President Trump's call to lower prescription drug prices by leveraging Medicare must accommodate significant price differences.
The Trump administration's announced efforts to fold prescription drugs offered under Medicare Part B into Part D must account for substantial out-of-pocket price differences among beneficiaries, according to analysis by Avalere Health.
The Washington, D.C.–based healthcare consultancy highlighted the potential complexities of enacting aspects of the drug-pricing proposal in a report released Monday.
According to the study's authors, Health and Human Services should formulate an effective policy that addresses a beneficiary's income level, the mix of drugs a patient has, as well as the potential upward pressure on Part D premiums from shifting Part B drugs.
“Medicare beneficiaries typically have lower out-of-pocket costs in Part B – especially since so many seniors carry supplemental coverage,” said Richard Kane, senior director at Avalere. “Any proposal for shifting drugs to Part D needs to account for these differences.”
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Below are highlights from Avalere's analysis:
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If cancer therapies or high-cost drug therapies were to switch from Part B to Part D, many Medicare patients would pay more out-of-pocket.
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Avalere attributes this to patients purchasing supplemental health coverage for Part B medical services and are therefore not eligible for low-income cost-sharing services in Part D.
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However, if the switch were implemented, Medicare patients without supplemental health coverage and those eligible for low-income cost-sharing services would pay less out-of-pocket.
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In 2016, the average out-of-pocket costs were 33% higher for Part D-covered cancer therapies than for those under Part B.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.