In this issue of Arthritis Care & Research, Doshi et al report the first analysis of changes in the use of, and expenditures for, infliximab among Medicare beneficiaries with RA before and after the MMA went into effect ( 13). Has the MMA reduced Medicare spending on infliximab? Has the MMA made it easier for patients with RA to access biologic agents or has it limited access to biologics? Has the MMA induced a shift in the type of biologic agent prescribed toward those that are more cost-effective? Has the MMA promoted optimal care of patients with RA? Four key questions arise to determine if the MMA has had its intended, or any unintended consequences, and if it has been a wise policy. However, the impact of the MMA on the use of biologic agents among patients with RA has not been explored.
Limited evidence to date suggests that these potential problems have largely not been realized among patients with cancer ( 11, 12). The American College of Rheumatology also presented these concerns in Congressional hearings ( 10). Although the MMA also increased reimbursements for drug administration, there were concerns, primarily among hematologists and oncologists, that reductions in payments would cause practices to close or to stop providing infusion treatments, that hospital outpatient departments would be overwhelmed with patients not able to receive treatment at physician offices, and that access to treatments would be reduced ( 9). These changes had the effect of reducing the spread to 6–8%, which was a lower mark-up, but a mark-up nonetheless ( 8). Provisions were included in the MMA that from 2004 to 2006 sequentially changed the standard by which physicians and hospitals were reimbursed for infusion treatments. Recognizing that each actor was responding to incentives that it had put in place, the federal government sought to reduce these incentives to help control Medicare spending and exert better stewardship of the public's money. The losers in this scenario were US taxpayers and businesses who, through Medicare, were paying the bill. Surveys between 19 confirmed that Medicare patients preferentially used infliximab ( 6, 7). Patients had access to a valuably effective but expensive medication, which for many would not otherwise be available physicians and hospitals could provide needed treatment and increase their incomes and companies could sell more without the worry of price controls. In many ways, this was a win-win-win situation. The spread for infliximab was 32% in 19 ( 5). Audits by the US Government Accountability Office reported that differences between the average wholesale price and the acquisition costs (i.e., the spread) for infused medications in 2001 were commonly between 15% and 30%, a difference that the physician or hospital could keep ( 4).
Prior to 2004, Medicare reimbursements were based on the average wholesale price of the drug (the list price), which was often substantially higher than the costs to physicians and hospitals of acquiring the drug.
Medicare Part B traditionally has covered the medication and administration costs of treatments given by infusion, including chemotherapy, and with the advent of biologic agents, medications such as infliximab ( 3).
Prior to January 1, 2006, Medicare patients had two primary means to access biologics: buy supplemental private insurance that would cover part of the cost of self-injectable biologic agents, or receive infliximab at their physician's office or hospital outpatient department, with the costs largely paid by Medicare. As of January 1, 2006, when Part D was implemented, Medicare patients with rheumatoid arthritis (RA) could enroll in plans to cover part of the costs of outpatient medications, including the self-injectable biologic agents etanercept and adalimumab. Despite its deductibles, doughnut holes, and dizzying differences among formularies, Part D has been lauded for redressing a major omission in health insurance coverage for the elderly ( 1, 2). Among its most significant provisions was the establishment for the first time of a benefit program, known as Part D, for outpatient prescription drugs. The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) represented the most important change in the way the federal government supports medical care for the elderly since the inception of Medicare in 1965.