Medicare Part D Spending on Single-Enantiomer Drugs Versus Their Racemic Precursors
Authors: Alexander C. Egilman, Audrey D. Zhang, Joshua D. Wallach, Joseph S. Ross
Journal: Annals of Internal Medicine (2019)

Letters1 October 2019Medicare Part D Spending on Single-Enantiomer Drugs Versus Their Racemic PrecursorsFREEAlexander C. Egilman, BA, Audrey D. Zhang, AB, Joshua D. Wallach, PhD, MS, and Joseph S. Ross, MD, MHSAlexander C. Egilman, BACenter for Outcomes Research and Evaluation, Yale-New Haven Health System, and the Collaboration for Research Integrity and Transparency, Yale Law School, New Haven, Connecticut (A.C.E.), Audrey D. Zhang, ABNew York University School of Medicine, New York, New York (A.D.Z.), Joshua D. Wallach, PhD, MSYale School of Public Health and the Collaboration for Research Integrity and Transparency, Yale Law School, New Haven, Connecticut (J.D.W.), and Joseph S. Ross, MD, MHSYale School of Medicine, Yale School of Public Health, and the Center for Outcomes Research and Evaluation, Yale-New Haven Health System, New Haven, Connecticut (J.S.R.)Author, Article, and Disclosure Informationhttps://doi.org/10.7326/M19-1085 SectionsAboutVisual AbstractPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissions ShareFacebookTwitterLinkedInRedditEmail Background: Chiral switching is a commercial strategy in which manufacturers develop a single-enantiomer drug that can be substituted for its already-marketed racemic version (a 50:50 mixture of 2 enantiomers), such as esomeprazole (isolated S-omeprazole) for omeprazole (R- and S-omeprazole). The utility of single-enantiomer drugs remains controversial, as some claim they offer efficacy and safety benefits, whereas others claim they offer marginal, or no, therapeutic advantage (1). During U.S. Food and Drug Administration (FDA) regulatory approval, most single-enantiomer drugs are not directly compared with their racemic precursor, and when they are, there is no evidence of patient benefit (1). Product-specific reviews comparing single-enantiomer drugs with their racemic precursors, such as esomeprazole to omeprazole, have also found marginal, if any, therapeutic differences (2). Manufacturers frequently bring single-enantiomer drugs to market shortly before their racemic precursors are eligible for generic competition, establishing new, patent-protected drugs that may retain profitability.Objective: To estimate the potential savings associated with using racemic precursors instead of their single-enantiomer versions to the Medicare Part D drug benefit program and its beneficiaries.Methods and Findings: We searched the [email protected] database using the U.S. Adopted Name prefixes (lev-, dex-, ar-, and es-) assigned to drugs with a single-enantiomer formulation to identify all new, single-enantiomer drugs originating from a racemic precursor previously approved by the FDA, limiting the sample to those for which racemic precursors were available in the same formulation. We used Medicare Part D drug use and spending data to determine Medicare (from 2011 to 2017) and beneficiary out-of-pocket (from 2011 to 2015) spending on single-enantiomer drugs, capturing the most recent periods for which data were available (3). To determine savings, we subtracted estimated Medicare and beneficiary spending using average annual Medicare spending per user and average annual beneficiary cost share, respectively, if racemic precursors had been substituted, prioritizing generic substitution when available. Using a previously described approach (4), we performed sensitivity analyses to estimate the effect of rebates, which manufacturers sometimes provide to payers for branded drugs to offset higher prices, on Medicare spending. All calculations were performed using Excel, version 15.28 (Microsoft).We identified 12 single-enantiomer drugs with FDA-approved racemic precursors that had associated Medicare spending. Two (Brovana [Sunovion] and Fetzima [Allergan]) did not have generic versions of the racemic precursor available during the study period. Between 2011 and 2017, Medicare Part D spending on these 12 single-enantiomer drugs totaled $19.3 billion (Table 1). If racemic precursors had been substituted, Medicare could have saved $16.6 billion ($112.43 per prescription). If manufacturers had paid the average rebate rate of 17.5% reported by Medicare for all brand-name drugs in 2014 or the highest rebate rate of 26.3% reported by Medicare for any therapeutic class in 2014, then $13.7 billion and $12.2 billion could have been saved, respectively. Between 2011 and 2015, Medicare Part D beneficiaries filled 104.3 million prescriptions for these 12 single-enantiomer drugs, spending $1.6 billion out of pocket (Table 2). If racemic precursors had been substituted, they could have saved $1.1 billion ($11.02 per prescription).Table 1. Medicare Part D Spending on Single-Enantiomer Drugs and Estimated Potential Reduction in Spending by Substituting Their Racemic Precursors, 2011–2017Table 2. Medicare Part D Beneficiary Spending on Single-Enantiomer Drugs and Estimated Potential Reduction in Spending by Substituting Their Racemic Precursors, 2011–2015Discussion: Between 2011 and 2017, Medicare and its beneficiaries could have saved $17.7 billion through substitution of 12 single-enantiomer drugs with their racemic precursors. However, substitution of armodafinil for modafinil would have actually increased Medicare spending. Notably, substitution of esomeprazole for omeprazole accounted for more than three quarters of the total estimated savings, and approval of generic esomeprazole in January 2015 contributed to an approximate 20% decline in total savings from 2015 to 2017 compared with 2012 to 2014. Our analysis was limited to a 7-year period (5-year period for beneficiary spending), which is only a partial amount of the time that these drugs have been available, and does not take spending by Medicare Advantage plans into consideration. Second, we could not account for actual rebates, which for some branded drugs (including esomeprazole), may be substantially higher than 26.3%, the highest rebate reported by Medicare for any therapeutic class in 2014. Third, we assumed that there was complete substitution of racemic precursors, although patient-specific risk–benefit considerations will influence drug choice, and not all substitutions would be clinically appropriate. Finally, savings vary depending on several factors, such as beneficiary income status and Part D plan benefit structure, as well as future market entry of generic single-enantiomer drugs. Nevertheless, while $17.7 billion is only 2.1% of total Medicare Part D spending from 2011 to 2017, our findings suggest that racemic substitution for single-enantiomer drugs offers an opportunity for Medicare drug savings. Formulary management tools, such as exclusion lists (5), could also be used until the benefits of newly approved, patent-protected, single-enantiomer drugs are demonstrated through rigorous, high-quality studies.References1. Gellad WF, Choi P, Mizah M, et al. Assessing the chiral switch: approval and use of single-enantiomer drugs, 2001 to 2011. Am J Manag Care. 2014;20:e90-7. [PMID: 24773330] MedlineGoogle Scholar2. Asghar W, Pittman E, Jamali F. Comparative efficacy of esomeprazole and omeprazole: racemate to single enantiomer switch. Daru. 2015;23:50. [PMID: 26573220] doi:10.1186/s40199-015-0133-6 CrossrefMedlineGoogle Scholar3. Centers for Medicare & Medicaid Services. Medicare Part D Drug Spending Dashboard and data. Accessed at www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Information-on-Prescription-Drugs/MedicarePartD.html on 3 June 2019. Google Scholar4. Sacks CA, Lee CC, Kesselheim AS, et al. Medicare spending on brand-name combination medications vs their generic constituents. JAMA. 2018;320:650-6. [PMID: 30140875] doi:10.1001/jama.2018.11439 CrossrefMedlineGoogle Scholar5. Egilman AC, Wallach JD, Ross JS, et al. Medicare spending and potential savings on brand-name drugs with available generic substitutes excluded by 2 large pharmacy benefit managers, 2012 through 2015. JAMA Intern Med. 2018;178:567-9. [PMID: 29340562] doi:10.1001/jamainternmed.2017.8016 CrossrefMedlineGoogle Scholar Comments0 CommentsSign In to Submit A Comment Author, Article, and Disclosure InformationAffiliations: Center for Outcomes Research and Evaluation, Yale-New Haven Health System, and the Collaboration for Research Integrity and Transparency, Yale Law School, New Haven, Connecticut (A.C.E.)New York University School of Medicine, New York, New York (A.D.Z.)Yale School of Public Health and the Collaboration for Research Integrity and Transparency, Yale Law School, New Haven, Connecticut (J.D.W.)Yale School of Medicine, Yale School of Public Health, and the Center for Outcomes Research and Evaluation, Yale-New Haven Health System, New Haven, Connecticut (J.S.R.)Financial Support: This project was conducted as part of the Collaboration for Research Integrity and Transparency at Yale Law School, funded by the Laura and John Arnold Foundation, which supports Mr. Egilman, Ms. Zhang, and Drs. Wallach and Ross. The Laura and John Arnold Foundation played no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication. The authors assume full responsibility for the accuracy and completeness of the ideas presented, which do not represent the views of any supporting institutions.Disclosures: Disclosures can be viewed at www.acponline.org/authors/icmje/ConflictOfInterestForms.do?msNum=M19-1085.Reproducible Research Statement: Study protocol and statistical code: Not available. Data set: Available from Dr. Ross (e-mail, joseph.[email protected]edu).This article was published at Annals.org on 13 August 2019. PreviousarticleNextarticle Advertisement FiguresReferencesRelatedDetails Metrics Cited byChiral Resolution, Absolute Configuration Assignment, and Genotoxicity Evaluation of Racemic 3,4-Dihydroquinazoline as a Novel Anticancer AgentEstimating Rebates and Other Discounts Received by Medicare Part DFDA Approval and Regulation of Pharmaceuticals, 1983-2018 1 October 2019Volume 171, Issue 7Page: 521-523KeywordsDecision analysisDisclosureDrug administrationDrug pricesDrug safetyDrugsFood and Drug AdministrationForecastingMedicareSafety ePublished: 13 August 2019 Issue Published: 1 October 2019 Copyright & PermissionsCopyright © 2019 by American College of Physicians. All Rights Reserved.PDF downloadLoading ...