Hwang TJ, et al. – Given US Department of Health and Human Services' proposal to shift coverage of certain drugs from Medicare Part B to Part D, researchers assessed the association of this shift with total drug spending and patient cost-sharing. Their findings suggested a possible reduction in total drug spending but with an increase in out-of-pocket costs for some Medicare beneficiaries, including those with Medicare supplement insurance. The investigators, therefore, urged the Department of Health and Human Services to ensure that the proposed drug pricing reforms benefit both patients and payers.

Methods

• Researchers undertook a retrospective drug cohort study of the 75 brand-name drugs associated with the highest Part B expenditures among fee-for-service Medicare beneficiaries in 2016.
• The main outcomes and measures comprised estimated total Medicare spending in Part B and Part D; annual out-of-pocket costs in Part B and under the standard 2018 Part D benefit; and proportion of drugs in Part D’s protected drug classes (immunosuppressants for prophylaxis of organ transplant rejection, antidepressants, antipsychotics, anticonvulsants, antiretrovirals, and anti-neoplastics).

Results

• For the 75 brand-name drugs with the highest Part B expenditures, total Medicare Part B spending was estimated to be $21.6 billion annually at 2018 prices.
• For these drugs, total Part D drug spending under the proposed policy was estimated to range between $17.6 billion and $20.1 billion after rebates, corresponding to a 6.9% to 18.3% decrease in drug spending in Part D vs Part B.
• They also noted that 33 of the 75 drugs (44.0%), which accounted for $9.5 billion (43.9%) in Part B spending, were in protected Part D classes.
• For 67 drugs with available information, comparator high-income countries had a median of 45.8% to 59.7% lower prices for 65 (97.0%) drugs when compared with Part B drug prices.
• For all 75 brand-name drugs, median patient cost-sharing of $4,683 (IQR, $1,069-$9,282) per year was noted in Part B.
• Among Medicare beneficiaries without Medicaid or Part B supplemental insurance (Medigap), shifting Part B drugs to the 2018 standard Part D benefit was found to reduce out-of-pocket costs by a median of $860 (IQR, −$3,884 to $496).
• Lower cost-sharing is expected in Part D than in Part B for all drugs for beneficiaries who would qualify for the low-income subsidy program in Part D.
• Among beneficiaries with Medigap insurance, those with Part D coverage showed estimated Part D out-of-pocket costs exceeding average Medigap premium costs by a median of $1,460, and those without Part D coverage showed an increase by a median of $1,952.