1. Medicines Play a Key Role in Improving
Health While Reducing Avoidable Costs
Pharmaceutical Research and Manufacturers of America

2. Overview
Proper medication adherence lowers overall healthcare costs due to offsets in related costs
(i.e., hospitalization, emergency care visits)
Poor medication adherence = higher Proper medication adherence saves
overall healthcare costs patients money on healthcare
Research shows that treatment gaps and Potential cost savings from appropriate
lack of adherence to physician-prescribed use of medicines can be significant,
medications lead to higher spending on especially for the growing number of
otherwise avoidable medical care. Americans with chronic health conditions.
Prescription medicines play a key role in:
• Maintaining health
• Reducing mortality
• Preventing emergency room visits/hospitalizations
• Improving worker productivity Pharmaceutical Research and
Manufacturers of America

3. How does access and adherence to medicines
affect health outcomes and medical costs?

4. Medicare Part D Improves Access to Medicines & Lowers Costs
Medicare Part D has increased access to medicines for patients
while lowering out-of-pocket costs.
Part D coverage has led to spending reductions in Medicare for hospitals
and nursing homes.
Pharmaceutical Research and
Manufacturers of America
Read More: J.M. McWilliams et al. “Implementation of Medicare Part D and Nondrug Medical Spending for Elderly Adults With Limited Prior Drug Coverage.” Journal of the
American Medical Association, July 27, 2011.

5. Prescription Medication Use Reduces Hospitalization Costs
According to a 2009 study, adherent use of prescription medicines significantly reduced Medicare
spending for inpatient hospitalizations.
Study authors say their finding “suggests that drugs are not only
cost-effective but actually save money for Medicare
beneficiaries.”
Key Medication Adherence Facts:
• Each additional prescription drug fill reduces hospital
costs by about 0.5% (when measured at the mean level
of Medicare payments in 2000)
• The average cost of beneficiaries experiencing at least
one inpatient hospitalization in 2000 was $10,425 per
person hospitalized
Pharmaceutical Research and
Manufacturers of America
Read More: B.C. Stuart et al. “Assessing the Impact of Drug Use on Hospital Costs.” Health Services Research, February 2009.

6. Access to Medicines Results in Significant Medicare Savings
A recent Harvard study in JAMA found that Part D saves
.
Medicare about $1,200 per year in hospital, nursing home and
other costs for each senior who previously lacked
comprehensive prescription drug coverage.
According to other experts, this finding led to overall savings to
Medicare of $13.4 billion in 2007, the first full year of Part D.
This represents more than one quarter of Part D’s total cost
during that time.
Key Access to Medicines Facts:
• Medicare beneficiaries with little to no prior drug benefits
increased their use of medicines after enrolling in Part D
• Part D enrollees in this category increased monthly drug
spending by $27, but decreased overall monthly medical
spending by $46
Pharmaceutical Research and
Manufacturers of America
Read More: C.C. Afendulis and M.E. Chernew. “State-Level Impacts of Medicare Part D.” American Journal of Managed Care, October 2011 Supplement.
http://jama.jamanetwork.com/article.aspx?articleid=1104150

7. Medication Adherence Lowers Overall Patient Costs
Even though patients who adhere to their medication schedule spend
more on prescription medicines, additional spending is more than
offset by substantial reductions in spending on other medical care.
Adherence can lead to significant reductions in emergency
department visits and inpatient hospital days for patients
with four chronic conditions.*
Pharmaceutical Research and
Manufacturers of America
* Congestive heart failure, hypertension, diabetes and dyslipidemia
Read More: M.C. Roebuck et al. “Medical Adherence Leads to Lower Health Care Use And Costs Despite Increased Drug Spending.” Health Affairs, January 2011.

8. Medication Adherence Leads to Lower Overall Healthcare Costs
How does adherence lower costs for hypertension?
Highly adherent patients with hypertension have substantially lower total healthcare costs
than non-adherent patients, and costs increase as adherence decreases.
Pharmaceutical Research and
Manufacturers of America
Read More: D.G. Pittman et al. “Antihypertensive Medication Adherence and Subsequent Healthcare Utilization and Costs.” American Journal of Managed Care, August 2010.

9. Medication Adherence Leads to Lower Overall Healthcare Costs
How does adherence lower costs for cardiovascular disease?
Commercially insured patients with high rates of adherence to statins had
significantly lower healthcare costs and lower risks of cardiovascular disease.
Pharmaceutical Research and
Manufacturers of America
Read More: D.G. Pittman et al. “Adherence to Statins, Subsequent Healthcare Costs, and Cardiovascular Hospitalizations.” American Journal of Cardiology, June 2011.

10. Medication Adherence Leads to Lower Overall Healthcare Costs
How does adherence lower costs for diabetes?
For diabetes patients, a high level of medication adherence is
associated with lower disease-related medical costs.
Cost of Diabetes
Pharmaceutical Research and
Manufacturers of America
Read More: M.C. Sokol et al. “Impact of Medication Adherence on Hospitalization Risk and Healthcare Cost.” Medical Care, June 2005.

11. Medication Adherence Leads to Lower Overall Healthcare Costs
Proper use of diabetes medicines significantly reduces the risk of disease-related complications.
In 2011, better adherence to diabetes medicines resulted in significantly
lower Medicare spending on hospital and physician services, and these
savings exceeded the estimated cost of the drugs.
Pharmaceutical Research and
Manufacturers of America
Read More: T.B. Gibson et al. “Cost-Sharing, Adherence, and Health Outcomes in Patients with Diabetes.” American Journal of Managed Care, August 2010.

12. Poor Adherence Leads to Undesirable Outcomes
How does adherence lower costs for osteoporosis?
Proper adherence to osteoporosis medicines greatly reduces
medical costs, particularly hospitalization and long-term care
costs.
Similar results were seen for Medicare Advantage enrollees
with low levels of adherence.
Key Osteoporosis Facts:
• Osteoporosis fractures alone cost an estimated
$19 billion in 2005, and are projected to cost $25
billion by 2025
• Highly compliant patients cut their risk of
fracture by 25%
• Patients with highest rates of adherence spent
$1,273 less on total medical costs on average
Pharmaceutical Research and
Manufacturers of America
Read More: R. Halpern et al. “The Association of Adherence to Osteoporosis Therapies with Fracture, All-Cause Medical Costs, and All-Cause Hospitalization: A Retrospective
Claims Analysis of Female Health Plan Enrollees with Osteoporosis.” Journal of Managed Care Pharmacy, January/February 2011.

13. Capping Prescription Coverage Has Little Effect on Total Health Care Costs
Seniors with a $1,000 benefit cap under Medicare+Choice were
less likely to use medicines appropriately and experienced
unfavorable clinical outcomes, including death, according to a
NEJM study.
Savings from lower use of medicines were almost completely
offset by increases in hospitalization and emergency care costs.
Pharmaceutical Research and
Manufacturers of America
Read More: J. Hsu et al. “Unintended Consequences of Caps on Medicare Drug Benefits.” New England Journal of Medicine, June 1, 2006.

14. Appendix: Sources
Slide 4
J.M. McWilliams et al. “Implementation of Medicare Part D and Nondrug Medical Spending for Elderly Adults With Limited Prior Drug Coverage.” Journal of the
American Medical Association, July 27, 2011.
Slide 5
B.C. Stuart et al. “Assessing the Impact of Drug Use on Hospital Costs.” Health Services Research, February 2009.
Slide 6
C.C. Afendulis and M.E. Chernew. “State-Level Impacts of Medicare Part D.” American Journal of Managed Care, October 2011 Supplement.
Slide 7
M.C. Roebuck et al. “Medical Adherence Leads to Lower Health Care Use And Costs Despite Increased Drug Spending.” Health Affairs, January 2011.
Slide 8
J. Hsu et al. “Unintended Consequences of Caps on Medicare Drug Benefits.” New England Journal of Medicine, June 1, 2006.
Slide 9
D.G. Pittman et al. “Antihypertensive Medication Adherence and Subsequent Healthcare Utilization and Costs.” American Journal of Managed Care, August
2010.
Slide 10
D.G. Pittman et al. “Adherence to Statins, Subsequent Healthcare Costs, and Cardiovascular Hospitalizations.” American Journal of Cardiology, June 2011.
Slide 11
M.C. Sokol et al. “Impact of Medication Adherence on Hospitalization Risk and Healthcare Cost.” Medical Care, June 2005.
Slide 12
T.B. Gibson et al. “Cost-Sharing, Adherence, and Health Outcomes in Patients with Diabetes.” American Journal of Managed Care, August 2010.
Slide 13
R. Halpern et al. “The Association of Adherence to Osteoporosis Therapies with Fracture, All-Cause Medical Costs, and Pharmaceutical Research and
Manufacturers of America
All-Cause Hospitalization: A Retrospective Claims Analysis of Female Health Plan Enrollees with Osteoporosis.” Journal of
Managed Care Pharmacy, January/February 2011.