How to Improve Out-of-Pocket Spending on Specialty Drugs

Despite having Medicare Part D insurance, many beneficiaries still pay thousands of dollars out-of-pocket each year on specialty drugs, which can place a serious financial burden on some individuals. The authors of a study published by The American Journal of Managed Care suggest changing the program to include policy changes that help patients predict monthly medication costs.

Specialty drugs are often used to treat life-threatening conditions, such as cancer, and can cost thousands of dollars each year. Unfortunately, these drugs have become too expensive for many elderly patients to afford.

"Our study found that under current policy, Medicare patients with chronic myeloid leukemia, a form of blood cancer that can be treated with life-saving medications, had to pay an average of $2,452 for their medicines in January alone," said lead author Jalpa A. Doshi, PhD. "That's almost twice the average monthly Social Security benefit."

Under Part D, there is no maximum annual spending limit, which is unlike traditional commercial plans. This structure can cause patients to spend thousands out-of-pocket each month, and can place a significant financial burden on sick patients. Approximately half of Medicare beneficiaries have incomes less than $24,150, which highlights the need to cap out-of-pocket spending, according to the study.

"Our findings underscore that policies need to pay attention not only to how much patients are required to pay during the year, but also to when they are required to pay it," Dr Doshi said.

The authors examined Medicare data for patients in the Part D program in 2012. Patients treated with specialty drugs for rheumatoid arthritis or multiple sclerosis spend an average of $3949 and $5238, respectively, for covered medications, according to the study.

The authors also discovered that patients with chronic myeloid leukemia paid $6322 for 1 year of treatment, with more than half of spending within the first 2 months.

The research team has previously conducted studies that show high out-of-pocket costs impact treatment adherence.

"Difficulty affording prescriptions is associated with inconsistent adherence, which could lead to adverse outcomes down the line," Dr Doshi said. "It's important that we help patients manage their monthly costs so they can get the medications they need."

The study also analyzed how proposed changes to the Medicare Payment Advisory Commission would affect beneficiaries. They found that the changes would reduce overall costs for some patients, but increase it for others. However, all beneficiaries would face high costs at the beginning of the year, according to the study.

The investigators suggest that creating monthly and annual out-of-pocket costs would address high and variable monthly drug costs, which could provide consistency for patients.

"Energy companies already offer this sort of payment plan so that families aren't faced with unmanageable winter heating bills," Dr Doshi said. "This approach is particularly important for many seniors who live on fixed incomes."

Additionally, this proposal would be relatively simple to implement and would not cost much, but could improve patient outcomes.

"The reality is that any proposed change needs to be financially sustainable," Dr Doshi concluded. "We found that our suggested changes could be financed by an additional cost of only $1.96 per month, or $23.55 per year, per beneficiary."