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Another Shocking Drug Price Hike

Another Shocking Drug Price Hike

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The cost of doxycycline hyclate prescriptions increased 1,854% between 2011 and 2013 in a retrospective analysis of commercial claims data published in the Journal of Investigative Dermatology.

There was no association between market concentration and price of the oral antibiotic, wrote the study authors led by John S. Barbieri, MD, MBA, of the University of Pennsylvania Perelman School of Medicine, Philadelphia.

“This dramatic increase in the cost of doxycycline hyclate is not easily explained using the framework of a competitive market, suggesting non-competitive market forces may be responsible,” the authors wrote in their report.

There was also no change in prescribing behavior in response to the price increase, suggesting that “clinician or pharmacy level interventions could potentially increase utilization of less costly substitutes,” they added.

In their report, Barbieri and co-authors noted “recent inquiries” by the Department of Justice and others into companies involved in manufacturing doxycycline hyclate, suggest that “potentially anti-competitive behavior may be responsible for this dramatic price increase.”

Rising Costs

The retrospective analysis conducted by Barbieri and colleagues included de-identified U.S. medical and pharmacy claims data representing approximately 12-14 million annual covered lives.

The mean prescription cost for doxycycline hyclate increased from $7.16 in 2011 to $139.89 in 2013, amounting to an 1,854% increase, the analysis of claims data shows.

“This dramatic price increase was also associated with increased out-of-pocket expenditures for patients, increasing the financial burden of healthcare and potentially threatening access to care,” the authors said in their report.

The mean out-of-pocket cost for doxycycline hyclate increased 102% to $9.69, and the number of patients with total out-of-pocket expenses of at least $50 increased 50-fold, from 0.1% to 6.8%, their analysis shows.

In contrast, price increases of comparable magnitude were not seen for other oral tetracycline class antibiotics, the authors said. Over the same time period, the mean cost of prescriptions for doxycycline monohydrate and minocycline increased 8% and 2%, respectively, according to the analysis.

Market Findings

To evaluate how pricing changes affected the market share of the manufacturers of these antibiotics, the researchers calculated the Herfindahl-Hirschman index (HHI), a measure of market concentration that they said is commonly accepted and used by the Department of Justice to assess potential mergers.

The HHI is calculated by adding the squared market share percentage of each manufacturer in a market. The values of the HHI range from zero, when a market includes many firms with small market shares, to 10,000, when there is a single firm controlling the market, according to a description by the Department of Justice.

The markets for doxycycline hyclate, doxycycline monohydrate, and minocycline all had an HHI of at least 2,500 through the entire study period, which puts them in the “highly concentrated” market category, according to the report.

“This highly concentrated marketplace may provide a scenario prone to anti-competitive behavior given the relative lack of market participants,” Barbieri and colleagues wrote. “Alternatively, these highly concentrated markets may be at a tipping point between functioning as a competitive marketplace and a monopoly.”

The researchers also said they did not identify a significant association between the cost of doxycycline hyclate cost and HHI over the study period (β=0.030, 95% CI, -0.019-0.079, P=0.213).

That finding suggests the markets “do not appear to be functioning effectively as competitive markets for generic medications,” researchers said, though they added that the markets might behave in a “non-linear fashion that we are unable to model effectively in our analysis.”

Prescribing Patterns

Despite the price increases, providers did not shift prescribing behavior to less costly therapeutic alternatives, a finding that was “not surprising … given that price information is not transparent to patients or clinicians,” Barbieri and co-authors wrote.

Doxycycline hyclate prescriptions decreased by 1.9% from 2011 to 2013, according to the claims data analysis.

Over that same time period, doxycycline monohydrate prescriptions increased 2.5%, while extended-release doxycycline formulations increased by 0.1%, according to the report. Minocycline prescriptions increased 3.9%, and extended-release minocycline formulations decreased by 4.6%.

Clinicians could have saved $105.13 per prescription in 2013 by shifting from doxycycline hyclate to the least expensive oral tetracycline-class antibiotic, according to the authors’ calculations. In turn, patient out-of-pocket costs would have gone down by $5.77 for each prescription.

In total, that would have saved $10.7 million for the entire population in the claims database that year, and would have saved $761,000 in patient out-of-pocket costs, they added.

Since the claims data only represents a fraction of the United States population, the financial impact of choosing the least costly oral tetracycline-class antibiotic instead of doxycycline hyclate could be even more substantial, they added.

Beliefs that doxycycline hyclate is more efficacious or better tolerated than other oral tetracycline-class antibiotics may have made clinicians “reluctant” to change prescribing behavior, the authors suggested.

However, there is “limited evidence to support any particular oral antibiotic as being superior in the treatment of acne,” they said in their report.

This article originally appeared on our partner’s website Dermatology Times, which is a part of UBM Medica. (Free registration is required.)

2017-12-30T10:00:00-0500

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