Between 2011 and 2017, Medicare Part D spending for 12 single-enantiomer drugs was $19.3 billion. However, substitution with their racemic precursors would have resulted in a savings of $16.6 billion, and Medicare beneficiaries could have saved $1.1 billion ($11.02 per prescription) in out-of-pocket expense, according to a report published in the Annals of Internal Medicine.
Manufacturers often engage in chiral switching, the strategy of developing a single-enantiomer drug designed to substitute for a racemic version that will soon be eligible for generic competition, thereby retaining profitability. While some claim that these single-enantiomer drugs offer safety and efficacy benefits, others claim they have marginal or no therapeutic advantages. During the US Food and Drug Administration’s (FDA) regulatory approval process, most of these single-enantiomer drugs are not compared with their racemic precursors; often when they are compared, no evidence of patient benefit is found. Likewise, product-specific reviews find only marginal, if any, difference.
The investigators estimated the potential savings for the Medicare Part D drug benefit program and its beneficiaries if racemic precursors had been substituted for the single-enantiomer versions of the drugs. They used data compiled from a search of the Drugs@FDA database using the assigned US Adopted Name prefixes (ar-, dex-, lev-, and es-) to identify all new, single-enantiomer-formulation drugs originating from an FDA-approved racemic precursor. This limited the sample to drugs with same formulation racemic precursors. Cost savings were determined by taking Medicare spending from 2011 to 2017 and out-of-pocket beneficiary spending from 2011 to 2015 and subtracting annual per-user Medicare spending and average annual cost share for beneficiaries, respectively. If racemic precursors were substituted, generic substitution was prioritized when available. The effect of rebates that manufacturers provide to offset high prices was estimated by performing sensitivity analyses.
The researchers identified 12 single-enantiomer drugs with FDA-approved racemic precursors and associated Medicare spending. Generic versions were not available for 2 of these (Brovana [Sunovion] and Fetzima [Allergan]) during the study period. Between 2011 and 2017, spending on these drugs totaled $19.3 billion; $16.6 billion, or $112.43 per prescription, could have been saved by substituting racemic precursors. When rebates were considered, if manufacturers paid the average rate of 17.5% for brand name drugs in 2014, $13.7 billion would have been saved. If manufacturers paid the highest rebate rate of 26.3%, $12.2 billion could have been saved. Medicare beneficiaries filled 104.3 million prescriptions for single-enantiomer drugs between 2011 and 2015, for a total of $1.6 billion in out-of-pocket expense. They could have saved $1.1 billion, or $11.02 per prescription, with the substitution of racemic precursors.
The analysis was limited to only a part of the time that these drugs have been available, did not take Medicare Advantage plan spending into consideration, and could not account for actual rebates, some of which are much higher than the 26.3% that Medicare reported in 2014. The study also assumed a complete substitution of racemic precursors when not all substitutions would be appropriate according to patient-specific risk-benefit considerations.
The study investigators concluded, “Nevertheless, while $17.7 billion is only 2.1% of total Medicare Part D spending from 2011 to 2017, our ﬁndings suggest that racemic substitution for single-enantiomer drugs offers an opportunity for Medicare drug savings. Formulary management tools, such as exclusion lists, could also be used until the beneﬁts of newly approved, patent-protected, single-enantiomer drugs are demonstrated through rigorous, high-quality studies.”
Egilman AC, Zhang AD, Wallach JD, Ross JS. Medicare Part D spending on single-enantiomer drugs versus their racemic precursors [published online August 13, 2019]. Ann Intern Med. doi:10.7326/M19-1085