Harvard University, Cambridge, MA
Background: Public reports suggest increasing integration of in-house specialty pharmacies by independent and system-based oncology practices. Understanding the impact of such integration has important implications for state-level regulations limiting physicians’ ability to launch pharmacies in certain states and policies governing pharmacy network design. In this analysis, I document the growth of in-house pharmacies and estimate the impact of this growth on oral cancer drug use and quality. Methods: I used 2006-2017 data from Medicare Fee-for-Service and Part D claims, pharmacy names and characteristics from health plan pharmacy network lists and the National Plan and Provider Enumeration System, and a unique Health System and Practice Dataset, developed by National Bureau of Economic Research and Harvard University researchers, that tracks practice ownership relationships. I first linked physician organizations and pharmacies that they operate using a novel claims-based algorithm combining information on pharmacy characteristics, similarities in names of practices and pharmacies, and the share of total pharmacy spending attributable to a single practice or system. I then used an event study approach to compare oral oncolytic use and quality at practices launching a pharmacy between 2009 to 2014 compared with matched controls. Outcomes included total spending on oral oncolytics, use of oral drugs when an intravenous equivalent exists (capecitabine and 5-fluoruracil), timeliness of new prescription fills (# days from first fill to last office visit), medication adherence, and early discontinuation of lenalidomide, tyrosine kinase inhibitors, aromatase inhibitors, tamoxifen, enzalutamide, and abiraterone. Results: The number of independent or system-based oncology practices with an in-house pharmacy filling any oncology prescriptions increased from 135 in 2006 to 442 in 2017. In that time, the share of Medicare Part D spending on oral oncolytics filled at in-house pharmacies increased from 4% in 2006 to 27% in 2017. The launch of an in-house pharmacy was not associated with an overall increase in spending on oral oncolytics, but was associated with a 4.5 percentage point (p =.01) increase in the use of capecitabine relative to 5-fluorouracil, within 2 years of launch. In-house pharmacies were associated with a modest decrease in the time to fill an initial prescription (2.4 days, p <.001) within 2 years of launch, but no improvements in adherence or reductions in early discontinuation. Conclusions: There has been substantial growth in the use of in-house pharmacies in oncology in recent years. Having an in-house pharmacy only had modest effects on cost and quality. Policymakers should therefore approach claims that in-house pharmacies meaningfully impact cost and quality with caution.
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