Infographic

Most Medicare Part D Plans Incentivize Use of Generics, Study Finds

September 18, 2020

For medications with both brand-name and generic versions, an overwhelming majority of Medicare Part D plans encouraged the use of generics over their brand-name equivalents in 2019, according to a study published in Health Affairs. By analyzing Part D formulary coverage and tier placement of matched brand-name drugs and generics, the researchers found that 84% of Part D plan-product combinations covered the generic only in 2019, while 15% covered both brand-name and generic versions. In 2019, of the 1,361 drug products analyzed, there were 98% of products for which generics were placed on a lower cost-sharing tier than their brand-name counterparts in at least one plan in 2019.

by Jinghong Chen

For medications with both brand-name and generic versions, an overwhelming majority of Medicare Part D plans encouraged the use of generics over their brand-name equivalents in 2019, according to a study published in Health Affairs. By analyzing Part D formulary coverage and tier placement of matched brand-name drugs and generics, the researchers found that 84% of Part D plan-product combinations covered the generic only in 2019, while 15% covered both brand-name and generic versions. In 2019, of the 1,361 drug products analyzed, there were 98% of products for which generics were placed on a lower cost-sharing tier than their brand-name counterparts in at least one plan in 2019.

NOTE: The study was funded by a grant from Arnold Ventures.

SOURCE: “Medicare Part D Plans Rarely Cover Brand-Name Drugs When Generics Are Available,” Health Affairs 39, NO. 8 (2020): 1326–1333. Visit https://bit.ly/3k37XC5.

Commercial Fees for Clinician-Delivered Services Averaged 122% of Medicare Rates in 2017

September 11, 2020

The amount that private insurers paid for professional health care services (i.e. those delivered by a clinician) were, on average, 122% of Medicare rates nationally in 2017, according to a recent Health Care Cost Institute report. In seven states, the average commercial prices exceeded 150% of Medicare rates, while eleven states saw average clinician fees within 10% of Medicare. Though no state reported payments higher than 200% of Medicare rates, five metro areas in Wisconsin had prices above this threshold. Places with higher commercial prices tended to be in the Northwest, and in the areas around large cities.

by Jinghong Chen

The amount that private insurers paid for professional health care services (i.e. those delivered by a clinician) were, on average, 122% of Medicare rates nationally in 2017, according to a recent Health Care Cost Institute report. In seven states, the average commercial prices exceeded 150% of Medicare rates, while eleven states saw average clinician fees within 10% of Medicare. Though no state reported payments higher than 200% of Medicare rates, five metro areas in Wisconsin had prices above this threshold. Places with higher commercial prices tended to be in the Northwest, and in the areas around large cities.

NOTES: Data from Alaska, Minnesota and Rhode Island were not available. The analysis relied on data from three large national health insurers: CVS Health Corp.’s Aetna, Humana Inc., and UnitedHealthcare.

SOURCE: “Comparing Commercial and Medicare Professional Service Prices,” Health Care Cost Institute. Visit https://bit.ly/2YBV7lU.

Part D Base Beneficiary Premium Will Grow Slightly in 2021

September 4, 2020

The monthly Medicare Part D base beneficiary premium for 2021 will be $33.06, up from $32.74 in 2020, according to recent CMS projections. Meanwhile, the Part D national average monthly bid amount dropped slightly, from $47.59 in 2020 to $43.07 in 2021. While regional low-income premium subsidy amounts fluctuated over the past six years, 46 states are projected to see an increase in 2021. Hawaii is projected to see the biggest growth, with its average subsidy amount going up from $25.21 in 2020 to $31.12 in 2021.

by Jinghong Chen

The monthly Medicare Part D base beneficiary premium for 2021 will be $33.06, up from $32.74 in 2020, according to recent CMS projections. Meanwhile, the Part D national average monthly bid amount dropped slightly, from $47.59 in 2020 to $43.07 in 2021. While regional low-income premium subsidy amounts fluctuated over the past six years, 46 states are projected to see an increase in 2021. Hawaii is projected to see the biggest growth, with its average subsidy amount going up from $25.21 in 2020 to $31.12 in 2021.

SOURCE: CMS. Visit https://go.cms.gov/3hwGZ4P. Infographic compiled by AIS Health.

Pricey Drugs and Discounts Cause Part D Costs to Shift to Medicare

August 28, 2020

In addition to unveiling details on its proposal to overhaul the Medicare Advantage quality bonus program (RMA 6/18/20, p. 3), the Medicare Payment Advisory Commission (MedPAC) in its June report to Congress recommended major reforms to the Part D program that would shift more drug costs from Medicare to payers and drug manufacturers (see pie charts below). Citing the use of high cost drugs pushing beneficiaries into the catastrophic phase of the benefit as leading to greater reinsurance spending, MedPAC once again recommended changing Medicare’s reinsurance subsidy from 80% to 20%. MedPAC would also do away with the coverage gap discount program and require drugmakers to provide discounts of at least 30% in the catastrophic phase.

by Carina Belles and Lauren Flynn Kelly

In addition to unveiling details on its proposal to overhaul the Medicare Advantage quality bonus program (RMA 6/18/20, p. 3), the Medicare Payment Advisory Commission (MedPAC) in its June report to Congress recommended major reforms to the Part D program that would shift more drug costs from Medicare to payers and drug manufacturers (see pie charts below). Citing the use of high cost drugs pushing beneficiaries into the catastrophic phase of the benefit as leading to greater reinsurance spending, MedPAC once again recommended changing Medicare’s reinsurance subsidy from 80% to 20%. MedPAC would also do away with the coverage gap discount program and require drugmakers to provide discounts of at least 30% in the catastrophic phase.

MedPAC also suggested that under the current Part D structure, how much manufacturers will have to pay in coverage gap discounts may factor into their decisions about price increases or launch prices, and pointed out that coverage gap discounts for relatively low priced drugs make up a larger share of drugmakers’ revenues. “For drugs and biologics with prices near or above the catastrophic threshold, manufacturer discounts in the coverage gap are small compared with their revenue from Part D prescriptions,” the commission wrote. The table below outlines this phenomenon using 2018 data.

SOURCE: MedPAC’s June 2020 Report to Congress. Visit www.medpac.gov.

Current Market Access to Shingrix

August 21, 2020

Sales of GlaxoSmithKline plc.’s vaccine Shingrix plummeted in 2020, as few people ventured out for vaccination amid the coronavirus pandemic. For the shingles vaccine, more than 75% of covered lives are under the preferred tier/preferred with prior authorization or step therapy and covered tier/covered with PA/ST under the pharmacy benefit across all formularies. Over the last year, the market saw significant shifts in access to Shingrix, with more people getting coverage under commercial and health exchange formularies. The graphics below show how the vaccine is covered among commercial health plans, health exchange programs and Medicare and Medicaid programs, and their utilization management restrictions.

by Jinghong Chen

Sales of GlaxoSmithKline plc.’s vaccine Shingrix plummeted in 2020, as few people ventured out for vaccination amid the coronavirus pandemic. For the shingles vaccine, more than 75% of covered lives are under the preferred tier/preferred with prior authorization or step therapy and covered tier/covered with PA/ST under the pharmacy benefit across all formularies. Over the last year, the market saw significant shifts in access to Shingrix, with more people getting coverage under commercial and health exchange formularies. The graphics below show how the vaccine is covered among commercial health plans, health exchange programs and Medicare and Medicaid programs, and their utilization management restrictions.

NOTES: Under the pharmacy benefit, the covered lives under commercial, health exchange, Medicare and Medicaid formularies are 171.2 million, 10.5 million, 46.7 million and 63.9 million, respectively. Under the medical benefit, the covered lives under commercial, health exchange, Medicare and Medicaid formularies are 169.3 million, 10.5 million, 48.5 million and 63.9 million, respectively.

SOURCE: Managed Markets Insight & Technology, LLC database as of August 2019 and 2020.