AJMC Report Confirms Most Drugs Dispensed in ‘Protected Classes’ Are Generics

A recent paper in the American Journal of Managed Care confirms that patients who are prescribed medications in Medicare’s “six protected classes” are consistently utilizing lower-cost generics, despite arguments from insurance companies who have said they have limited tools to contain costs for these treatments. Indeed, the authors concluded that generic dispensing rates (GDR) in the protected classes are often much higher than their non-protected counterparts — and are at least consistent with the dispensing rates among other classes of drugs. In fact, the paper suggests that plans that dispense generics at a lower rate do so to capture larger rebates from drug manufacturers, rather than to maximize access for their beneficiaries and minimize what they would pay out-of-pocket.

​The team of researchers, composed of experts from the RAND Corporation, IQVIA, the University of Southern California, and the Schaeffer Center for Health Policy & Economics, found that GDRs for the protected classes studied are well in line with prescription drugs in general. They studied 10 classes of drugs, including three of the six protected classes — antidepressants, anticonvulsants, and antineoplastics. In 2016, standalone Part D plans (PDP) had an overall GDR of 88 percent and Medicare Advantage Prescription Drug (MAPD) plans had a GDR of 90 percent, respectively. Antidepressants, the researchers found, had GDRs of between 97 and 99 percent in most plans, antineoplastics had GDRs of between 81 percent and 88 percent, and anticonvulsants between 88 and 94 percent.
 
The variation between plans may be due to payers preferring non-generic drugs in some cases — in fact, the researchers write, the variation may strongly suggest that they are doing so to seek rebates, while patients pay cost-sharing based on the full price of the drug. It also suggests that insurers use leverage in formulary decisions to benefit themselves, not the patients they are supposed to serve. While insurers have pushed for the ability to further restrict drug formularies in the protected classes, it is clear that they already have leverage in their dispensing patterns. Ending the protected classes, as some have suggested, would simply further empower insurers to restrict access to needed medications likely harming patients.

---