Potential Medicare Part D Savings on Ophthalmic Generic Drugs

Abstract

This economic evaluation assesses potential Medicare Part D savings on ophthalmic generic drugs if discount coupon prices are used.

Prescription drug spending is a substantial concern for US individuals. In 2021, US pharmaceutical purchases exceeded those in all other countries and represented 18% of health care expenditures.¹ Medicare Part D, the nation’s largest purchaser of prescription drugs, spent $216 billion in 2021.² The average number of prescriptions filled per Medicare enrollee increased from 48 in 2009 to 54 in 2018. During that period, generic drug use rose from 72% to 90% of Medicare prescriptions, representing 20% of annual prescription drug spending.¹

When Medicare Part D was introduced in 2003, the Medicare Prescription Drug, Improvement, and Modernization Act barred Medicare from negotiating prescription drug prices. The 2022 Inflation Reduction Act allowed Medicare to negotiate lower prices on 10 high-priced branded drugs starting in 2026.¹ Medicare’s restrictions on negotiating prices and setting preferred generic manufacturers led to variable and inflated drug prices, resulting in high out-of-pocket (OOP) costs for beneficiaries. To mitigate these high costs, many beneficiaries forgo using their insurance and instead use Mark Cuban Cost Plus Drugs (MCCPD) or GoodRx and SingleCare coupons, which provide considerable discounts compared with the Medicare OOP cost.

As the number of ophthalmic prescriptions dispensed increases, identifying cost-saving measures becomes crucial to ease financial strain on the health care system and patients. Expanding Medicare’s negotiation power to match lower prices available could result in substantial savings. Using 2021 Medicare data, this economic evaluation calculated the potential Medicare savings on ophthalmic generics using coupon and MCCPD prices.

Methods

We identified prices of 11 ophthalmic drugs offered by MCCPD, GoodRx, and SingleCare. Unit price (USD/mL) of drugs paid by Medicare was calculated using aggregate 2021 Medicare Part D data that included beneficiary contributions. We determined potential cost savings as the difference between the lowest unit price of drugs listed on the 3 websites and those paid by Medicare, multiplied by the number of units Medicare reimbursed. We adjusted 2021 prices using National Average Drug Acquisition Cost (NADAC) data to estimate 2023 prices. Including manufacturers of ophthalmic drug forms only, per DrugBank Online,³ we calculated potential Medicare Part D savings exclusive to ophthalmology. The CHEERS reporting guideline was followed. Analyses were performed using Microsoft Excel.

Results

Prices of 11 drugs offered by MCCPD, GoodRx, or SingleCare were less than prices charged to Medicare. The estimated maximum and minimum annual savings across these drugs, using the 90- and 30-day supply price, were $141 501 591.03 and $64 532 373.36, respectively.⁴ The 3 ophthalmic generic drugs with the greatest potential savings were brimonidine tartrate ($60 549 016.05 [GoodRx]), dorzolamide hydrochloride–timolol maleate ($38 058 448.16 [SingleCare]), and dorzolamide hydrochloride ($12 250 333.39 [MCCPD]) (Figure).

Figure. 2023 Adjusted Medicare Cost by Generic Compared With Medicare Cost if Discount Prices Were Used.

Comprehensive analysis of Medicare Part D aggregate spending on various ophthalmic medications compared with their estimated annual discounted costs. Spending data were sourced from 2021 Medicare Part D spending by drug and adjusted using 2023 National Average Drug Acquisition Cost data. Discount costs were retrieved from GoodRx, SingleCare, or Mark Cuban Cost Plus Drugs (MCCPD) websites. The estimated annual discounted cost was derived by multiplying the lowest available unit price of each discounted drug by the number of units Medicare reimbursed. HCl indicates hydrochloride.

^aDiscount cost from GoodRx.

^bDiscount cost from SingleCare.

^cDiscount cost from MCCPD.

Discussion

Expenditures on ophthalmic prescriptions increased from $3.39 billion in 2007 to $6.08 billion in 2016.⁴ During that time, 51% of adults aged 65 years or older had at least 1 ophthalmic prescription.⁵ If Medicare Part D could negotiate generic drug pricing, a substantial savings could be realized from ophthalmic generics. Berkowtiz et al⁶ examined potential savings from MCCPD based on 2021 Medicare data. We analyzed more drugs, coupon prices, and adjusted 2021 Medicare prices using 2023 NADAC data.

Potential savings found for 11 ophthalmic generic drugs underscores the impact of negotiating prices. As more ophthalmic drugs become generic, negotiating prices can further increase potential savings typical of generics. Reducing drug prices could lead to lower OOP costs and Part D premiums for beneficiaries, which may decrease financial strain and improve compliance.⁵ Additional analysis is needed to determine the effect of lower prices on generic availability and on Medicare overall if patients elect to use Medicare benefits instead of paying discount prices. Study limitations include the need to exclude ophthalmic manufacturers who also produce nonophthalmic generics, which may have led to an underestimation of potential savings.

Supplement.

Data Sharing Statement