New research from Avalere suggests that moving Part B drugs into Part D could result in higher out-of-pocket costs for beneficiaries with rheumatoid arthritis (RA) unless policy changes are made to reduce Part D cost sharing.
Medicare covers biologic therapies, including biosimilars, that treat rheumatoid arthritis (RA) under either Part B or Part D depending on whether the drugs are physician-administered or self-administered, respectively. Under its blueprint to lower drug prices for American patients, the Trump administration has signaled an interest in consolidating coverage for these drugs under Part D as a way to facilitate negotiation of discounts for these products.
However, new research from Avalere suggests that moving Part B drugs into Part D could result in higher out-of-pocket costs for beneficiaries with RA unless policy changes are made to reduce Part D cost sharing.
Avalere reached this conclusion after analyzing prescription drug event data and Part B claims for 2016 in a cohort of 250,000 Medicare beneficiaries who had claims for drugs including adalimumab, certolizumab pegol, etanercept, infliximab, rituximab, and other RA therapies. They found that, after accounting for patients’ supplementary coverage or low-income subsidies, average annual out-of-pocket costs for Part B-covered drugs was $1380, versus $1990 for Part D-covered drugs.
This divergence in out-of-pocket spending stems from the fact that Part B beneficiaries generally pay 20% coinsurance for physician-administered therapies, and supplemental plans available to Part B beneficiaries can help to cover deductibles, coinsurance, and copayments. However, Part D, which covers self-administered drugs, does not allow for supplemental plans. According to Avalere’s analysis, Part D plans subject all covered RA drugs to coinsurance, typically in the range of 25% to 33%.
“Without benefit design changes, shifting [RA] drugs from Part B into Part D may lead to higher out-of-pocket costs for many Medicare patients,” said Matt Brow, president of Avalere. “The impact on individuals may vary based on the medication they take or the Part D plan they choose.”
Avalere also found that Part D plans only cover RA therapies without utilization-management strategies—like step therapy—only 6% of the time, while Part B drugs are not currently subject to such utilization management. However, recent CMS policy changes will allow Medicare Advantage plans, which cover approximately 32% of beneficiaries, to use step therapy for both Part B and Part D drugs as of 2019, despite vigorous opposition from groups such as the American College of Rheumatology and the Arthritis Foundation.
“The proposal to move drugs from Part B into Part D may subject more patients to utilization management for [RA] medications,” said Richard Kane, senior director at Avalere. “As a result, beneficiaries may find it more difficult to access care.”
Funding for Avalere’s research was provided by The Pharmaceutical Research and Manufacturers of America.