Issue No. 56: Study Shows How Prescription Drugs Can Be Key to Constraining Other Health Care Costs

A new study confirms that medicines are often lower-cost alternatives to expensive and sometimes dangerous procedures. In addition, other research shows how medicines allow patients to avoid other treatments that involve further doctor visits, hospital stays, and much greater costs.

The new study, a seven-year clinical trial, called ISCHEMIA, drew significant attention globally. It found that people with severe but stable heart disease from clogged arteries cut their risk of having a heart attack over the next few years just as much by using medicines as by having surgery. “Stents and bypass surgery are no more effective than drugs for stable heart disease, highly anticipated trial results show,” said the Washington Post in a Nov. 16 headline.

According to the Associated Press:

The results challenge medical dogma and call into question some of the most common practices in heart care. They are the strongest evidence yet that tens of thousands of costly stent procedures and bypass operations each year are unnecessary for people with stable disease.

Percutaneous coronary angioplasty (PTCA) – which opens up blocked arteries in order to increase circulation to the heart – is the second-most-common operating-room procedure in America during a hospital stay (after knee surgery), with 534,000 operations, according to H-CUP, the federal Healthcare Cost and Utilization Project. Coronary bypass surgery is also common, ranking 14th with 203,000 operations. Heart procedures are expensive. H-CUP data show that in 2015, a PTCA cost an average of $92,000 – almost doubling in ten years.

A fairly simple coronary intervention with drug-eluding stents (propping open arteries and releasing medicine internally) cost an average of $26,000 for the initial hospitalization and a total of $57,000 including costs for outpatient visits and complications, according to the California Technology Assessment Forum. For bypass surgery, the costs are $34,000 and $61,000.

Unfortunately, getting reliable information on hospital costs can be difficult, and these figures are from 2013, but the price trajectory is up while that of heart-disease medicines is down.

Details of the Research

The trial involved 5,200 men and women with moderate to severe ischemia, or insufficient blood flow caused by clogged arteries. The participants in the study kept to their regular medical therapy, which, according to Gina Kolata, writing in the New York Times, included “statins and other cholesterol-lowering drugs, blood pressure medications, aspirin and, for those with heart damage, a drug to slow the heart rate.” Some patients got stents to open arteries, and the ones who did took anti-clotting drugs.

But for those who received only standard medical therapy, the drugs were generally inexpensive. Generic statins and drugs to reduce blood pressure cost only a few dollars a month, according to the GoodRx website.
Most dramatically, the study found that among those who had stents or bypasses, deaths totaled 145; for those who received medication alone, deaths were 144.

The trial also examined whether patients experienced a heart attack, heart failure, hospitalization for unstable chest pain, or resuscitation after cardiac arrest. Researchers found no difference, over a median of 3.3 years, in any of these disease-related events between the two groups. They did, however, find that those who underwent bypass or stent procedures experienced the events at a higher rate during the first six months of their treatment. In an interview, Judith Hochman of the New York University Grossman School of Medicine, the study’s chair, said that those results suggested that the procedures led to complications.

This study was not the first to show that medicine alone is often the best way to treat heart disease. An earlier report, by the American Medical Association and the Joint Commission, said that “roughly 1 in 10 elective angioplasty procedures performed nationwide may be ‘inappropriate,’ and another third questionable. The operation typically costs around $30,000, and in rare circumstances it can cause tears in blood vessel walls, major bleeding and other problems.”

Will this research change the way doctors treat heart disease? Perhaps not, said Vikas Saini, a cardiologist and president of the Lown Institute in Brookline, Mass., quoted by Axios, "Established practices die hard, especially when there is a substantial culture, mindset and financial structure reinforcing that behavior.”

The Axios article continued:

The prices of individual stents range anywhere from several hundred to several thousand dollars, and the surgeries tack on tens of thousands more for hospitals, which have been pretty dedicated to keeping their beds full whenever possible.

Statins and hypertension drugs have been a major factor in reducing age-adjusted deaths from heart disease from 412 per 100,000 Americans in 1980 to 165 in 2017. An H-CUP study, titled, “Trends in Hospital Inpatient Stays in the United States, 2005-2014,” found that over the nine years “the number of stays for coronary atherosclerosis and other heart disease decreased by 63 percent (from 1,076,100 to 397,000)… Stays for congestive heart failure decreased by 14.4 percent (from 1,053,100 to 901,400).”

Hepatitis C: Medicines vs. Transplants

Hepatitis C (HCV), which kills more Americans each year than any other infectious disease, provides another example of how medicines can reduce costs in the health system overall. In 2014, the FDA approved a remarkable drug called Sovaldi that cured HCV within 12 weeks for 91% of patients. Much of the commentary around Sovaldi focused on its list price: $84,000 for a course of treatment. Since then, the original manufacturer, Gilead, as well as competitors have brought out improved HCV drugs and prices have fallen by three-quarters.

But even at $84,000 or far more, HCV drugs are a comparative bargain – and comparisons, measuring one alternative against another, are what public policy is all about. HCV infection, which afflicts more than 3 million Americans, is responsible for 40% of all chronic liver disease in the United States, and one consequence is a liver transplant. The average estimated cost of such a procedure in 2017, according to a study by the research firm Milliman, was $813,000, or nearly ten times the original cost of Sovaldi.

Adherence and Reduced Medical Costs

If policy makers are serious about reducing health care costs, the best place to look is improving adherence. Many Americans end up in the hospital, where the cost of an average stay is more than $10,000, because they don’t take medicines they should.

In 2017, Jane Brody of the New York Times called non-adherence to doctors’ prescriptions an “out-of-control epidemic.” A review in the Annals of Internal Medicine noted that non-adherence leads to 125,000 deaths and 10% of all hospital admissions each year. The authors wrote:

Studies have consistently shown that 20 percent to 30 percent of medication prescriptions are never filled, and that approximately 50 percent of medications for chronic disease are not taken as prescribed.

And an article by Lisa Rosenbaum and William Shrank in the New England Journal of Medicine concluded that patients not adhering to medication regimens costs the U.S. $100 billion to $290 billion a year. That article was published in 2013, so we can assume the figure is much higher today.

This phenomenon of non-adherence has been extensively studied. For example, in an article in the journal Medical Care last year, M. Christopher Roebuck and colleagues found that full adherence to prescriptions by Medicaid beneficiaries would have reduced hospitalization due to congestive heart failure by 26%, to hypertension by 25%, and to diabetes by 12%.

Uncontrolled diabetes is an especially difficult problem. Research in 2016 found that more was spent on diabetes, at $101 billion in 2013, than on any other disease in the United States (ischemic heart disease was second). But much of the spending could avoided if diabetes were controlled by more Americans through medications.

Diabetes can lead to kidney failure, amputation, blindness and stroke – and high hospital bills. According to American Diabetes Association data, only 8 million of the 30 million Americans with diabetes actually control their disease. Better adherence would avoid 2.9 million hospital days and save $5,170 per diabetes patient per year, according to research published this year by J.T. Lloyd of the Center for Medicare and Medicaid Innovation.

Often, critics point to drug prices as the reason for non-adherence, but the issue is far more complicated. Non-adherence, for example, is high even for inexpensive medications like statin drugs, as research published last year showed clearly. Behavior counts.

In cases where costs do deter adherence, the obstacle is not the list price of a prescription but what patients, only 8.5% of whom did not have insurance at any point during the year, have to take out of their pockets to pay for it. That amount is determined by the design of insurance policies, which, more and more, require high rates of cost-sharing, especially for innovative drugs.

Research on Offsetting Costs

More generally, a study by the Congressional Budget Office (CBO) in 2012 reviewed the extensive literature on the offsetting effect of pharmaceutical use on other medical costs. The conclusion: “A 1 percent increase in the number of prescriptions filled by beneficiaries would cause Medicare’s spending on medical services to fall by roughly one-fifth of 1 percent.”

That is impressive in itself, but Roebuck, writing in the Journal of Managed Care & Specialty Pharmacy, points out that for some costly diseases, the savings are even greater. For hypertension, a 1% increase in prescription drug use led to a 1.17% decrease in other medical costs; for diabetes, it led to a 0.83% decrease; for congestive heart failure, 0.77%; for dyslipidemia (high cholesterol), 0.63%. Roebuck notes that these four conditions represent 40% of Medicare Part D (drug benefit) utilization. He writes that more than half of Medicare beneficiaries have both hypertension and high cholesterol, with average annual medical costs of $13,825 – despite the low costs of drugs to treat the diseases.

He writes, “The current findings suggest that a 5% increase in the use of antihypertensive medication by patients with these 2 conditions may prompt reductions in medical costs of more than $800 annually per beneficiary.”

In addition, the CBO recently analyzed a proposed rule to reform the system of rebates in way that would reduce the out-of-pocket (OOP) costs paid by beneficiaries as an alternative to pharmaceutical benefit managers requiring payments from drug manufacturers. “Beneficiaries who do not fill some of their prescriptions because their current out-of-pocket expenses are high would be more likely to fill them and to better adhere to their prescribed drug regimens if their costs were lower, as they would be under the proposed rule,” said the CBO analysis.

In its research, CBO estimated the proposed rule “would increase federal spending” on behalf of beneficiaries of the Medicare Part D drug insurance program “over the 2020–2029 period by a total of about 2 percent, or $10 billion.” But there would also be a huge offset in increased adherence as OOP outlays dropped. “The increase in the number of beneficiaries following their drug regimens,” said CBO, “would also reduce spending for services covered under Parts A and B of Medicare, such as hospital and physician care, by an estimated $20 billion over that period.”

The net result, then: “Those effects are projected to reduce Medicare spending by $10 billion over the 2020–2029 period.”

Dangers of Viewing Costs in a Vacuum

As this last example shows, policy makers, the media, and the public should never examine health care costs in a vacuum. The medical system is intricately interrelated. It is meaningless to say that a drug – or a surgical procedure – is costly. We need, first of all, to examine “compared to what” and then to understand how a small increase in spending in one area can lead to large decreases in others.