Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices.. Strengths and Limitations of This Study

04/01/2000

There are a number of important strengths and limitations of this study. In general, the main strengths of this work are the variety and diversity of data sources used in the analysis to create a more comprehensive picture than would have been otherwise possible. Specifically:

  • The study took advantage of a comprehensive array of public data sources including newly available data on prescription drugs from the MEPS, detailed data on the Medicare population from the MCBS, and data from the NHIS, CES, and the National Health Expenditure Series.
  • The study also made use of an important private sector data base on pharmaceutical prices from IMS Health. These data not only offer an enormous sample size (nearly 70 percent of prescriptions from retail pharmacies), but they are a data source accepted and widely used by industry, and have been in existence for a relatively long time.
  • Taken together, the public and private data sources represent the most recent data available to address the main analysis questions.
  • We also undertook a comprehensive literature review and conducted informal conversations with a wide range of industry experts to inform our analysis and to help explain the intricacies of the pharmaceutical marketplace.

As with all studies of this kind, there are limitations to the data and our analysis that are important for the reader to understand. Many of the key weaknesses stem from the short time frame in which the study was completed, which prevented more in-depth analysis on some topics, or inherent limitations of the data that are available to analyze prescription drugs. Specifically:

  • The sample sizes for MEPS and MCBS are too small to do some subgroup analyses and to go beyond the simple two and three variable cross-tabs we present. In addition, both sample sizes are too small for any meaningful drug- by-drug analysis. Our use of IMS data alleviates these concerns for the analysis of drug prices.
  • Although the 1996 MEPS and MCBS data represent the most recent data files available, given the dynamic nature of the pharmaceutical market, it will be important to continue to examine these issues as more information becomes available.
  • Individually, each of the main data sets is not fully representative (e.g. nursing home patients are not included in this analysis, MCBS only includes information on Medicare recipients, and IMS data used in the study only cover retail pharmacies). Taken together, however, the data sources cover the range of populations more effectively than most previous studies.
  • Lack of rebate information, which manufacturers consider to be highly sensitive, is a ubiquitous problem in analyzing drug prices. Given the highly competitive nature of this market, it is unlikely that there will ever be a comprehensive data source on rebates.
  • This short-term study presents descriptive results using only univariate analysis with two and three variable cross-tabs. Descriptive analysis of this type cannot explain why covered individuals use more drugs or whether use of drugs leads to better outcomes. We plan to undertake future analysis that will use multivariate techniques to delve further into the data presented here, although such analysis is likely to push the limits of available data.
  • A problem common to all surveys that sample individuals is their reliance on self-reported data. Self-reported data may not be accurate due to recall problems. Both MEPS and MCBS, however, use multiple rounds of interviewing of the same respondents each year in an effort to mitigate recall problems. In addition, MEPS uses a pharmacy follow-back survey to validate information reported by respondents, and the IMS data are derived directly from the retail pharmacy.

The conclusion of this report includes a discussion of ideas for future research that were generated during the course of developing this report. The strong foundations that this report lays should allow us to delve further into these topics in future analysis.

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