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The Literature | August 2024

Pharmacologic Reimbursement and Physicians

Studies shed light on CMS practices.

Teprotumumab-Related Adverse Events in Thyroid Eye Disease: A Multicenter Study

Shah SA, Amarikwa L, Sears CM, et al1
Industry support: Most of the authors disclosed a financial relationship with Horizon Therapeutics and other companies

ABSTRACT SUMMARY

A multicenter, retrospective, observational cohort study assessed adverse events (AEs) in patients with thyroid eye disease (TED) who were treated with teprotumumab-trbw (Tepezza, Horizon Therapeutics). This monoclonal antibody binds to the insulin-like growth factor-1 (IGF-1) receptor and blocks its activation and signaling.

Study in Brief

A multicenter, retrospective, observational cohort study assessed adverse events (AEs) in patients with thyroid eye disease who were treated with teprotumumab-trbw (Tepezza, Horizon Therapeutics). Proptosis improved by 2 mm or more in 77% of the patients, AEs occurred in 81.7% of the treated individuals, 35% of AEs were unresolved 70 weeks after the first infusion, and 12% of patients discontinued treatment owing to AEs.

WHY IT MATTERS

CMS pays a high amount for this treatment that has a high complication rate.

Proptosis improved by 2 mm or more in 101 (77%) of the 131 patients evaluated. AEs occurred in 107 (81.7%) of the treated individuals. Patients experienced a median of four AEs, most (74%) of which were mild. The average resolved AE duration was 17.6 weeks. Mean follow-up was 70.2 ±38.5 weeks after the first infusion, and 60 (46%) patients had at least one persistent AE at the last follow-up visit. The most common type of AEs was musculoskeletal (58%), followed by gastrointestinal (38.2%), ear and labyrinth (30.5%), nervous system (20.6%), metabolic (15.3%), and reproductive system (12.2%).

DISCUSSION

IGF-1 is overexpressed by orbital fibroblasts in patients with TED, a condition that affects about 50% of individuals with Graves disease and 2% of those with Hashimoto disease. IGF-1 affects the cochleovestibular ganglions, the growth of gastrointestinal mucosa, glucose metabolism, and the skeletal muscles. Inhibiting the natural effects of IGF-1 can therefore cause problems, including hearing loss, inflammatory bowel disease, diabetes, alopecia, cramps, and fatigue.

Although most of the AEs in this study were mild and reversible, 37 (28.2%) and 11 (8.4%) patients experienced moderate and severe AEs, respectively. Sixteen (12.2%) patients discontinued treatment because of AEs.

Medicare reimbursement for the course of eight teprotumumab-trbw infusions can be greater than $500,000 (a J-code is used for billing). The average commercial reimbursement is a reported $823,000.2 The potential financial impact if teprotumumab-trbw were used to treat all TED patients could be staggering because the incidence is 16/100,000 in women and 2.9/100,000 in men.3


Drug Savings for Medicare Part D Beneficiaries Using a Direct-to-Consumer Model

Berkowitz ST, Groth S, Sternberg P Jr, Patel S4
Industry support: None

ABSTRACT SUMMARY

This study compared the aggregate cost of patient payments, third-party payments, and CMS expenditures to what the cost would be if CMS purchased the drugs in bulk from Mark Cuban’s Cost-Plus Drug Company (MCCPDC). MCCPDC sells drugs at a fixed margin of 15% above cost, a fixed dispensing fee ($3), and a shipping fee ($5). The three generic glaucoma drugs included in the study were brimonidine tartrate, dorzolamide hydrochloride, and a fixed combination of dorzolamide hydrochloride and timolol. The three drugs’ aggregate cost in 2021 under Medicare Part D was $210,505,750. The estimated potential savings if MCCPDC had been used was between 34% and 58% or $71,000,000 and $122,000,000.

Study in Brief

A study analyzed potential cost savings if Medicare Part D bought three generic glaucoma drugs through a direct-to-consumer model for generic drugs instead of the current system that makes purchases through carriers and retail stores. In 2021, 34% to 58% or $71,000,000 to $122,000,000 would have been saved on these three drugs. The authors further estimated that Medicare part D could have saved $3.3 billion on 77 generic drugs in 2020.

WHY IT MATTERS

US health care costs are a major concern. In response, CMS has implemented strategies such as establishing the Merit-Based Incentive Payment System and decreasing the physician fee schedule conversion factor. In light of this study’s findings and a projected shortage of physicians in general5 and ophthalmologists in particular,6 it seems reasonable to suggest that the agency prioritize strategies for reducing generic drug costs.

As of May 2023, MCCPDC listed more than 1,000 generic drugs. Berkowitz and colleagues estimated that Medicare Part D could have saved $3.3 billion in 2020 for 77 generic drugs. They speculated that inefficiency in the pharmaceutical marketplace contributes to increased spending for both Medicare and beneficiaries.

DISCUSSION

US health care costs, including the expense of new biologics and older generics, are a major concern. One strategy to address health care costs has been for CMS to use budget neutrality for calculating a conversion factor to determine physician reimbursement, leading to reductions in payments to physicians. There does not appear to be a similar effort by CMS either to base the fees of new biologics or brand-name drugs on the potential financial risk to Medicare or the country as a whole or to control drug costs with budget neutrality. Nor does there seem to be a program that promotes cost containment and quality outcome measures for brand-name drugs and biologics, whereas the US government established the Merit-Based Incentive Payment System for clinicians.

A recent report by the Association of American Medical Colleges projected that the United States will have a physician shortage of as many as 86,000 physicians by 2036.5 Additionally, a study using data from the National Center for Health Workforce Analysis identified ophthalmology as among the medical specialties with the lowest rate of workforce adequacy by 2035.6

The study by Berkowitz et al shows that CMS could save Medicare Part D billions of dollars by adopting a direct-to-consumer model for generic drugs.4 In light of this finding and the predicted doctor shortage, it seems reasonable to suggest that the agency prioritize strategies for reducing drug costs rather than further cuts to physician reimbursement.

1. Shah SA, Amarikwa L, Sears CM, et al. Teprotumumab-related adverse events in thyroid eye disease: a multicenter study. Ophthalmology. 2024;131(4):458-467.

2. Hornick I. Further study needed on cost-effectiveness of teprotumumumab for thyroid eye disease. Ocular Surgery News. October 21, 2022. Accessed July 8, 2024. https://www.healio.com/news/ophthalmology/20221021/further-study-needed-on-costeffectiveness-of-teprotumumab-for-thyroid-eye-disease

3. McAlinden C. An overview of thyroid eye disease. Eye Vis (Lond). 2014;1:9.

4. Berkowitz ST, Groth S, Sternberg P Jr, Patel S. Drug savings for Medicare Part D beneficiaries using a direct-to-consumer model. Ophthalmology. 2024;131(4):509-510.

5. New AAMC report shows continuing projected physician shortage. AAMC. March 21, 2024. Accessed May 29, 2024. https://www.aamc.org/news/press-releases/new-aamc-report-shows-continuing-projected-physician-shortage

6. Berkowitz ST, Finn AP, Parikh R, Kuriyan AE, Patel S. Ophthalmology workforce projections in the United States, 2020 to 2035. Ophthalmology. 2024;131(2):133-139.

Section Editor Edward Manche, MD
  • Director of Cornea and Refractive Surgery, Stanford Laser Eye Center, Stanford, California
  • Professor of Ophthalmology, Stanford University School of Medicine, Stanford, California
  • edward.manche@stanford.edu
  • Financial disclosure: None
Francis Price Jr, MD
  • Medical Director, Price Vision Group, Indianapolis, Indiana
  • President of the Trustees of the Medical Practice Consortium, a health insurance plan for group medical practices in the State of Indiana
  • frankprice@pricevisiongroup.net
  • Financial disclosure: None
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