not therapeutically interchangeable, and therefore patient health will be compromised and use of other non-pharmacologic health services may increase as a result, thus partially or wholly offsetting any potential cost savings from the policy. Findings: The application of RP to 3 groups of cardiac drugs produced annualized savings to Pharmacare of about $7.7 million, or 3.6$213.7 million that Pharmacare spent on drugs for seniors (not including dispensing fees) in 1997. The additional costs for physician consultations were modest, around $500,000 in the subsample of seniors we studied, from the introduction of the RP plans to March 1998, although the costs could be greater, perhaps up to twice this amount, if we accounted for all seniors exposed to the RP over the same period. We found no effects of RP on mortality, or premature admission to a longterm care facility. Seniors using the nitrate drugs for angina that were no longer fully subsidized when RP was introduced faced a higher probability in the short run of using medicines to deal with acute exacerbations of angina and in the longer run having bypass surgery or other revascularization procedures. No long run effects of morbidity were observed for the application of RP to two different types of anti-hypertensive medications, although there was a short run increase in the rate of revascularizations among those taking 1 type of anti-hypertensive: the ACE inhibitors. The results of these morbidity models should be seen as tentative, until these results can be replicated using alternative estimation strategies. Conclusions: The introduction of RP can indeed reduce Ministry of Health drug expenditures. The effects of RP on patient morbidity remain to be fully investigated before definitive policy recommendations can be offered.reference pricing,prescription drugs,ACE inhibitors,calcium channel blockers,nitrates,pharmaceutical cost control,seniors,user fees

The Impact of Reference Pricing of Cardiovascular Drugs on Health Care Costs and Health Outcomes: Evidence from British Columbia--Volume I: Summary

Objective: We estimate the effects of Reference Pricing, a drug cost control policy introduced by the BC Ministry of Health Pharmacare program in 1995, on its program expenditures for seniors, out of pocket costs paid by its senior beneficiaries, indicators of beneficiary health status and attendant Ministry of Health expenditures on physicians and hospitals services. Rationale: Reference pricing (RP) limits the reimbursement of a group of drugs with similar therapeutic effect but different active ingredients to a fixed "reference price". The setting of the reference price varies by jurisdiction but typically is based on an average of the lowest cost "reference standard" drugs within the group. Critics of RP contend that the partially subsidized and fully subsidized (reference standard) drugs are not therapeutically interchangeable, and therefore patient health will be compromised and use of other non-pharmacologic health services may increase as a result, thus partially or wholly offsetting any potential cost savings from the policy. Findings: The application of RP to 3 groups of cardiac drugs produced annualized savings to Pharmacare of about $7.7 million, or 3.6$213.7 million that Pharmacare spent on drugs for seniors (not including dispensing fees) in 1997. The additional costs for physician consultations were modest, around $500,000 in the subsample of seniors we studied, from the introduction of the RP plans to March 1998, although the costs could be greater, perhaps up to twice this amount, if we accounted for all seniors exposed to the RP over the same period. We found no effects of RP on mortality, or premature admission to a longterm care facility. Seniors using the nitrate drugs for angina that were no longer fully subsidized when RP was introduced faced a higher probability in the short run of using medicines to deal with acute exacerbations of angina and in the longer run having bypass surgery or other revascularization procedures. No long run effects of morbidity were observed for the application of RP to two different types of anti-hypertensive medications, although there was a short run increase in the rate of revascularizations among those taking 1 type of anti-hypertensive: the ACE inhibitors. The results of these morbidity models should be seen as tentative, until these results can be replicated using alternative estimation strategies. Conclusions: The introduction of RP can indeed reduce Ministry of Health drug expenditures. The effects of RP on patient morbidity remain to be fully investigated before definitive policy recommendations can be offered.reference pricing,prescription drugs,ACE inhibitors,calcium channel blockers,nitrates,pharmaceutical cost control,seniors,user fees

The Impact of Reference Pricing of Cardiovascular Drugs on Health Care Costs and Health Outcomes: Evidence from British Columbia--Volume II: Technical Report

(see SEDAP 70 for abstract)reference pricing,prescription drugs,ACE inhibitors,calcium channel blockers,nitrates,pharmaceutical cost control,seniors,user fees

Joint Assessment of Intended and Unintended Effects of Medications: An Example Using Vascular Endothelial Growth Factor Inhibitors for Neovascular Age-Related Macular Degeneration

Objective. To estimate the net health benefits of pegaptanib and ranibizumab by considering the impact of visual acuity and unintended effects (cardiovascular and hemorrhagic events) on quality-of-life among persons with neovascular age-related macular degeneration. Methods. We designed a probabilistic decision-analytic model using published data. It employed 17 visual health states and three for unintended effects. We calculated incremental net health benefits by subtracting the harms of each medication from the benefit using the quality-adjusted life year (QALY). Results. In a hypothetical cohort of 1,000 75-year olds with new-onset bilateral age-related macular degeneration followed for ten years, the mean QALYs per patient is 3.7 for usual care, 4.2 for pegaptanib, and 4.3 for ranibizumab. Net benefits decline with increasing baseline rates of unintended effects. Interpretation. Net health benefits present a quantitative, potentially useful tool to assist patients and ophthalmologists in balancing the benefits and harms of interventions for age-related macular degeneration

Value at Risk models with long memory features and their economic performance

We study alternative dynamics for Value at Risk (VaR) that incorporate a slow moving component and information on recent aggregate returns in established quantile (auto) regression models. These models are compared on their economic performance, and also on metrics of first-order importance such as violation ratios. By better economic performance, we mean that changes in the VaR forecasts should have a lower variance to reduce transaction costs and should lead to lower exceedance sizes without raising the average level of the VaR. We find that, in combination with a targeted estimation strategy, our proposed models lead to improved performance in both statistical and economic terms