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.
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.”
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.