After Doughnut Hole Closure, Oral Anticancer Drug Costs Still Too High for Many

Studies show that cost is a factor in patient adherence to their oral anticancer medications, but the financial burden of oral chemotherapy drugs is projected to still be too high for millions of patients even when the Medicare Part D coverage gap, or “doughnut hole,” is fully closed.

Researchers analyzed 3334 Medicare formularies to identify insurance companies’ drug costs and cost-sharing designs of oral chemotherapy medications, as well as out-of-pocket costs for beneficiaries who do not receive low-income subsidies. The study, published in the Journal of Clinical Oncology, found that in 2010, oral chemotherapy drugs cost the average patient $8100 per year.

After the Affordable Care Act (ACA) closes the doughnut hole fully in 2020, researchers predict that beneficiaries will still spend an average of $5600 per year in out-of-pocket costs for these medications.

“While closing the doughnut hole will benefit many Part D enrollees, individuals using expensive drugs will continue to face very high out-of-pocket spending,” lead author Stacie Dusetzina, PhD, assistant professor at the University of North Carolina Eshelman School of Pharmacy and Gillings School of Global Public Health and member of Lineberger Comprehensive Cancer Center, said in a statement. “These high drug costs may result in people not taking their medications as they should. That makes therapies less effective, which wastes time and money and has health and financial consequences for the patient.”

Medicare Part D has been offered through private health insurance since 2006 and is a key payer for oral chemotherapy medications. Part D’s doughnut hole is a gap in coverage that occurs once the beneficiary exceeds the drug coverage limit of $2960. Once the limit is breached, a cost sharing of 100% in out-of-pocket drug costs goes into effect until the catastrophic level of $4700 is reached.

The ACA’s provision to close the doughnut hole is intended to reduce cost sharing in yearly increments from 100% to 25% by 2020. However, with an average price of more than $10,000 per month for oral anticancer therapies covered by Medicare in 2014, out-of-pocket costs after closing the gap will still exceed what the average beneficiary’s household spends on food each year.

Investigators used the Medicare July 2014 Prescription Drug Plan Formulary, Pharmacy Network, and Pricing Information Files from the Centers for Medicare & Medicaid Services (CMS) to identify 1114 stand-alone and 2230 Medicare Advantage prescription drug formularies.

Analyzing specifically dabrafenib (Tafinlar) and sunitinib (Sutent), the researchers found that annual out-of-pocket costs ranged from $6456 for dabrafenib to $12,160 for sunitinib. Assuming that the drug prices remain stable, the authors estimate an average of $5663 in out-of-pocket-costs across products, saving beneficiaries only about $2550 per year.

The authors note that drug adherence to oral therapies decreases as patients move into the doughnut hole, and findings of minimal variation in costs across formularies suggest that patients have few options in reducing financial burden by selecting a different coverage plan.

“With consideration of the rising prices for specialty drugs over the past decade, any projected cost savings from closing the doughnut hole likely would be lost for these drugs,” the authors conclude. “Efforts should be made to improve affordability of specialty drugs for Medicare beneficiaries given that medication nonadherence and a forgoing of basic needs are associated with high out-of-pocket medication costs.”