As the U.S. grapples with rising prices for medicines, a new analysis finds Medicare spent more than $26 billion in recent years on dozens of medicines that were not recommended for coverage in three other wealthy nations because government advisory groups there found the drugs did not have sufficient value to justify the costs.
The researchers identified a total of 134 medicines that were approved by the Food and Drug Administration prior to 2016 but were not endorsed by agencies in Australia, Canada, and the U.K. that conduct so-called health technology assessments, according to the study in the Journal of General Internal Medicine.
About the Author Reprints
We appreciate the comments and interest in our study. Due to journal constraints, we were not able to include a list of the drugs studied as supplementary material with the published research article. However, we appreciate StatNews including a link to the list, now accompanying this story, for those who are interested.
There are several factors that contributed to the fact that none of the 104 drugs identified in our study that were also associated with Medicare spending received only negative recommendations from all three countries. Most prominently, NICE didn’t review many of the drugs that were reviewed by CADTH and PBAC, as it is quite selective in the drugs it appraises compared to those other agencies. Furthermore, and as we note in our paper, requested prices, medications reviewed, and decision-making processes vary among the HTA agencies and recommendations are adapted to each country’s social and population needs; thus, decisions may not translate to US Medicare. That said, we were not attempting to identify a country with a health technology assessment agency we should trust, but to contrast how coverage decisions are made, and the use of health technology assessments, in Australia, Canada and England to the U.S.
To the point that our study is supposedly misleading, because part D has private companies (PBMs) that have not covered many of the drugs included in our study, we would simply remind readers that we used CMS spending data. Given that billions of dollars were spent by Medicare over this period, our study suggests that PBMs, or at least many of them, did not ‘block’ or exclude these drugs from their formularies.
Finally, to the point that we did not account for manufacturer rebates or discounts, we agree this is a limitation. We explicitly noted this limitation in our article, as this information is treated as confidential by companies and not made available to researchers. Nevertheless, based on information published by CMS on rebates in 2014, the highest rebate % for any drug class was 26.3%. Even if the rebate % is higher for every drug included in our study, our results still suggest that Medicare is still spending multiple billions of dollars on drugs that lacked sufficient evidence of efficacy and/or value to support coverage in Australia, Canada, or England.
Alex Egilman and Joseph Ross, MD, MHS
Ok, I see that Ed added a link to the specific drugs. Sorry I missed it. (Note: List of drugs is not included in journal article.)
That said, none of the 134 drugs were excluded by all three countries. What does that say about cost-effectiveness research? Which country should we trust?
Study is highly misleading, because part D has private companies (PBMs) that have blocked many of the drugs, e.g. PCSK9 inhibitors.
Also, savings figure is bogus, because rebates and discounts are excluded.
Highly misleading. Impossible to evaluate authors’ claims, because the paper doesn’t disclose which drugs were not covered in the other countries.
Also, spending estimates ignore rebates and other discounts, so $26 billion figures is bogus.
Hi Ed,
How can I see the list of drugs that were part of this analysis?
Thank you
Hi John,
I’ve added a link in the fourth paragraph. Look for the words ‘drugs examined,’ which are now highlighted and click there.
ed at pharmalot
Since the medicines aren’t named in the article, they are probably oncology drugs such as Avastin or therapies for rare diseases.
Never underestimate the will of social democrats to kill off your loved ones, if that’s what it takes to get full political control over your health.
Hi Lazarus,
Thanks for your note. Actually, most of the drugs examined as part of the analysis were covered by Medicare Part D, which I neglected to note initially, but have now done so.
Sorry to burst your bubble.
ed at pharmalot
You say I have a log in and I want a free trial for a month to read this article, but I cannot read the article. What is going on and what should I do?