Lower Cost Topical Steroids Could Save Millions

Low-cost generic topical steroids could save Medicare $944.8 million.

Dermatologists commonly prescribe topical steroids for the treatment of numerous skin disorders, including eczema and contact dermatitis. These drugs reduce inflammation in the skin and prevent or reduce disease symptoms.

Despite the fact that a majority of topical steroid prescriptions are for generics, findings from a study published by JAMA Dermatology show a significant increase in Medicare Part D and out-of-pocket spending for patients treated with these drugs.

The study results suggest that a cheaper topical steroid may be able to control the disease, while saving money. This is the most recent study to find that increases in generic drugs result in high costs for the industry and patients.

The retrospective study included data from the Medicare Part D Prescriber Public Use File, which contains information about spending on generic and branded drugs. The authors specifically looked at topical steroid prescriptions filled between 2001 and 2015.

During this time, the investigators found that Part D expenditures on topical steroids reached $2.3 billion, while patients paid $333.7 million in out-of-pocket costs for the drugs, according to the study.

Prescriptions for topical steroids only increased from 7.7 million in 2001 to 10.6 million in 2015 — a change of 37% – from 2011 to 2015; however, the authors found that both Medicare spending and out-of-pocket costs increased substantially.

Annual Medicare spending skyrocketed 226.5% — from $237.6 million to $775.9 million – and out-of-pocket costs increased 145.9% - from $41.4 million to $101.8 million, according to the study.

The authors found that the use of cheaper generics could result in millions of dollars of savings. Cheaper generics would have saved Medicare $944.8 million and saved $66.6 million in out-of-pocket costs for patients from 2001 to 2015.

While physicians may have to change their prescribing habits, lower cost generic topical steroids could result in millions of savings for patients and Medicare without sacrificing outcomes.

"The increasing costs of generic steroids have led to massive increases in Medicare spending and increased out-of-pocket costs for our patients who are over 65," said senior study author Arash Mostaghimi, MD, MPA, MPH. "As physicians, we have prescription habits, but our research shows we need to identify cheaper options for patients, especially those who are older, on Medicare and have fixed incomes. We also need to work as a society to limit arbitrary increases in the costs of generic medications and give physicians the tools to identify and prescribe the cheapest drugs possible. This will improve patients' access to care while saving millions."