Study: Shifting drugs from Medicare Part B to Part D could hit some beneficiaries where it hurts—their wallets 

Woman paying for a prescription at a pharmacy
Some beneficiaries may face higher out-of-pocket costs if drugs move from Medicare Part B to Part D. (Getty/Tom Merton)

Moving pricey Medicare Part B drugs into Part D could bring down drug spending overall, but it may also hit the wallets of some beneficiaries harder, according to a new study. 

Researchers led by a team from Brigham and Women’s Hospital and Harvard Medical School found that shifting some of the costliest Part B drugs into Part D would decrease total drug spending by between 7% and 18% after rebates. 

However, the impact on patients’ out-of-pocket costs would likely vary depending on their supplemental benefits, according to the study. For the majority of drugs, beneficiaries without supplemental plans saw their out-of-pocket costs go down, but estimated cost-sharing actually increased for between about 29% and 39% of drugs. 

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Beneficiaries who qualify for subsidies in Part D would see the greatest benefit, according to the study, while those with Medigap policies in addition to Part D saw out-of-pocket costs that are higher than premiums for between about 63% and 75% of drugs included the study. 

“To achieve long-term cost savings, additional reforms may need to be implemented simultaneously,” the researchers said. “Such reforms might include value-based pricing, flexible formularies that improve the ability of plans to negotiate lower prices for drugs in protected classes and reducing the government’s reinsurance subsidy in Part D.” 

RELATED: CMS may narrow its focus on drug costs to Part B 

The research, which was published in JAMA Internal Medicine, focused on 75 brand-name drugs with the highest Part B costs in 2016. 

The Trump administration has touted Part D as an effective model for competitive, market-based reform as it targets rising drug prices, especially as it allows plan sponsors to negotiate prices directly. The Centers for Medicare & Medicaid Services has also taken steps to enhance that negotiation power further by unveiling a policy that would allow Part D plans to negotiate prices for drugs in protected classes

Moving more drugs into Part D was a cornerstone idea in the White House drug pricing policy blueprint called American Patients First released last May.  

Healthcare consulting firm Avalere also warned, however, that moving certain drugs from Part B into Part D could lead to higher costs for some beneficiaries. High-cost therapies, such as complex cancer drugs, should especially be studied closely to mitigate this risk, Avalere concluded. 

Despite these potentially negative projections, CMS has made reforming Part B a clear priority since the blueprint’s release. It issued a policy that would allow Medicare Advantage plans to negotiate Part B prices and will allow them to implement step therapy for these drugs. 

In addition, the administration intends to demonstrate nationwide a new payment model in Part B called the International Pricing Index, which would peg prices for these drugs to prices paid overseas.

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