It's Midsummer, And across the country pharma sales managers are participating in what's become an annual ritual. "What's
happening to sales?" the rep's boss asks. "Sales are off," the manager replies. "Consumers are hitting the doughnut hole (or
gap). My reps tell me that patients are dropping off therapy because now they have to pay full price." Or: "We need a new
patient assistance program to fill in the gap."
The "Doughnut Hole"—the coverage gap built into the Medicare Part D benefit design—was originally intended as a means of shifting
the cost of this new program back onto consumers, and limiting the budget impact of a prescription benefit for the federal
government. But it has also created significant uncertainty for pharmaceutical companies, which need to know how this shift
to a defined contribution toward annual drug spending ($2,400 in 2007) will affect sales. In addition, it has created virtually
unanswerable excuses for sales reps and managers.t does the doughtnut hol reallyUntil now, it has been difficult to verify
these claims. The impact of the coverage gap on patient behavior has largely been a mystery.
The question is: What does the doughnut hole really do to drug sales?
Until recently, it's been impossible to tell. But over the last year, Amundsen Group has worked with healthcare data provider
Verispan to demystify the impact of the coverage gap on Part D patient behavior. Specifically, Amundsen used Verispan's anonymous
longitudinal patient data (ALPD) to create a representative sample of more than 3 million Medicare Part D beneficiaries who
might have had exposure to a gap in branded or generics coverage, tracking their behavior as their share of prescription costs
changed from a standard Part D copay or coinsurance to paying full price. For the 2006 and 2007 benefit years, this extensive
sample was used to help a number of clients answer pressing questions such as: How many of my patients reach the coverage
gap? How do they behave when they reach it? Do they stop taking my brand or shift to a generic? If they reduce their adherence
at the end of the year, do they come back when their cumulative drug spend resets in January?
The conclusions so far:
1) It is possible, although very difficult, to measure the impact of a coverage gap on specific therapeutic classes and brands When you do so, it is quickly apparent that far fewer prescriptions require patients to pay the full price than most manufacturers
expect, thanks to employer supplemental coverage, state and manufacturers' patient assistance programs, other third party
coverage, and the Low Income Subsidy (LIS) program. (LIS patients use about half of the drugs prescribed under Part D and
pay almost nothing.)
2) The industry has been asking the wrong question "What happens when my patient crosses the coverage gap threshold?" is not the only relevant question. Rather, how does the
existence of a gap in branded or generics coverage affect overall patient adherence in Part D? It turns out that the largest
impact of the coverage gap is often found among patients who avoid the coverage gap by stretching their prescriptions or dropping some medications—thus never reaching the threshold.
3) The impact of the coverage gap will be very different by therapeutic class and brand It depends on whether or not a widely accepted generic or an OTC alternative is available.