The Cost-Response Curve

Screen Shot 2014-07-13 at 11.04.35 AM“Drugs don’t work in people who don’t take them.” C. Everett Koop, former US Surgeon General

Cost-based non-adherence, like any lack of medication adherence, leads to further complications and hospitalizations that could have been prevented. CMS appears to have recognized this when they announced that a new ACO measures on whether “providers have educated patients about the cost of medications” in the 2015 fee schedule.  Cost and quality conversations between doctors and patients are becoming a cornerstone to value-based care.

The most expensive drugs are the ones that the patient never takes.  Nearly one third of prescriptions go unfilled. When patients cannot afford a medication, and only discover the price or out-of-pocket cost at the prescription counter, it’s a big risk to long-term outcomes.

“It has been well established that a lack of affordability can drive a lack of adherence to a course of medications.  Patients who do not take their medications cost the U.S. healthcare system an estimated $300 billion in avoidable medical spending annually due to poorer health, more frequent hospitalizations and a higher risk of mortality”, according to The Center for Health Value Innovation and the Network for Health Value in Innovation.

A lack of medication adherence drives further costs for the system and suffering for patients. Estimates are that more than a third of medicine-related hospitalizations happen because people did not take medicine as directed, leading to over 125,000 deaths.

Medication non-adherence, of course, can have many reasons: side effects, difficulty in administering the drug, and others, but there is clear evidence that cost is a factor driving non-adherence. 27% of Americans did not fulfill a prescription due to financial hardship in 2012 according to a Kaiser Family Survey. As copays, deductibles and out-of-pocket expenses go up, so, likely, will non-adherence, and value-based care, and value-based benefits must understand the costs related to non-adherence.

Cost is a risk similar to the risk that a drug won’t work for some patients — the patients that can’t or choose not to pay it. Dr Koop astutely pointed out, drugs patients don’t take can’t work.

Let’s take a look at Coumadin as one example. There are still 2 million Americans taking Coumadin (warfarin) and another 2 million on other anticoagulants (blood thinners). These newer anticoagulants drugs such as Eliquis promise increased efficacy and ease of use but at a higher price. Coumadin requires a blood tests once per week to check the proper dosing, Eliquis and newer anticoagulants do not.

We may find that Eliquis and other new anti-coagulants that are easier to use can increase adherence. The best solution is to have an honest conversation about affordability, including best evidence on efficacy and ease of use. We need to understand the fdifferent motivating factors for each patient.

Let’s look at the costs, average data via GoodRx.com:

Eliquis 5 mg twice daily = 60 tabs per month = $313.05  x  12 months = $3780.60 per year

Warfarin 5 mg once daily = 30 tabs per month = $4.00 x 12 months = $48.00  (on the $4 list at most pharmacies).

Because Coumadin requires a blood test to monitor dosage, we need to add in the cost of the monitoring device and testing strips.

Roche CoaguCheck home monitoring device  = $695.15  (on Amazon.com)   [lasts for years]

Roche CoaguCheck testing strips (48) to allow once per week testing for one year = $226.68

So, Eliquis costs $3780.60 per year.

Coumadin costs $48 (the tablets) + $695.15 (device) + $226.68 (years worth of testing strips) = $969.83 per year

So overall, Coumadin provides a savings of $2810.77 per year, factoring in the cost of blood testing.

Assuming for the time being that these drugs work equally well, will a drug that costs 3X more drive 3X higher non-adherence? Or does ease of use drive better adhererence? Certainly ease of use will be more important to some patients, price for others. These are the questions we need answer in value-based health care models. We need to know how price relates to efficacy, including the risk of non-adherence, and how price might intersect with other factors, such as side effects and ease of use.

Coumadin, for some patients, may be more difficult to use and not the right medication for a wide variety of reasons. Yet too often price is overlooked, and by the time the patient finds out the price, even if a drug is easier to use, the patient may not get the current prescription nor the next refill without a conversation ever happening.  As CMS has suggested, patients and physicians need to have the conversation about medication prices.

At RxREVU we enable those conversations on efficacy and cost of medications. We recognize that each patient is potentially a different conversation, and we’re striving to enable those conversations on the best information and evidence available.

So we need to model what the relationship is between non-adherence and price for a variety of conditions and drugs. We need to find the out-of-pocket cost-response curve of medications for different drugs and populations. The price-response curve (link) of economics similarl to the dose-response of pharmacology. We need to know when, where and for which patients price can be a risk to adherence. When the price is too high, we’ll easily be able to predict a dose, and response, of zero.