- Medicare Part D enrollees with serious illness can expect extraordinary out-of-pocket healthcare costs as they seek drugs for their conditions, according to a recent analysis from the Kaiser Family Foundation (KFF).
“The findings come at a time when the public has expressed concern about the rising cost of prescription drugs and policymakers are considering ways to curb such spending, especially in public programs like Medicare and Medicaid,” the researchers said.
The analysis used data from the Medicare Plan Finder online tool. Using the cost calculator to look at 2019 rates for over two dozen specialty drugs, the KFF researchers were able to calculate out-of-pocket spending for patients with cancer, hepatitis C, multiple sclerosis, or rheumatoid arthritis.
For a Medicare Part D enrollee who did not qualify for low-income subsidies, out-of-pocket costs could range from $2,622 (for hepatitis C drug Zepatier) to $16,551 (for leukemia drug Idhifa). These numbers are based on a full year of use.
These patient costs stem from the cost-sharing methodologies allowed to Medicare Part D plans. Part D plans may initially charge enrollees a 25 to 33 percent coinsurance for specialty tier drugs such as those studied. Once the patient reaches the coverage gap, plans may charge 25 percent cost-sharing.
And when the patient reaches the catastrophic phase – set at $5,100 in drug spending for 2019 – Part D plans reduce cost-sharing to 5 percent.
“While specialty tier drugs are taken by a relatively small share of enrollees, spending on these drugs has increased over time and now accounts for over 20 percent of total Part D spending, up from about 6 to 7 percent before 2010,” the researchers said.
A considerable amount of patient spending occurs during the catastrophic phase, the researchers said. For patients taking Zepatier, 13 percent of their out-of-pocket spending happens during the catastrophic phase. For those taking Idhifa, 86 percent of their spending comes during this phase.
On average, 60 percent of patient costs come during the catastrophic phase.
Going into 2019, it may be easier for patients to reach the catastrophic phase, the researchers added. Drug prices are growing, the researchers said, meaning patients will reach the $5,100 threshold sooner.
What’s more, not all of the drugs studied were covered by Medicare Part D. Only drugs that fall into one of the six protected class categories were covered under the plan. Costs for drugs not covered by Part D ranged from $26,209 (for Zepatier) to $145,769 (for Gleevec, a leukemia medication).
There is some good news, the researchers acknowledged. The closure of the Medicare Part D “doughnut hole,” which refers to the Part D coverage gap for generic drugs, will reduce out-of-pocket spending for most beneficiaries.
However, those with serious illness who need to access these specialty drugs and who run the risk of reaching the catastrophic phase are likely to incur even higher costs.
The healthcare industry is working to address out-of-pocket drug costs. CMS has proposed reconfigurations to the Medicare Part B and Part D drug formularies. These changes would ideally give plans more negotiating power that would cut drug costs and pass savings along to patients.
Earlier this week, new legislation was introduced aimed at cutting drug costs for patients.
Co-sponsored by Senators Bill Cassidy, MD, (R-LA) and Mark Warner (D-VA), the Patient Affordability, Value and Efficiency Act aims to address payment models that would impact pharmaceuticals and other healthcare services.
The legislation is the senators’ effort to support value-based purchasing arrangements. By making it easier for payers and providers to enter into value-based arrangements for drugs and other services, Cassidy and Warner hope to improve the healthcare marketplace and place more value on effective treatments.
“In recent years, skyrocketing prescription drug prices and health costs have made it more difficult for Americans and communities to access lifesaving care,” Senator Warner said in a statement. “That’s why I’ve teamed up with Sen. Cassidy to re-align the way Americans are charged for prescription drugs and other health care costs. With input from experts and key stakeholders, we’ll be able to ensure that pharmaceutical companies and medical device manufacturers are incentivized to develop more effective treatments at a better price.”
Cassidy echoed those sentiments, stating that driving more value-based payments will improve patient care access and care quality.
“To lower the cost of health care, we should leverage new ideas and new approaches, and I’m proud Louisiana is helping to lead the way,” said Dr. Cassidy. “We are crafting this legislation to implement innovative, market-based solutions to increase patient access to care and make medications more affordable.”