As regulators work to increase competition and lower costs in the insulin market, CMS has released a new Medicare model intended to lower co-pays for insulin products to a maximum of $35.
As regulators work to open up the biosimilar market to spur competition and lower drug prices for patients, especially insulin products, CMS has announced a new model that will lower Medicare beneficiaries’ out-of-pocket (OOP) co-pays for insulin to a maximum of $35 per 30-day supply.
The Part D Senior Savings Model is designed to enhance Part D plans that offer more generous prescription drug coverage than Part D basic benefit designs. The model “provides an innovative market-driven approach that removes barriers to lower insulin costs,” CMS Administrator Seema Verma said.
Those who take insulin and are enrolled in a participating plan are expected to save an average of $446 in annual OOP costs for insulin. That is a savings of over 66% compared with average cost sharing for insulin currently. The model projects savings from this for the federal government over the next 5 years to be over $250 million, largely due to pharmaceutical manufacturers paying additional coverage gap discounts.
“As beneficiaries have more consistent, predictable access to the prescription drugs they need, the model projects that health will improve and total cost of care will decline for our nation’s seniors,” CMS stated.
OOP costs for insulin in Medicare’s Part D can fluctuate from month to month, which can make prescription drug budgeting challenging, as well as affect access to needed medication. Without the ability to afford insulin, many patients may resort to medication rationing or stop insulin therapy altogether.
“Medication nonadherence, due to cost or otherwise, could have devastating health consequences for seniors, ranging from nerve and vision damage to kidney and cardiovascular disease and even amputations,” CMS noted.
The model will test a plan design for enhanced Part D plans to make sure co-pays are predictable for a broad range of formulary insulins, including rapid-acting, short-acting, intermediate-acting, and long-acting insulins.
Under the model, enhanced Medicare plans will be able to reduce cost sharing by having fixed dollar co-pays instead of making OOP co-pays a percentage of a drug’s price.
Enhanced plans have slightly higher premiums, which are paid for by beneficiaries or through a Medicare Advantage plan. Current Part D average monthly premiums are $32.09 for basic plans and $49.32 for enhanced plans. About 80% of prescription drug plans are enhanced plans, with enrollment of about 25 million patients.
CMS views the new model as an opportunity for Part D sponsors and manufacturers to come together and put the needs of patients before profits, as well as lower the out-of-pocket costs for insulin.
While CMS works to make insulins more affordable for Medicare beneficiaries, the FDA is working to pave the way for more competition in the insulin market through the biosimilar pathway. A provision in the Biologics Price Competition and Innovation Act will go into effect on March 23 that allows insulins and other protein-based drugs to be approved as biologics, a move that affects many products originally classified as small molecule drugs.
The FDA finalized its definition of biological products by removing the parenthetical “except any chemically synthesized polypeptide” from the protein category, permitting all insulin products to be approved under the new pathway regardless of development processes.
Julie Reed: Why 2024 Is Important for Biosimilars
April 17th 2024Julie Reed, executive director of the Biosimilars Forum, showcases how the biosimilar industry is expected to develop throughout 2024, including major policy changes and hope for continued improvement in market share for adalimumab biosimilars.
A New Chapter: How 2023 Will Shape the US Biosimilar Space for 2024 and Beyond
December 31st 2023On this episode of Not So Different, Cencora's Brian Biehn and Corey Ford take a look back at major policy and regulatory advancements in 2023 and how these changes will alter the space going forward.
BioRationality: Removing the Misconceptions Surrounding Interchangeability
April 15th 2024Sarfaraz K. Niazi, PhD, outlines the current state of interchangeable biosimilars in the US and policy changes needed to clear up misconceptions surrounding the meaning behind interchangeability designations.
What AmerisourceBergen's Report Reveals About Payers, Biosimilar Pricing Trends
May 28th 2023On this episode of Not So Different, Tasmina Hydery and Brian Biehn from AmerisourceBergen discussed results from a recent survey, that were also presented at Asembia 2023, diving into the payer perspective on biosimilars and current pricing trends across the US biosimilar industry.
Rising Biosimilar Adoption for an Italian Payer Will Benefit National Health Care System, Patients
April 9th 2024Data from 2021 and 2022 indicates increasing biosimilar use in an Italian health care company, with potential for full adoption in the future, benefiting both the National Health System and citizens through efficient and sustainable health care policies.