Panel: Effects of State and Federal Policies on Prescription Drug Costs and Utilization
(Health Policy)

Saturday, November 10, 2018: 8:30 AM-10:00 AM
Wilson A - Mezz Level (Marriott Wardman Park)

*Names in bold indicate Presenter

Panel Chairs:  Johanna Catherine Maclean, Temple University
Discussants:  Anita Mukherjee, University of Wisconsin, Madison and Kurt Lavetti, The Ohio State University

State Strategies to Address Medicaid Prescription Spending: Negotiated Pricing Vs. Price Transparency
Shihyun Noh, State University of New York, Brockport and Christian L. Janousek, University of Nebraska, Omaha

Detailing, Direct-to-Consumer Advertising, and Drug Formularies in Medicare Part D
Courtney R. Yarbrough, Emory University, W. David Bradford, University of Georgia and David Ridley, Duke University

This session provides evidence for action by examining how state and federal public policies can improve patients’ access to medication-assisted treatment, reduce potential misuse of prescription opioids, and curb rising drug costs.

The session begins by showing how policies such as health insurance expansions, Part D formulary design, and opioid taxes may reduce utilization of high-dosage prescription opioids and increase patients’ access to medication-assisted treatment for opioid addiction. The first paper uses longitudinal retail pharmacy claims to show that since the implementation of the Affordable Care Act (ACA) Medicaid expansion, Medicaid plays an increasingly important role in financing opioid pain relievers in expansion states. The paper concludes that Medicaid programs have opportunities to refocus pain management and increase access to medication-assisted treatment, such as buprenorphine. The next paper uses data on individuals’ drug purchases to evaluate how exogenous price changes affect the utilization of opioids and other pain relief drugs. The paper finds evidence that the demand for opioids appears to be highly price elastic for new users, which suggests that price-based policies, such as opioid taxes, may be effective in curbing the flow of new opioid use.

The next two papers explore potential effects of state and federal policies on drug costs. Rising drug prices are particularly burdensome for governments, as Medicare and Medicaid together account for nearly 40 percent of the nation’s prescription drug spending. The third paper leverages Part D formulary data to study how drug advertising influences drug placement in insurance formularies. The paper sheds light on the financial ramifications of drug advertising for Medicare Part D spending and the ability of private plans to constrain prices. Finally, the session concludes by evaluating the effects of state strategies to reduce prescription drug spending in Medicaid. The paper finds that managed care organization rebates, enacted by some states under the ACA, were effective in containing drug spending in Medicaid. However, other policies—such as the establishment of all-payer claims databases to boost price transparency—did not have a detectable effect on drug spending in Medicaid.

Together, the four papers cover a range of pressing policy issues related to prescription drug costs and utilization. The lessons gleaned from these papers can help policy-makers improve the design of state and federal policies to increase access to medication-assisted treatment, reduce potential misuse of prescription opioids, and curb rising drug costs.

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