Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices.. Appendix C. State and Regional Variations

04/01/2000

One area of inquiry that is not discussed in the main report is regional and state variation. Preliminary analysis from several different sources suggests that there are substantial regional and state variations in spending and utilization of prescription drugs and in prices faced by consumers. At this point, we can observe some differences, but within the limited time available for this report, it has not been possible to investigate those differences systematically or to offer explanations for them. This appendix describes some of the variation observed. All of the information presented on price variation is limited to the pharmacy level–no information was available on state and regional variation in rebates or discounts to large volume direct purchasers. Tests of statistical significance were not performed on observed differences. Further research is needed to draw informed conclusions on the factors influencing the observed geographic variation.

The discussion below uses data from several different sources. Drug coverage, use rates, and expenditure estimates are from MEPS and are only available at the regional level for 1996. The MCBS cannot be used for regional or state analysis because the sample was not drawn to be representative at the regional or state level. Data from IMS Health are used to compare price differences between cash and third party payers across states and regions in 1998. State-level data were obtained from IMS Health for 25 drugs at their most common form and strength. The drugs were chosen by combining the 20 most frequently prescribed drugs for the Medicare population based on 1996 MCBS data and the top 10 most frequently prescribed drugs for the total population in 1998 based on IMS Health data. Because there was some overlap in the two lists, the final number of drugs compared was 25.1 Among the 25 drugs, seventeen are brand name drugs and 8 are generic drugs. Comparisons between cash and third party payers across states and regions are based on the difference in price paid per unit at the retail pharmacy for each drug on the list. As with the analysis in Chapter 3, this analysis excludes the effect of rebates from manufacturers to PBMs or insurers – for which data were unavailable. While this list includes many common drugs, it is a relatively small sample of drugs to use for state comparisons. Thus, results using a different or larger number of drugs might be different than those shown here.

View full report

Preview
Download

"intro.pdf" (pdf, 23.11Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"C1.pdf" (pdf, 75.87Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"c2.pdf" (pdf, 169.02Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"c3.pdf" (pdf, 92Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"future.pdf" (pdf, 12.41Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appena.PDF" (pdf, 149.34Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appenb.pdf" (pdf, 27Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report

Preview
Download

"appenc.pdf" (pdf, 25.44Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®