Economic Burden Associated With Extended-Release vs Immediate-Release Drug Formulations Among Medicare Part D and Medicaid Beneficiaries

This cross-sectional study assesses Medicare Part D and Medicaid spending on extended-release drug formulations and the potential savings associated with switching to generic immediate-release drug formulations.
Key Points Question How much do Medicare and Medicaid spend on extended-release drug formulations, and what would be the potential savings associated with switching to immediate-release formulations? Findings In this cross-sectional study of 20 extended-release drugs, Medicare Part D and Medicaid spent a combined $3.1 billion in 2017. Switching to immediate-release drug formulations was associated with an estimated $2.6 billion reduction in spending in 2017 and a $13.7 billion reduction from 2012 to 2017. Meaning The findings suggest that substitution of therapeutically equivalent extended-release drug formulations with immediate-release formulations represents a possible option to reduce Medicare and Medicaid spending.
Importance The United States spends more money on medications than any other country. Most extended-release drugs have not consistently shown therapeutic or adherence superiority, and switching these medications to less expensive, generic, immediate-release formulations may offer an opportunity to reduce health care spending. Objective To evaluate Medicare Part D and Medicaid spending on extended-release drug formulations and the potential savings associated with switching to generic immediate-release formulations. Design, Setting, and Participants This cross-sectional study used the 2012 to 2017 Medicare Part D Drug Event and Medicaid Spending and Utilization data sets to analyze 20 extended-release drugs with 37 Medicare formulations and 36 Medicaid formulations. Only cardiovascular, diabetes, neurologic, and psychiatric extended-release drugs saving at most 1 additional daily dose compared with their immediate-release counterparts were included. Extended-release drugs with therapeutic superiority were excluded. Analyses were conducted from January to December 2019. Main Outcomes and Measures Estimated Medicare Part D and Medicaid savings from switching extended-release to immediate-release drug formulations between 2012 and 2017. Results Of the 6252 drugs screened for eligibility from the 2017 Medicaid Drug Utilization database and the 2017 Medicare Part D database, 67 drugs with extended-release formulations that were identified in the Medicare data set (20 distinct drugs with 37 formulations [19 brand, 18 generic]) were included in the analysis. In 2017, Medicare Part D spent $2.2 billion and Medicaid spent $952 million (a combined $3.1 billion) on 20 extended-release drugs. Between 2012 and 2017, Medicare Part D and Medicaid spent $12 billion and $5.9 billion, respectively, on extended-release formulations. Switching from brand-name to generic extended-release formulations was estimated to be associated with a $247 million reduction in Medicare spending and $299 million reduction in Medicaid spending in 2017, whereas switching all brand-name and generic extended-release formulations to immediate-release formulations in both Medicare and Medicaid was estimated to reduce spending by $2.6 billion ($1.8 billion for Medicare and $836 million for Medicaid) in 2017. During the study period, the estimated spending reduction associated with switching all patients receiving extended-release formulations (brand name extended-release and generic extended-release) to generic immediate-release formulations was $13.7 billion ($8.5 billion from Medicare and $5.2 billion from Medicaid). Conclusions and Relevance The findings suggest that switching from extended-release drug formulations to therapeutically equivalent immediate-release formulations when available represents a potential option to reduce Medicare and Medicaid spending.