Diabetes drug spending declines with greater use of generics

April 17, 2014

Health plans focus on reduced drug copays eases patients’ financial burden

While more of your patients may have diabetes, the good news is that they are probably spending less on prescription medications to treat the disease and its associated conditions, thanks largely to the greater availability of generic drugs.

Results of a study published recently in The American Journal of Managed Care show that out-of-pocket spending for patients with diabetes decreased from $1,095 during the years 2001 to 2003 to $763 during the years 2007 to2009, a drop of more than 30%. Generic drugs accounted for 46.9% of all diabetes-related prescriptions between 2005 and2006, compared with 52.9% between 2007 and2009.

Data on brand-name versus generic drugs was not available prior to 2005 in the Medical Expenditure Panel Survey, Household Component, from which the authors drew their data.

Partly as a result of the reduced spending on medications, the percentage of patients with diabetes with “high financial burden”-defined as the ratio of total out-of-pocket spending on health services and health insurance premiums to total family income-decreased from 23.9% during the 2001 to 2003 period to18.6% during the 2007 to 2009 period

The authors cite data from the Centers for Disease Control and Prevention showing that in 2007 the direct medical costs associated with diabetes were estimated at $116 billion. Average medical expenditures for people with diabetes are about 2.3 times higher than patients without diabetes, in part due to complications leading to other health problems such as stroke and kidney disease.  

The trend towards value-based benefits among health insurance plans may also be contributing to the decrease in spending, the authors note. Examples include reduced copayments associated with medications used for treating diabetes and certain other conditions. and the growing use of multiple copayment tiers by employer-sponsored insurance plans that are designed to encourage the use of generics and/or medications important for preventive care.

The study did not look at whether lessening the financial burden of treating diabetes led to improved access to care and treatment, but the authors note that “trends in prescription drug use and access are consistent with increased affordability,” and that “lowering the costs of diabetes drugs has been shown to decrease…patients’ costs and utilization overall, including rates of emergency department visits.”

In addition, they say, other studies have shown a strong relationship between the financial stress caused by high levels of out-of-pocket spending and postponing or foregoing needed care.