canadian border crossing for prescription drugs
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- 1. Canadian Border Crossing for Prescription Drugs: Evidence from Medicare Drug Discount Card Data M. Christopher Roebuck 1 Yun Wang 1 1 CVS Caremark, Hunt Valley, MD 2nd Biennial Conference of theAmerican Society of Health Economists Durham, NC June 23, 2008
- To estimate the extent to which seniors were filling prescriptions in Canada prior to the implementation of Medicare Part D
- American consumers must incur time and travel costs to conduct these transactions in person.
- Thus, an individuals net economic benefit from border crossing for prescription drugs should depend on his proximity to Canada (cost) and his potential out-of-pocket drug cost savings (benefit).
- Reference pricing policies lead to cheaper medications at Canadian pharmacies relativeto the U.S.
- Much anecdotal evidence in the mainstream media on seniors visiting Canada to fill their prescriptions
- Reports of bus trips from northern border states, some even encouraged by public officials (e.g., Warren, Michigan)
- However, little or no scientific investigation
- In a 2006 national survey of Medicare beneficiaries, 5% of Part D-enrolled seniors reported having purchased prescription drugs from Canadian or Mexican pharmacies; 10% among those without drug coverage (Neuman et al., 2007).
- The most obvious research design would require obtaining prescription claims data on Americans from Canadian pharmacies.
- Instead of examining thepresenceof prescriptions in Canada, we look at theabsenceof prescriptions in the U.S.
- If individuals living closer to Canada have lower domestic pharmacy utilization rates, this might indicate that they are receiving medications from across the border.
- Also, this driving distance effect on utilization should theoretically also differ by generic/brand and insured/uninsured.
5. Medicare Drug Discount Card
- Created via the Medicare Modernization Act
- A temporary program (enrollment period: June 2004 - December 2005) for non-dual eligible beneficiaries
- Offered discounts on prescription drugs
- Transitional Assistance Program (TAP)provided a $600 annual subsidy to seniors withincome below 135% of the federal poverty level.
- Cardholders may have been charged an enrollment fee of up to $30 per calendar year.
- Medicare Drug Discount Card (MDDC) Sample
- Eligibility and pharmacy claims data from 15 MDDC programs managed by CVS Caremark
- Included 15,082 cardholders with 6 months ofenrollment and1prescriptions from 6/1/2004 through 11/12/2005
- Non-seniors and TAP subsidy recipients excluded
- Employer-Insured (EI) Sample
- Used the same inclusion criteria
- 38,531 employer-insured seniors
- Studied for comparison
- Datasets geo-coded using street address and ZIP code
- Manually recorded X-Y coordinates for 83 intersections of the U.S. road network and Canadian border
- Estimated driving time in hours to nearest border crossing
- Using travel speeds by U.S. highway type and cost-weighted distance function
- Analyzed seniors residing within 15 hours of Canada (midpoint of the 0-31 hour range)
- Others excluded given their proximity to Mexico
- Gamma-log link generalized linear models (GLM) of annualized generic and brand pharmacy utilization were estimated as functions of:
- Log out-of-pocket costs
- Log hours driving time to Canada
8. Geo-Coding EI Sample MDDC Sample 9. U.S. Road Network 10. Distance to U.S.-Canadian Border 11. Descriptive Statistics Notes:MDDC = Medicare Drug Discount Card; EI = employer-insured; OOP = out-of-pocket.Presented are mean values with standard deviations in parentheses.All variable means are statistically different (p