Analysis: Medicare Reform May Increase Access Barriers, Costs for Rheumatoid Arthritis Drugs

The Trump administration’s American Patients First drug pricing blueprint provides several proposals intended to drive down prescription medication costs, one of which includes shifting Medicare Part B drugs into Part D.

However, Medicare patients with rheumatoid arthritis (RA) could face higher out-of-pocket costs under the proposed coverage consolidation in the absence of additional benefit design policy changes, according to a new study from Avalere Health.

Currently, Medicare covers a variety of RA treatments either under Part B or Part D, depending on the drug’s administration method. How much Medicare patients pay out of pocket depends on several different factors, including income, health status, type of coverage, formulary design, and price of prescribed therapies. As such, a patient’s out-of-pocket costs can vary substantially between Part B and Part D due to differing benefit designs.

Avalere’s analysis found that patients with RA often pay higher out-of-pocket costs and face more access barriers for RA drugs covered under Part D compared with those covered in fee-for-service (FFS) Medicare under Part B. The analysis was based on prescription drug event data and Medicare Part B FFS claims for 2016 under a CMS research data use agreement.

“Without benefit design changes, shifting rheumatoid arthritis drugs from Part B into Part D may lead to higher out-of-pocket costs for many Medicare patients,” Matt Brow, president at Avalere, said in a press release. “The impact on individuals may vary based on the medication they take or the Part D plan they choose.”

Under Part B FFS, patients typically pay 20% of the total cost of medical services, including for medications administered in a provider’s office. Although supplemental plans are available to Part B FFS beneficiaries to cover costs such as deductibles, coinsurance, and copayments, they are not permissible under Part D. However, under Part D, only self-administered prescription medications are covered and benefit design structure requires some out-of-pocket spending for patients who do not quality for low-income subsidies.

Based on the analysis, Prescription Drug Plans subject all Part D-covered RA therapies to coinsurance, most frequently in the range of 25% to 33%, according to Avalere.

In 2016, the average annual out-of-pocket costs for Part B-covered RA drugs was $1380, compared with $1990 for drugs covered by Part D, according to the analysis. Additionally, moving drugs from Part B into Part D may subject more patients to utilization management, such as prior authorization and step therapy. RA drugs covered under Part B are not subject to utilization management, which allows a wider range of therapeutic options for patients. Under Medicare Part D, the analysis found that RA drugs are only covered without any utilization management 6% of the time, which could make it more difficult for patients to access care.

According to Avalere, the analysis does not include Medicare Advantage plans, which represent approximately 32% of beneficiaries.

References

Rheumatoid Arthritis Patients Could Face Access Barriers Under Proposal to Address Drug Prices [news release]. Avalere’s website. http://avalere.com/expertise/life-sciences/insights/rheumatoid-arthritis-patients-could-face-access-barriers-under-proposal-to. Accessed October 18, 2018.