Indication: to lower cholesterol and thereby reduce cardiovascular disease.
With 2005 sales of US$12.2 billion under the brand name Lipitor, it is the largest selling drug in the world
Rosiglitazone (Avandia) (15281/1052)
Date of introduction: March 1, 2001
Therapeutic Class: thiazolidinedione
Indication: Anti-diabetic drug (Diabetes Type II)
Clopidogrel (Plavix) (7378/728)
Date of introduction: January 1, 2001
Therapeutic Class: Antiplatelet agent
Indication: is a potent oral antiplatelet agent often used in the treatment of coronary artery disease, peripheral vascular disease, and cerebrovascular disease.
In 2005 it was the world's second highest selling pharmaceutical with sales of US$5.9 billion
Other new drugs
Celecoxib (Celebrex)
Arthritis/Pain (April 1, 2001) (but: side effects) (15574/3952)
Esomeprazole (Nexium)
Heartburn/Acid Reflux (January 1, 2002) (4250)
Olanzapine (Zyprexa)
Schizophrenia/Bipolar (February 1, 1999) (5284)
Venlafaxine (Effexor)
Antidepressant ( October 1, 2000) (2296)
Montelukast (Singulair)
Asthma (July 1, 2001) (2489)
Quetiapine (Seroquel)
Schizophrenia/Bipolar (April 1, 2000) (2795)
Disease Code Combinations only < 1% of visits have no ICD9 code
Description of Data
Panel Data
Eight years of complete medical claims data for a random selection of 200,000 individuals from Taiwan’s population of 23 million
HOSB, PER, DOC and ID files
The age, gender, and expenditures of the randomly selected individuals do not differ significantly from the population
Time Series (Random Subsamples)
Outpatient Expenditures
Inpatient Expenditures
Prescription Drugs at Contracted Pharmacies (complete)
Summary Statistics - Hypertension
Empirical Strategy – Likelihood of adoption
Probit/Logit Model
Pat: Patient Characteristics: age, gender, past number of visits, ER visits, hospitalizations, multiple conditions?
Phys: Physician Characteristics: age, gender, experience, tenure, past prescription pattern
Hosp: Hospital Characteristics: Academic, urban, family practice
Endogenous variable? Omitted variables (Neglected heterogeneity)? New diagnoses?
ER visits, hospital admissions, hospital lengths of stay (problem?), and/or medical expenditures (compared to patients taking older drugs)?
Quote
“Too often,” says Robert Seidman, chief pharmacy officer at health insurer WellPoint, “we're choosing the newer, pricier drug without considering whether older drugs would get the job done just as well”
Lipitor: $612/180 20mg tablets
Zocor: $799/180 20mg tablets but soon generics
Mevacor: $228.31/180 20mg tablets
www.drugstore.com prices
Literature Review
Lichtenberg (1996)
Number of hospital bed-days declined most rapidly for those diagnoses with the greatest change in the total number of drugs prescribed and greatest change in the distribution of drugs (proxy for novelty)
Lichtenberg (2001)
Patients who consume newer drugs experience fewer work-loss days than patients who consume older drugs; and the former tend to have lower non-drug expenditures, reducing total expenditures
Lichtenberg (2002)
With larger dataset, and 3 years instead of 1 year of observation, Lichtenberg argues that a reduction in the age of drugs decreased non-drug expenditures 7.2 times as much as it increased drug expenditures. (8.3 times for Medicare population)
Lichtenberg (2005)
Effect of the launch of new drugs: Average 1 week increase in life expectancy in the entire population
Conceptual Framework
Empirical question: Estimation of Average Treatment Effect
Are the high cost of new drugs justified based on their health outcome impact?
Lichtenberg studies do not address selection bias in treatment
Atorvastatin (Lipitor): Clinical Research
Collaborative Atorvastatin Diabetes Study (CARDS),
2,800 patients with type-2 diabetes, no history of heart disease, and relatively-low levels of cholesterol,
Positive Health outcome:
patients who took Lipitor had a 37 percent reduction in major cardiovascular events
which included heart attacks, stroke, chest pain that required hospitalization, cardiac resuscitation, and coronary revascularization procedures.
overall mortality rate for Lipitor patients was 27 percent lower than for those on placebo.
But: Study Sponsored by Pfizer / No comparison with older drugs / Relatively Healthy Population
Atorvastatin (Lipitor) Clinical Research - Hypertension
LIPITOR significantly reduced the rate of coronary events
either fatal coronary heart disease (46 events in the placebo group vs 40 events in the LIPITOR group)
or nonfatal MI (108 events in the placebo group vs 60 events in the LIPITOR group)]
relative risk reduction of 36% (based on incidences of 1.9% for LIPITOR vs 3.0% for placebo), p=0.0005
The risk reduction was consistent regardless of age, smoking status, obesity or presence of renal dysfunction. The effect of LIPITOR was seen regardless of baseline LDL levels. Due to the small number of events, results for women were inconclusive.
N = 10,305 (Anglo-Scandinavian Cardiac Outcomes Trial)
Source: www.lipitor.com
Mixed Results for Lipitor Vs. Zocor By THERESA AGOVINO, AP Business Writer Tuesday, November 15, 2005 06 57 PM
High doses of the cholesterol-lowering drug Lipitor were no better at preventing major heart problems than regular doses of rival Zocor, according to the latest study on efforts to aggressively treat the conditions released Tuesday.
Lipitor outperformed Zocor on several fronts such as lowering cholesterol and preventing nonfatal heart attacks. The findings will continue to give it an advantage in the market even if generic Zocor is less expensive, some doctors said.
But: HIGH DOSE OF LIPITOR vs. REGULAR DOSE OF ZOCOR
What about LIPITOR vs. MEVACOR, PRAVACHOL, LESCOL, CRESTOR
Empirical Strategy
Naïve Fixed Effects Regression
Threats to Identification
Selection for treatment most likely not random
Selection Bias in Treatment
Perhaps physicians assign nonrandom populations to treatment
Perhaps patients seek physicians who prescribe new drugs (e.g., Lipitor)
Correction for Selection Bias
Instrumental Variable Approach
Gives internally valid causal effects for individuals whose treatment status is manipulable by the instrument
Candidates: the combination of covariates from Chapter 2 as an instrument for the treatment (i.e., use of new drug, such as Lipitor)
With patient’s pre-adoption status in the instruments to avoid patient self-selection
However, may reduce statistical power
Note: we can see if patients actually self-select into treatment
But: instruments (predicts adoption) may also affect the dependent variable (measures for health outcome)?
Correction for Selection Bias
Selection on Observables
Propensity Score Matching
Analysis of the Effects of Unobservables?
Cost Analysis
Lipitor Costs (Taiwan NHID formulary 2004, in USD):
$1.04 per 10 mg tablet; $1.40 per 20 mg; $1.75 per 40 mg
What are the cost savings?
If new drug reduces emergency and hospital services
Savings = reduced cost in emergency and hospital services – increased drug costs
What are the additional costs?
If new drug has not health outcome impact?
Additional cost = difference in price of new and old drugs
Distribution of new Lipitor takers
“Treatment” vs. “Non-Treatment”
Graphical Evidence – ER visits No adjustment for selection bias
Graphical Evidence – ER visits (1009 Lipitor takers)
Graphical Evidence – Smoothed ER visits (1009 Lipitor takers)
Graphical Evidence – ER visits (656 consistent takers)
Graphical Evidence – Smoothed ER visits (656 consistent takers)
Graphical Evidence – Average Length of Stay (1009 Lipitor takers)
Graphical Evidence – Smoothed average lengths of stay (1009 Lipitor takers)
Graphical Evidence – Average lengths of stay (656 consistent takers)
Graphical Evidence – Smoothed average lengths of stay (656 consistent takers)
Graphical Evidence – Average Hospital Expenditures
Graphical Evidence – Average expenditures (1009 takers)
Graphical Evidence – Smoothed average expenditures (1009 takers)
Graphical Evidence – Average expenditures (656 consistent takers)
Graphical Evidence – Smoothed average expenditures (656 consistent takers)
Discussion
Consistent Lipitor use does lead to better health outcomes?
Not just selection bias if consistency does improve health outcome?
But suggestive evidence that healthier patients are more likely to receive Lipitor consistently?
But: numerous possibilities for errors while merging
2004 data consistently slightly “bizarre”
Treatment indicator very rough. 1 prescription of Lipitor over 2 visits = 50% treatment
Need to consider consistency over a prescribed period of time: 3 months?
What did they take before Lipitor?
Need to include all indications for use of Lipitor
Need to adjust for patient heterogeneity
SELECTION ISSUES
Future Agenda
Better understand
Drug adoption decisions, based on chapter 1
Quest for proper instrument
Hypertension, Hypertensive Heart Diseases, Diabetes, High Cholesterol
Clinical trial results for the new drugs
Thank you for your attention and valuable assistance
◄Chapter 3► Do physicians consider patient out-of-pocket expenses when prescribing drugs?
Research Question
Do physicians consider patient out-of-pocket expenses?
In August 1999, Taiwan implemented a modest, linear prescription drug copayment system
Patients with one of 97 chronic conditions can be exempt from outpatient prescription copayments if physicians give an “chronic illness extended prescription certificate”
As of 2005, only 13% of eligible patient-visits receive the extended prescription certificate
Do physicians with high practice volume only give the extended prescription certificate? Or do patients have to demand the certificate?
Literature Review
Three bodies of literature:
Impact of cost-sharing on patients’ drug utilization choice:
Soumerai et al (1987, 1991, 1994), Nelson (1984), Tamblyn (2001).
Physician consideration of patient out-of-pocket expenses
Only survey studies available:
Contribution and Limitation
Contribution
As far as I know, first paper to investigate through non-survey data whether physicians consider patient out-of-pocket expenses in their prescribing behavior
Policy implications:
Greater payment for physicians to give certificate; or greater effort to inform patients of their financial rights
Limitation
Copayment is insignificant (capped at $3.33 USD until 2001, then capped at $6.66 USD)
Generalizability?
Correlation Study
Conceptual Framework
Physicians generally earn greater income through increased practice volume
Physicians give certificates if the already have high practice volume
Or patients may demand certificate: proxied by competition and patient sophistication
Or both
Empirical Strategy
First: Fixed Effects Regression
Investigate effects of copayment on number of drugs, prescription duration, adjusted drug amount, and adjusted drug quantity
Empirical Strategy
Second: Logit/Probit Estimation
Effects of physician practice volume, patient sophistication level, and market competition on the likelihood of giving “extended prescription certificate”
Data Files
Ambulatory Care Expenditures by Visit
Details of Ambulatory Care Orders
Inpatient Expenditures by Admission
Details of Inpatient Orders
Expenditures for Prescriptions Dispensed at Contracted Pharmacies
Details of Prescriptions Dispensed at Contracted Pharmacies
Ambulatory Care Expenditures by Visit
Details of Ambulatory Care Orders
Inpatient Files
Inpatient Expenditures by Admission
Identification information; patient age and gender; date of admission and release; ICD9CM codes, ICD operation codes, DRG code, various fees, various copay amounts
Details of Inpatient Orders
Identification information; drug dispensed or services rendered
