CMS: 88 Part D, Medicare Advantage insurers sign up for insulin copay model

The Trump administration announced 88 Medicare Advantage and Part D plan sponsors have applied to lower insulin costs for the 2021 plan year in a bid to grapple with the rising expense of the diabetes treatment.

The Centers for Medicare & Medicaid Services (CMS) said Tuesday that means more than 1,750 standalone plans have decided to participate in the Part D Senior Savings Model. Participating Part D plans will provide Medicare beneficiaries with insulin capped at a $35 copay for a monthly supply.

That $35 copay will extend from the beginning of the year and through the Part D coverage gap.

The goal of the model is to address a major disincentive that insurers have to offer drugs at a lower cost. A Part D plan can offer drug plans that provide lower cost-sharing in the coverage gap, but the plan sponsor must take on costs that usually a drugmaker would pay.

“These costs are then passed on to beneficiaries in the form of higher premiums,” according to a CMS release.

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The model would allow manufacturers to continue paying the full coverage gap discount for their products. Part D plans must also require lower cost-sharing for no more than $35 a month, which can be attained by applying manufacturer rebates.

Drugmakers are still on the hook for their 70% discount in the Part D coverage gap. However, for manufacturers in the model, their discount payments will be calculated before the “application of supplemental benefits under the model—which will reduce the out-of-pocket costs of insulin for Medicare beneficiaries,” CMS said.

Major insulin makers Novo Nordisk, Eli Lilly and Sanofi have signed up for the model.

“Both manufacturers and Part D sponsors responded to this market-based solution in force and seniors that use insulin will reap the benefits,” CMS said in a release.

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CMS projects that beneficiaries that use insulin and pick a plan in the five-year model can possibly see average savings of 66% (or $446) for insulin.

The agency hopes the model will give a stable and predictable cost for insulin, which can vary from month to month under a normal plan.

CMS Administrator Seema Verma hinted that the model could be extended to other types of drugs but didn’t say which ones.

“We think this creates a foundation and platform to fix some of the problems that we have in the Part D plan,” she told reporters on a call Tuesday.