Sean Dickson1. 1. 1 Drug Spending Research Initiative, The Pew Charitable Trusts, Washington, DC.
Abstract
BACKGROUND: Annual spending on retail and nonretail prescription drugs exceeds $450 billion and is projected to outpace growth in all other national health expenditure categories over the next decade. Evergreened reformulations of drugs, defined here as extended-release or other reformulations that came to market more than 2 years after initial approval of the immediate-release product, increase drug spending and delay patient access to extended-release formulations. Reforming drug approval incentives may encourage earlier introduction of extended-release formulations, hastening generic adoption and patient access. OBJECTIVES: To (a) systematically identify evergreened reformulations, defined as reformulations that extend drug exclusivity (i.e., extended-release or other reformulations that came to market more than 2 years after initial approval of the immediate-release product), and (b) estimate the effect on Medicaid spending and the delay in patient access to extended-release formulations. METHODS: Evergreened reformulations were identified using FDA Orange Book drug approval data (1982-2018); these data were used to characterize mean time from initial brand approval to evergreen reformulation approval and subsequent generic approval. Medicaid expenditure data from 2008-2016 were used to estimate increased expenditures from delayed introduction of generic extended-release formulations. Outcome measurements include time from FDA approval of immediate-release brand drug to evergreened reformulation extended-release brand drug approval, annual generic share of immediate-release and extended-release prescriptions in Medicaid, and annual price difference between brand and generic prescriptions in Medicaid. RESULTS: 73 drug active ingredients were subject to evergreened reformulations; these evergreened reformulations increased Medicaid expenditures by $9.35 billion from 2008-2016. Among reformulations that increased expenditures by over $100 million each, the mean time between the initial brand approval and evergreen reformulation approval was 8.1 years (SD = 3.9; median = 8.8; interquartile range [IQR] = 3.7-11.7); across all evergreened reformulations where the initial drug was approved after January 1, 1982, the mean was 7.9 years (SD = 4.3; median = 6.8; IQR = 4.0-11.0). CONCLUSIONS: Evergreened reformulations increase Medicaid drug expenditures and delay patient access to extended-release formulations. Reforming drug approval laws could alter market incentives for evergreened reformulations, decreasing spending and hastening patient access to extended-release products. DISCLOSURES: No outside funding supported this research. The author has no competing interests to disclose.
BACKGROUND: Annual spending on retail and nonretail prescription drugs exceeds $450 billion and is projected to outpace growth in all other national health expenditure categories over the next decade. Evergreened reformulations of drugs, defined here as extended-release or other reformulations that came to market more than 2 years after initial approval of the immediate-release product, increase drug spending and delay patient access to extended-release formulations. Reforming drug approval incentives may encourage earlier introduction of extended-release formulations, hastening generic adoption and patient access. OBJECTIVES: To (a) systematically identify evergreened reformulations, defined as reformulations that extend drug exclusivity (i.e., extended-release or other reformulations that came to market more than 2 years after initial approval of the immediate-release product), and (b) estimate the effect on Medicaid spending and the delay in patient access to extended-release formulations. METHODS: Evergreened reformulations were identified using FDA Orange Book drug approval data (1982-2018); these data were used to characterize mean time from initial brand approval to evergreen reformulation approval and subsequent generic approval. Medicaid expenditure data from 2008-2016 were used to estimate increased expenditures from delayed introduction of generic extended-release formulations. Outcome measurements include time from FDA approval of immediate-release brand drug to evergreened reformulation extended-release brand drug approval, annual generic share of immediate-release and extended-release prescriptions in Medicaid, and annual price difference between brand and generic prescriptions in Medicaid. RESULTS: 73 drug active ingredients were subject to evergreened reformulations; these evergreened reformulations increased Medicaid expenditures by $9.35 billion from 2008-2016. Among reformulations that increased expenditures by over $100 million each, the mean time between the initial brand approval and evergreen reformulation approval was 8.1 years (SD = 3.9; median = 8.8; interquartile range [IQR] = 3.7-11.7); across all evergreened reformulations where the initial drug was approved after January 1, 1982, the mean was 7.9 years (SD = 4.3; median = 6.8; IQR = 4.0-11.0). CONCLUSIONS: Evergreened reformulations increase Medicaid drug expenditures and delay patient access to extended-release formulations. Reforming drug approval laws could alter market incentives for evergreened reformulations, decreasing spending and hastening patient access to extended-release products. DISCLOSURES: No outside funding supported this research. The author has no competing interests to disclose.