2004S-0170 - Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Section 1013: Suggest Priority Topics for Research
FDA Comment Number : EC22
Submitter : Dr. Susan Payne Date & Time: 05/11/2004 06:05:12
Organization : Edmund S Muskie School of Public Service
Health Professional
Category :
Issue Areas/Comments
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 encourages private drug plans with which Medicare will contract to use formularies and other strategies to negotiate better drug prices from manufacturers.

Many (c. 16) state pharmacy assistance programs (SPAPs) for low-income elderly and disabled persons have employed prior authorization to control costs. The use of prior authorization by SPAPs has been controversial for two reasons: First, prior authorization may interfere with continuity of care or access to needed medications, partcularly for the elderly, people with multiple chronic conditions, and people with mental health problems; second, savings realized by prior authorization may be negated by cost increases in other health care sectors if barriers to needed medications result in increased use of the emergency room, hospital, or physician services.

Systematic, rogorous evaluations of the impact of SPAP prior authorization programs on drug spending, beneficiaries, providers, and total system costs can provide Medicare with useful information of the extent to which these programs have met the twin objectives of controlling costs and maintaining quality of care. To date, there have not been rigorous evaluations of these programs. SPAPs are an ideal 'natural experiment' to study because their enrolles are low-income elderly and disabled persons, who are similar to the older Medicare beneficiaries without private or Medicaid coverage who are likely to enroll in a voluntary Medicare drug benefit. SPAPs are also very similar to the private drug plans (PDPs) that will be administering a sizeable portion of the Medicare drug benefit, in that they are stand-alone pharmacy benefit programs.

Prior to the implementation of the Medicare benefit in 2006, the impact of existing SPAP prior authorization policies on beneficiaries' well being should be studied to informa private drug plan design and Medicare quality assurance.

Rigorous evaluations are needed to provide important information to Medicare makers on the potential effects of prior authorization on Medicare beneficiaries, Medicare costs for non-medication services, and patient safety, especially for vulnerable enrolles (the oldest old and enrolles with mental health problems or multiple chronic physical conditions). This information can be used by Medicare to monitor the use of prior authorization and other cost control mechanisms by private plans.

This is a high priority in Medicare because of the need to monitor the impact on beneficiaries and non-drug costs of cost control mechanisms that may be used by private drug plans. It is important to do the evaluation before the medication claims data go into the private sector, outside of public oversight.