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Cost-Effectiveness of Full Medicare Coverage of Angiotensin-Converting Enzyme Inhibitors for Beneficiaries with Diabetes

Allison B. Rosen, MD, MPH, ScD; Mary Beth Hamel, MD, MPH; Milton C. Weinstein, PhD; David M. Cutler, PhD; A. Mark Fendrick, MD; and Sandeep Vijan, MD, MS
[+] Article and Author Information

From the University of Michigan Health System and Ann Arbor Veterans Affairs Medical Center, Ann Arbor, Michigan; Beth Israel Deaconess Medical Center and Harvard School of Public Health, Boston, Massachusetts; and Harvard University, Cambridge, Massachusetts.


Acknowledgments: The authors thank Joseph Newhouse, PhD; Lisa Iezzoni, MD, MSc; and Peter Neumann, ScD, for their helpful suggestions on the design and conduct of the analyses. The authors also thank Gerard Anderson, PhD, for his assistance in obtaining Medicare expenditure estimates for individuals with diabetes.

Grant Support: Dr. Rosen was supported by an AHRQ Health Services Research Fellowship at the Harvard School of Public Health (grant 5 T32 HS00020-16). Additional funding was provided by the Primary Care Research Fund of Brigham and Women's Hospital, which had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; or preparation, review, or approval of the manuscript.

Potential Financial Conflicts of Interest: None disclosed.

Requests for Single Reprints: Allison B. Rosen, MD, MPH, ScD, Division of General Medicine, University of Michigan Health Systems, 300 North Ingalls, Suite 7E10, Ann Arbor, MI 48109; e-mail, abrosen@umich.edu.

Current Author Addresses: Dr. Rosen: Division of General Medicine, University of Michigan Health Systems, 300 North Ingalls, Suite 7E10, Ann Arbor, MI 48109.

Dr. Hamel: Division of General Medicine and Primary Care, Beth Israel Deaconess Medical Center, 330 Brookline Avenue, Boston, MA 02215.

Dr. Weinstein: Department of Health Policy and Management, Harvard School of Public Health, 718 Huntington Avenue, Boston, MA 02115.

Dr. Cutler: University Hall, Ground Floor North, Harvard University, Cambridge, MA 02138.

Dr. Fendrick: Division of General Medicine, University of Michigan Health Systems, 300 North Ingalls, Suite 7C27, Ann Arbor, MI 48109.

Dr. Vijan: Department of Health Services Research & Development, Ann Arbor Veterans Affairs Medical Center, PO Box 130170, Ann Arbor, MI 48113-0170.

Author Contributions: Conception and design: A.B. Rosen, M.B. Hamel, S. Vijan.

Analysis and interpretation of the data: A.B. Rosen, M.B. Hamel, S. Vijan.

Drafting of the article: A.B. Rosen, D.M. Cutler, S. Vijan.

Critical revision of the article for important intellectual content: A.B. Rosen, M.B. Hamel, M.C. Weinstein, D.M. Cutler, A.M. Fendrick, S. Vijan.

Final approval of the article: A.B. Rosen, M.B. Hamel, M.C. Weinstein, D.M. Cutler, A.M. Fendrick, S. Vijan.

Statistical expertise: A.B. Rosen, M.C. Weinstein, S. Vijan.

Obtaining of funding: A.B. Rosen.

Collection and assembly of data: A.B. Rosen.


Ann Intern Med. 2005;143(2):89-99. doi:10.7326/0003-4819-143-2-200507190-00007
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Diabetes is a major cause of ESRD and cardiovascular disease in the United States. Angiotensin-converting enzyme inhibitors are effective at reducing these complications, but they are substantially underused (1923). Prescription copayments are a barrier to use (6465). While concern mounts over increasing Medicare costs, our analysis suggests that Medicare adoption of first-dollar coverage of ACE inhibitors for beneficiaries with diabetes not only saves lives but actually decreases total Medicare costs. Cost savings remained even when we conservatively compared first-dollar coverage of ACE inhibitors with prescription coverage provided by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

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Figures

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Figure 1.
Markov model of disease progression.

This simplified model shows progression through renal disease states and cardiovascular disease ( ) events. The CVD events include myocardial infarction, stroke, and CVD-related mortality. ESRD = end-stage renal disease.

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Figure 2.
Incremental costs and quality-adjusted life-years (QALYs) by increase in angiotensin-converting enzyme (ACE) inhibitor use with first-dollar coverage.

Top. The incremental change in costs for different increases in ACE inhibitor use due to first-dollar coverage compared with 2 comparators: current practice (solid line) and practice under the 2006 Medicare drug benefit (dotted line). Incremental costs below the dashed line ($0) are cost-saving with first-dollar coverage of ACE inhibitors. The incremental change in QALYs saved for different increases in ACE inhibitor use due to first-dollar coverage compared with 2 comparators: current practice (solid line) and practice under the 2006 Medicare drug benefit (dotted line).

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Appendix Figure.
Breakdown of base-case results by adherence to angiotensin-converting enzyme inhibitors.

Squares indicate a decision between alternate policies. “Drug benefit” denotes first-dollar coverage of angiotensin-converting enzyme inhibitor, while “no drug benefit” denotes current practice. Circles represent chance events; circles with “M” denote entry into a Markov process. QALY = quality-adjusted life-year.

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No Title
Posted on July 24, 2005
Vinod N. Velakaturi
None
Conflict of Interest: None Declared

TO THE EDITOR:

I must disagree with the assertion by Rosen and colleagues of the average cost of ACE Inhibitor as $233 per year which is $19.42 per month. I have numerous patients that go to COSTCO Warehouse or SAM's club and can get generic lisinopril for far less. These entities do not require membership to buy prescription medications because they are legal pharmacies within the store.

My patients are able to get lisinopril 10 mg for approximately $18 per 100 tablets which is the cost of $72 per year. The 20 mg dose is approximately $25 for 100 tablets. These are fairly common doses for hypertension. The cost of lisinopril/hctz is not much different. I think this changes the assertions made in the article to that the Medicare program likely could improve outcomes and save money to it probably and most likely will.

Vinod N. Velakaturi, MD Lees Summit,MO 64064

Conflict of Interest:

None declared

Medication Copayments Could Be Varied to Maximize Health Benefits
Posted on September 6, 2005
Allison B. Rosen
University of Michigan
Conflict of Interest: None Declared

Dr. Velakaturi raises an important point: prices for medications vary depending on the venue where they are purchased. We used a commonly cited metric, the average wholesale price (AWP), in our base case estimates. However, in sensitivity analyses, as ACE inhibitor prices decrease, overall Medicare savings increase. For example, the Medicare savings of $1,606 per beneficiary at AWP pricing would increase substantially (to $2,943 per beneficiary) if ACE inhibitors were purchased according to the federal supply schedule ($39 per year for lisinopril), which is the substantially lower government-negotiated medication prices available to the U.S. Department of Veterans Affairs and U.S. Department of Defense. However, a much debated clause in the legislation enacting the new Medicare drug benefit prohibits the Medicare program from directly negotiating prices with drug manufacturers,(1) As a result, an increasing number of Americans are likely to face financial barriers that lead to the underuse of essential medications and other medical interventions.(2)

In addition to purchasing drugs at lower prices, the value of Medicare spending could be markedly improved by lowering or eliminating financial barriers (copayments) for essential medications. A "benefit- based copay," where patient cost-sharing is set to the level of projected benefit of a drug "“ not its acquisition cost "“ is a more rational system that will optimize the use of our increasingly scarce health care dollars.(3)

REFERENCES:

1. Centers for Medicare & Medicaid Services (CMS). Medicare Prescription Drug, Improvement and Modernization Act of 2003. Washington, DC; 2003. Available at: http://www.cms.hhs.gov/medicarereform/. Accessed September 6, 2005.

2. USA Today/Kaiser Family Foundation/Harvard School of Public Health. Health Care Costs Survey, August 2005. Available at: http://www.kff.org/newsmedia/pomr090105pkg.cfm. Accessed September 6, 2005.

3. Fendrick AM, Smith SG, Chernew ME, Shah SN. A benefit-based copay for prescription drugs: patient contribution based on total benefits, not on drug acquisition cost. Am J Manag Care. 2001;7:861-867.

Conflict of Interest:

None declared

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Summary for Patients

The Cost-Effectiveness of Full Medicare Coverage of Angiotensin-Converting Enzyme Inhibitors for Patients with Diabetes

The summary below is from the full report titled “Cost-Effectiveness of Full Medicare Coverage of Angiotensin-Converting Enzyme Inhibitors for Beneficiaries with Diabetes.” It is in the 19 July 2005 issue of Annals of Internal Medicine (volume 143, pages 89-99). The authors are A.B. Rosen, M.B. Hamel, M.C. Weinstein, D.M. Cutler, A.M. Fendrick, and S. Vijan.

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