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To determine the out-of-pocket prices of common opioid analgesics by medication, drug coverage, region, and year.
Retrospective cohort study using 1999-2004 data from the Medical Expenditure Panel Survey (MEPS) and the Medicare Current Beneficiary Survey (MCBS).
United States civilian non-institutionalized population.
Adults who filled prescriptions for opioid analgesics between 1999 and 2004 and who were not enrolled in Medicaid.
Prices of prescribed analgesics were collected from receipts, medication containers, patient recall, and administrative records (N = 20,026 and 31,500, respectively).
Average out-of-pocket price of an opioid analgesic prescription was around $10, but the estimate is misleading: a typical adult patient without drug coverage paid $12.86 to $61.60 to fill their analgesic prescription, depending on medication. The extended-release formulations cost more than double the “immediate release” prices. For the analgesics studied, drug coverage lowered out-of-pocket prices by 50% to 85%, but market prices increased at a rate of 5.7% to 9% per year with little regional variation. Data did not include prices for medications not prescribed or prescribed, but not acquired.
Independent of the diagnosis, patients’ out-of-pocket price for prescribed analgesics fluctuated freely in the United States across time, region, and coverage status. These fluctuations potentially distort the delivery of effective pain management and further burden an already afflicted population.
Pain is a common reason for individuals to seek medical care in the United States (US). In 2005, two of the twenty most frequently mentioned reasons for US hospital outpatient department visits were related to stomach or back pain, accounting for more than 2.6 million visits. (1) Of approximately 115 million visits made to US hospital emergency departments (ED) in 2005, individuals presented in moderate pain 23.2% of the time and in severe pain 19.5% of the time. (2) Due to the frequency of painful events, medical encounters often result in the prescription of opioid analgesics, which are the cornerstone of therapy for moderate to severe pain. From 2003 thorugh 2004, for example, opioid analgesics were prescribed or provided in 22.9% of ED visits. (3)
Furthermore, pain is often undertreated in the US, across all age groups and a wide variety of underlying conditions, resulting in important clinical, economic, and patient-reported consequences. Pain depresses immune responses, diminishes ability to function and work, potentially increases the risk of developing chronic pain, creates needless suffering, and increases healthcare costs. (4-18) The factors contributing to the undertreatment of pain are multifactorial and extend to all levels of the US healthcare system and society.(19-21) One issue that has yet to be examined is the role of the price of opioid analgesics and the potential for variability in out-of-pocket prices to affect clinicians’ ability to provide and of patients to obtain appropriate analgesia. For example, evidence suggests that high prices decrease adherence to pain management (22-27), indicating that high prices for some opioid analgesics impose an economic burden for patients in pain.
To date, however, the published literature on pain management economics has focused on the insurer’s or healthcare purchaser’s perspective. In 2000, individuals with neuropathic pain disorders incurred more than $17,000 per-person in annual insurer charges compared to $5,715 for individuals in a matched control group without neuropathic pain. (28) Given the high demand for prescription medications, the insurer may attempt reduce their economic burden by raising deductibles and copays (i.e., out-of-pocket prices) or restricting access to certain analgesics via prior authorization and similar requirements. Although these practices may result in lower costs short-term, they also may contribute to worse long-term outcomes, including the development of chronic pain disorders.(29-30) Understanding the implication of insurer decisions requires an estimation of economic barriers for patients who are prescribed opioid analgesics. To our knowledge, no published analyses have addressed the out-of-pocket price of pain management.
One reason for the paucity of price information is that studies of charges and claims do not illustrate the cost paid by uninsured individuals, who are excluded from such systems. Only two interview surveys have collected out-of-pocket price data from insured and uninsured adults: the Medicare Current Beneficiary Survey (MCBS) and the Medical Expenditure Panel Survey (MEPS).(31) Thus, the objective of this study was to examine the out-of-pocket prices of opioid analgesic medications paid by community-dwelling adults in the US using five years of prescription event data from both surveys. Given the frequency of pain, the recent focus on rising prescription drug costs, and the preponderance of evidence suggesting that drug costs influence the quality of care, the results of this paper will inform clinical practitioners, health policy, and health service researchers on one of the most common economic burdens borne by patients, the out-of-pocket price of opioid analgesic medications.
We conducted a retrospective cohort study of prescribed medicine events using survey data from the two overlapping panel surveys, the Medicare Current Beneficiary Survey (MCBS) and the Medical Expenditure Panel Survey (MEPS), which collected data on prescription medication out-of-pocket prices.(31, 32) Each year since 1992 for the MCBS, the Centers for Medicare & Medicaid Services (CMS) have selected a nationally representative cohort of approximately 4,000 Medicare beneficiaries using Social Security Administration records and prospectively collected three years of health care utilization data, including prescription drug records. (33-35) Similarly, for each year since 1996, the Medical Expenditure Panel Survey (MEPS) has randomly selected a nationally representative cohort from households that participated in the previous year’s National Health Interview Survey (NHIS).(36) As with the MCBS, these households were regularly surveyed, and prospectively followed for two and a half years. The response rates were 85% or more for initial community interviews and 95% or more for participation in subsequent rounds for the MEPS and the MCBS.(37)
During regularly scheduled interviews, computer-assisted personal interviewing (CAPI) technology was used to collect prescription drug events information.(39), allowing the interviewer to reference previous prescription events to improve the accuracy of the survey data. Respondents were also given containers to collect prescription receipts and medication bottles to assist recall about prescribed medicine events. In the MEPS, the pharmacies associated with the events were contacted in an attempt to conduct a pharmacy survey. The survey helped validate prescription drug utilization reported by respondents, and directly measured retail prices paid for drugs in complement to interview data.
The inclusion criteria for this study included all adult respondents, age 18 years or older, who: (1) were surveyed between 1999 and 2004; (2) resided in the community setting in the continental US, Alaska or Hawaii; and (3) did not participate in Medicaid. Medicaid beneficiaries generally have nominal co-payments, as specified by federal laws, and were removed from the sample. Due to the elimination of Medicaid beneficiaries, too few of the participants younger than age 65 met the inclusion criteria and were also removed from the MCBS analytical sample. The resulting respondent analytical samples represent adults (MEPS) and older adults (MCBS) in the United States civilian non-institutionalized population, 1999 to 2004.
Within the respondent analytical sample, we excluded analgesic prescriptions which: (1) had imputed or missing prices; (2) had missing quantities; (3) were free; or (4) had unit prices greater than $5 per oral unit. Unlike the MCBS, MEPS does not report prices which were imputed; therefore, imputed prices in the MEPS sample were not removed. Free and unexpectedly high priced events may be related to imputation,(38) use of drug samples, or emergency/inpatient medications that fall outside the aims of this paper. The resulting MCBS (n = 31,500) and MEPS (n = 20,026) analytical samples of opioid analgesic events are nationally representative, describing the out-of-pocket burden of pain management borne by older adults and all adults in the community setting, respectively.
Seven opioid analgesics were identified by brand and generic names listed in the drug name responses: hydrocodone with acetaminophen (APAP), propoxyphene with APAP, codeine with APAP, oxycodone, morphine, tramadol and fentanyl. These names originated from self-report, labeling on receipts, bottle, or other containers, pharmacy audit (MEPS), or previous response. Furthermore, an indicator of extended release was taken from either the survey formulation variable or the drug name response. All eight medications were available over the entire six year period, 1999-2004, but generic availability of each medication varied.(40) Immediate and extended release morphine, as well as the APAP combinations, were multi-source over the entire period.(41) Although generic oxycodone became available for immediate release prior to 1999, its extended release formulation was not generically available until March 24, 2004. Similarly, generic tramadol became available for immediate release on June 19, 2002, but its extended release formulation remains single source. Fentanyl patches were single source until January 28, 2005. Due to insufficient sample size, non-oral dosage forms, other than fentanyl patches, were excluded. Furthermore, rare types of opioid analgesics such as methadone or individually compounded pain medications were excluded from the analytical sample.
The out-of-pocket price of an opioid analgesic was defined as a covered price or a market price. A covered price is a reduced monetary amount paid by a patient who is protected from the customary economic burden of the purchase, known as the market or cash price. The covered price is analogous to a co-payment for those who purchase a drug covered under a tiered insurance policy. Drug insurance is the most common form of coverage, but some insured patients pay the market price for a medication because they have not yet reached their deductible, the drug is not on the insurer’s formulary, or the patient is responsible for submitting their own claims. Alternately, uninsured patients typically pay the market price, although some may pay covered prices through bulk purchasing agreements (e.g., discount card), by traveling to Canada or Mexico for lower prices, or by receiving charitable donations. Because insurance does not mandate the presence or absence of covered prices, coverage is a latent variable and conventional regression techniques are inappropriate. Recognizing the latency of coverage, Craig and Deb developed an application of gamma mixture models for the estimation of out-of-pocket prices for health services, which is applied in this analysis. (42)
We estimated a two-density gamma mixture model using maximum likelihood estimation techniques to examine the out-of-pocket prices of analgesic medications.(42) The three components of the mixture model are a model of the covered price, a model of the market price, and a logistic model for coverage. To facilitate interpretation, adjusted covered and market prices for specific medications are presented in monetary values without adjustment for inflation (Table 1).
Coefficients from the price models represent proportional effects on the out-of-pocket prices (i.e., the percentage change in price associated with the medication characteristic) (Table 2). Medication characteristic variables include seven indicators of opioid analgesic type (i.e., Hydrocodone with APAP, Propoxyphene with APAP, Codeine with APAP, Oxycodone, Morphine, Tramadol, and Fentanyl), an indicator of extended release formulation, three indicators of geographic region, an indicator of residence outside a metropolitan statistical area, (28) and a continuous variable for the year. Coefficients of the coverage model are transformed to represent relative risks of coverage (i.e., the proportional increase in the likelihood of coverage associated with a coverage characteristic) and are presented in the text. Coverage was defined as having employer-based drug insurance, having individual drug insurance, and a continuous variable for the year.
Data were analyzed by using Stata, version 9.2.(43) We stratified the estimation by data source, and did not incorporate sampling weights, because the unit of analysis is analgesic event and sampling weights are not available to improve representation of this analytical unit. (32, 34, 43)
Table 1 shows the frequency and adjusted prices of commonly prescribed opioid analgesics. Acetaminophen (APAP) combinations were the most commonly acquired opioid analgesic, while the frequency of morphine or fentanyl each accounted for three percent of the events. The distribution of prescriptions for opioid analgesics between older adults (MCBS) and all adults (MEPS) was similar, except that propoxyphene with APAP accounted for 24% of the total events in older adults, and only 14% in the sample of all adults.
Covered prices per prescription ranged from $6.31 to $12.14 for older adults (MCBS) and from $4.31 to $12.16 per prescription for all adults (MEPS). The least expensive drugs per event were hydrocodone with APAP for older adults and morphine for all adults, while tramadol was the most expensive drug per prescription for both samples. Among persons with insurance, out-of-pocket prices were higher for older adults than all adults, except for fentanyl.
Market prices per prescription ranged from $14.06 (codeine with APAP) to $32.02 (fentanyl) in older adults (MCBS) and from $12.86 (codeine with APAP) to $61.60 (fentanyl) in all adults (MEPS). Out-of-pocket market prices were higher for all adults than for older adults, except for codeine with APAP and morphine.
The difference between the market and covered prices varies greatly by opioid analgesic. Generic medications, such as APAP combinations, are inexpensive (less than $10) if covered, and are moderately expensive (around than $20) if not covered.
Table 2 shows the percentage change in the out-of-pocket price associated with medication characteristics, specifically extended-release dosage forms, log quantity prescribed, geographic location of the patient, and calendar year time. For older and all adults, prescriptions for covered extended-release analgesics cost 57.2% and 74.7% more, respectively, yet their market prices were 124% and 110% higher, indicating that extended release drugs have a larger effect on market prices than on covered prices.
The coefficient for log quantity represents a log-log relationship (e.g., the percentage change in price resulting from a doubling of quantity). Doubling the quantity of medication increased the covered price by 5.1% or 15.4% for older and all adults, respectively, but increased the market price by 44.1% or 69.3%. As with an extended release medication, increases in quantity have a larger effect on market prices than on covered prices.
Geographic area of residence also influenced out-of-pocket prices. Older adults in rural areas paid 5.4% to 7.5% more than older adults in urban areas for analgesic medications. All adults in rural areas paid 5.2 % more than adults in urban areas for their covered analgesics, but there was no statistically significant association between rural and market prices among all adults. In terms of the four regions of the United States, adults in the South and West tended to pay higher covered prices, and older adults in the South paid 27.8% more in market prices, compared to persons in the Northeast (null case).
Over the six year period studied, 1999 through 2004, prices for older adults increased by 5% per year, which may be considered a form of analgesic-specific inflation. For all adults, covered prices increased 5% per year; however market prices increased by 9% per year, significantly more than covered prices.
Among uninsured individuals, the probability of paying the market price was 83.4% for older adults and 86.6% for all adults, which suggests that most uninsured adults face the full economic burden of outpatient medications. On the other hand, employer-based drug insurance decreases the likelihood of paying the market price by over five times for older adults and all adults. Individually acquired drug insurance decreases the likelihood to a lesser extent, 3.8 times for older adults and 3 times for all adults. Finally, the likelihood of paying the market price decreases by calendar year, which may be related to gradual price decrements which occurs after generic entry.
For persons who suffer from pain, the difference between the covered and market price represents a potentially meaningful burden, which increases with the duration of analgesic therapy. The difference is greater with branded medications, extended release medications, and larger quantities. Although we find little evidence that differentiates opioid analgesic prices between older and all adults, US prices, and particularly market prices, tend to vary across region and time, creating differential economic barriers to pain management.
Instead of prices, health policy debates have focused largely on generic entry, either through patent expiry or importation, and drug insurance coverage. The promotion of generic availability and expanding the number of insured individuals is meaningless if these actions do not lower the economic barriers to needed care, such as pain management. The value of health insurance is not that it insures health, but that insurance is intended to insure access to care and relief from financial burden of out-of-pocket costs. In this paper, we show that insurance increases the likelihood of paying the covered price for opioid analgesic medications (by over 500%), still many prescriptions (about 15%) for insured individuals were not covered.
With the recent implementation of the Medicare Part D prescription drug benefit, the effect of insurance on out-of-pocket prices may take the center stage in the evaluation of health policy, particularly in older adults. For example, among persons not previously enrolled in a prescription drug insurance benefit, Medicare Part D may reduce costs, at least for drugs covered within their benefits formulary. On the other hand, many older adults may fall into the doughnut hole, or be shifted out of a more generous employer-based plan into Medicare D, resulting in increased drug prices. Instead of promoting coverage, importation of cheaper drugs or expediting generic entry may lower market prices, reducing out-of-pocket prices among those who lack coverage.
Generic entry (i.e., when an alternative firm is first approved to sell a generic version of the drug) increases competition, which can lower prices; however, competition from a single generic manufacturer causes a very small reduction in market prices (about 5%).(44) By law, the first generic manufacturer to get FDA approval is granted a 180 days exclusivity period, prohibiting further generic entry during this period. Market exclusivity with one brand and one generic manufacturer tends to maintain the market price at near-monopolistic levels. At the end of the exclusivity period, if at least one or more generic manufacturers enter the market, market prices decrease by 52% or more, depending on the number of generic entrants. The markets for two of the eight opioid analgesic medications experienced generic entry between 1999 and 2004: immediate-release tramadol (June 19, 2002) and extended-release oxycodone (March 24, 2004). However, the market price of extended-release oxycodone changed little over 2004, due to the generic exclusivity period, and subsequent withdrawal of generic controlled-release oxycodone. Furthermore, too few data points were available in the MCBS and MEPS samples to adequately distinguish a drop in the 2004 immediate-release tramadol market price, and the data did not distinguish generic from branded medications. To address this limitation, future work may examine the effect of generic entry on market prices experienced by the insured and uninsured.
Aside from health policy, prices are clinically important for several reasons. Kennedy and Morgan have found that chronic pain is itself predictive of non-adherence.(45) The effect of inadequate coverage of opioid analgesics may deter effective pain management and indirectly deter adherence to other therapeutic regimens. High market prices may also influence the choice between opioid analgesics, favoring generic medications over branded extended-release formulations. Specifically, combinations consisting of acetaminophen (APAP) accounted for around two-thirds of prescribed opioid analgesics within these samples, and present important clinical challenges. While opioid doses can be increased to provide more analgesia, the dose ceiling for acetaminophen is relatively low, due to the potential for toxicity. As a result, use of APAP combinations impedes dosing flexibility.
To further complicate this picture, the clinical utility of codeine and propoxyphene are limited by the pharmacologic profile of these drugs. Codeine is a prodrug, which must be converted to morphine in order to provide any analgesia, and bioconversion of codeine to morphine is known to be subject to pharmacogenetic variation. As a result, some individuals who use codeine will get no pain relief, yet may still experience adverse effects. In combination with 650 mg acetaminophen, analgesia from single doses of propoxyphene (65 mg of the hydrochloride or 100 mg of the napsylate form) was similar to that seen with 1000 mg APAP or 200 mg ibuprofen, and less than that from ibuprofen 400 mg or diclofenac 50 mg.(46) Additionally, propoxyphene has an active metabolite, norpropoxyphene, which is potentially toxic, and which can accumulate in persons with diminished renal function.(47) Furthermore, propoxyphene use is commonly discouraged as a choice for analgesia in older persons in clinical practice guidelines.(48) Yet, in this analysis, propoxyphene accounted for 24% of events among older adults, and 14% of events among all adults. It is not clear why propoxyphene use was so common, given the strong evidence against it. This observation suggests that high prices for opioid analgesics may not only result in inadequate pain management, but may also promote use of cheaper, more toxic alternatives.
Limitations of this study primarily concern the measurement of prices. If a person decides not to get a prescription or not to fill a prescription due to high prices, the prices are not recorded in any survey. This is a form of decision-based censoring, and limits the generalizability of the results. As a result, the mean out-of-pocket prices may seem lower than conventional expectations. An optimal study would describe the out-of-pocket prices faced by all individuals who would benefit from opioid analgesics. Instead, we described the burden borne by those who get opioid analgesics, not the economic barriers faced by those who should get them.
Furthermore, the inability to quantify out-of-pocket costs over time, inability to analyze monthly opioid cost by patient characteristics (e.g., diagnosis, adjuvant analgesics), and the inability to quantify cost for an individual patient – in other words, one patient might have paid for two oxycodone with APAP prescriptions and three long-acting morphine dosage forms within the same month. Therefore, the out-of-pocket costs presented may under represent the actual costs these patients incur on a monthly basis.
This is the first paper to describe the out-of-pocket prices of common opioid analgesics, one of the most common categories of medications used in ambulatory care. Alternative sources of price data are either anecdotal (e.g., internet drugstore prices) or based on manufacturer’s advertising or published list price to wholesalers (i.e., Wholesale Acquisition Cost). In 2001, the Inspector General of the Department of Health and Human Services (HHS) recognized that the average wholesale price is “a list price reported by the drug manufacturers that is neither average nor wholesale and bears little or no resemblance to the actual wholesale prices available to physicians and suppliers who participate in the Medicare program.”(49) A growing literature is critical of physicians, because they are largely uninformed about the drug prices faced by patients.(50) Until more published evidence on the out-of-pocket prices is available, this criticism of physicians and health policy makers seems unfair.
Role of the Funding Source: No external funding was received for the study.