Pension & Benefits News Out-of-pocket costs for specialty drugs expected to rise in 2019
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Thursday, February 14, 2019

Out-of-pocket costs for specialty drugs expected to rise in 2019

By Pension and Benefits Editorial Staff

Medicare Part D enrollees who do not receive low-income subsidies can expect to pay thousands of dollars in out-of-pocket costs in 2019 for specialty drugs in treating hepatitis C, multiple sclerosis, rheumatoid arthritis, and cancer. According to research by the Kaiser Family Foundation (KFF), the expected annual out-of-pocket costs in 2019 average $7,994 for 28 specialty tier drugs in treating hepatitis C, multiple sclerosis, rheumatoid arthritis, and cancer. The KFF issue brief noted that Medicare Part D enrollees will pay 12 percent more in annual out-of-pocket costs than in 2016, on average for certain specialty drugs, even as the coverage gap for brands was closing.

According to researchers, Medicare Part D enrollees who do not qualify for low-income subsidies can face substantial out-of-pocket costs for expensive medications because there is no hard cap on spending in the Part D benefit. Part D enrollees who need specialty tier drugs that are not covered by their plan could be exposed to substantial costs—which would likely mean not filling a prescription for the off-formulary drug and instead taking a therapeutic substitute.

Researchers analyzed 28 specialty drugs and found significant out-of-pocket costs for drugs in treating hepatitis C, multiple sclerosis, rheumatoid arthritis, and cancer. While out-of-pocket costs for some hepatitis C drugs have decreased since their introduction, Part D enrollees still pay thousands of dollars for these medications. Based on a full year of use, hepatitis C drugs range from $2,622 for Zepatier® to $5,633 for Sovaldi®. Part D enrollees taking specialty tier drugs for rheumatoid arthritis or multiple sclerosis also face high costs for their drugs. Drugs used to treat multiple sclerosis range from $6,507 for Avonex® to $7,409 for glatiramer acetate (the generic equivalent of Copaxone®). Patients taking drugs for rheumatoid arthritis can expect to pay annual out-of-pocket costs in 2019 ranging from $4,372 for Kevzara® to $5,471 for Humira®. The most expensive specialty drug among the 28 drugs studied was Idhifa®, used to leukemia, with annual out-of-pocket expenses at $16,551.

Part D enrollees taking high-cost specialty tier drugs can incur significant costs in the catastrophic phase. Sixty percent of the expected annual out-of-pocket costs for the 28 drugs studied in 2019 would occur in the catastrophic phase, on average, which translates to $5,329 in out-of-pocket costs in the catastrophic phase alone. With the now-complete closure of the Part D coverage gap for brand-name drugs, enrollees can expect to face lower annual out-of-pocket costs for selected specialty tier drugs below the catastrophic threshold in 2019 compared to 2016, but higher costs above—driven by an increase in underlying total costs between 2016 and 2019.

The KFF study noted that the high cost of prescription drugs has contributed to growing public support for the government to take action to address drug costs. Eighty percent of Americans say the cost of prescription drugs is unreasonable, and there is broad support among political parties for several different options to lower drug costs. The Trump Administration has endorsed a number of proposals to address rising drug costs for Medicare and beneficiaries, including adding a hard cap on Part D out-of-pocket spending. The Trump Administration has also proposed changes to reduce spending on drugs covered under Part B, including a proposal to benchmark U.S. prices against prices set internationally. Members of Congress are moving forward with proposals to reduce drug costs, including allowing Medicare to negotiate drug costs, letting patients import prescription drugs from Canada, and expediting the introduction of generic and other prescription drugs. As more expensive drugs come to market in the future, the high cost of prescription drugs will continue to be a pressing issue for both policymakers and patients.

SOURCE: www.kff.org

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