By Dr. Bradley Eilerman and Len Testa
Part 2: Costs Vs. Outcomes for Patients With Type 2 Diabetes
To read part 1, How To Overcome The Complexities of Treatment Decisions For Your Type 2 Diabetes Patients, click here.
The issue of cost in healthcare is a central point in the discussion of the future of medicine.
While much is made of the cost of end-of-life care, many of the dollars spent yearly are focused on the treatment of chronic diseases like diabetes. The estimated yearly cost of diabetes care was $245 billion in the U.S. in 2012, the last year for which numbers have been reported. $50 billion of that was related to prescription drug purchases.
Certain other chronic conditions share similarities with diabetes in relation to cost discussions. The treatment of conditions like hypertension rely on the choice and combination of multiple medications to achieve a measurable goal. Often these medications have generic options, making cost largely in the accumulation of multiple small charges.
Conversely, treatment of long-term diseases like rheumatoid arthritis requires choices between known generic medications with clearly defined drawbacks and new biologic medications which, while very effective, can be very costly. In some cases, superior care can only be achieved with higher cost.
Unfortunately, decisions about diabetes are a hybrid of these dilemmas. Like hypertension, the treatment of type 2 diabetes mellitus often requires combinations of multiple medications. While certain generic medicines like metformin and pioglitazone continue to aggregate long-term outcomes data, other generics like glyburide have accumulated concerns about hypoglycemia, beta-cell burnout, weight gain, and cardiovascular outcomes. Moreover, results of long-acting cardiovascular trials in newer, expensive medications like liraglutide and empagliflozin, bring further complications in decision making.
Two recent changes in payer models on prescription drugs have added to difficulty in decision-making. First, the use of copay tiering often results in a fixed copay for generics and a higher fixed copay for branded medications. Second, the wide availability of manufacturer coupons has expanded the number of treatment options available to cost-conscious patients.
While copay tiering and coupons have made cost choices somewhat more clear-cut between prescriber and patient, they often hide the system cost differential of a branded medication, which may have a total cost 100 times more expensive than a generic. For example, we estimate that the use of manufacturer coupons for type 2 diabetes medication saves the average patient about $40 per month, but increases the payer’s cost $175 per month.
Pressures to control medication costs have produced trends toward both high-deductible plans and coinsurance models for patient cost. In both scenarios, the patient became exposed to the stark cost differentials between branded and generic medications. In addition, the complex cost calculations used to determine patient copay in Medicare Part D share both elements of cost sharing. These considerations, combined with biannual shifts in formulary coverage, make meaningful discussion of cost between patient and prescriber extremely difficult.
Calls for price transparency, while well-intentioned, often miss the underlying complexity of drug pricing in the United States. In order to adequately measure the true cost of a prescription, one needs to know the copay, the pharmacy cost, the PBM negotiated cost, and the PBM negotiated rebate. All of this needs to be measured against the cost of research and development, manufacturing, and logistical distribution of the product. Simply demanding low cost for medications ignores the long-evolved complexity of the American model of healthcare delivery.
With over 5 million possible medication choices for type 2 diabetes, trial and error is not the most effective way to treat patients effectively.
Where does this place the prescriber, who helps chose medications for her patient, and the patient, who bears the burden of the cost at the pharmacy? Real-world discussions about tradeoffs need to happen at the office visit.
Source: Hua, X., Carvalho, N., Tew, M., Huang, E. S., Herman, W. H., & Clarke, P. (2016). Expenditures and prices of antihyperglycemic medications in the United States: 2002-2013. Jama, 315(13), 1400-1402.
Next week, we will delve deeper into the nature of the trade offs essential to clinical decision making for the management of type 2 diabetes. We strongly believe that diabetes care should be individualized. We also believe that there should be rules to guide the decisions made during the course of care. Future articles will address how technology can aid in clinical decision making as well as actual software designed to solve the decision making challenges in diabetes.
Next Week: Part 3 — “Trade-offs and the implication for medical decision making”
Bradley Eilerman MD MHI obtained his medical degree from the University of Kentucky in 2001. He completed his internship at Vanderbilt University Medical Center in 2001 and his residency in Internal Medicine/Pediatrics at the University of Cincinnati in 2005. Dr. Eilerman went on to complete a fellowship in Diabetes, Endocrinology and Metabolism in 2008. He finished his Master’s in Health Informatics in 2016. Dr. Ellerman works as the lead physician, director of clinical research, and clinical endocrinologist for the St. Elizabeth Physician’s group where he cares for a patient base of approximately 2,500. He is licensed to practice medicine in the state of Kentucky.
Len Testa is a computer scientist at GlucosePATH.com, focusing on the combinatorial optimization engine and architecture. Len’s other work includes optimization software that has helped millions of people minimize their waits in line at Disney World. (He’s happy to talk about that, too.) That said, it’s widely acknowledged that Len is the “pretty face” of a much more talented group of people, and that “pretty face” is charitable, at best.