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How Devastating Drug Price Increases Are Harming America’s Seniors

Posted by www.psmbrokerage.com Admin on Wed, Mar 28, 2018 @ 12:44 PM

Manufactured Crisis: How Devastating Drug Price Increases Are Harming America’s Seniors

How Devastating Drug Price Increases Are Harming America’s Seniors-1

As policymakers gear up to address rising drug costs, a new report highlights just how much prices have gone up in recent years.

View the full report

The prices of some of the most popular brand-name drugs have increased by 12% on average each year from 2012 to 2017, based on Medicare Part D data, according to a report released by Sen. Claire McCaskill, D-Mo. That's 10 times greater than the rate of inflation during that same period.

Though the number of these prescriptions decreased by 48 million in that window, profits increased by $8.5 billion. Twelve of the 20 medications included in McCaskill's report saw prices increase by 50% between 2012 and 2017. For six drugs, prices increased by more than 100% during that period.

"Can you imagine if you went to an auto dealership and last year's exact model was being sold at a 20% markup, and then you went back the next year and it had happened again?" McCaskill said in a statement. "That's exactly what's happening in the prescription drug industry, where the cost of identical drugs skyrockets year after year."

RELATED: Hospitals—not pharma—to blame for rising healthcare costs, drug experts say

McCaskill's report comes as the Trump administration is planning a multi-pronged approach to lower the drug costs. During his State of the Union address, President Donald Trump said controlling drug costs is a major goal for his administration in the coming year.

The White House's plan includes pushing pharmacy benefit managers to share rebates directly with members, an issue that has been a matter of contention between payers and pharmaceutical companies. Payers take the savings from rebates and apply them across the board to lower premiums, though copays are based on a drug's list price, not the price after rebates.

Drugmakers have deflected blame for rising drug costs by pointing a finger at PBMs.

RELATED: UnitedHealthcare to share drug rebates with 7M members; the Trump administration approves, says HHS' Alex Azar

The administration's plan for drug prices, which was compiled by the Council of Economic Advisers, also suggests that some generic drugs should be offered for free and takes aim at "free-riding" abroad, where countries that have single-payer health systems purchase drugs at a low price, leading pharmaceutical companies to jack up the price for patients in the U.S.

Increasing profits, these companies argue, is crucial to funding additional drug research and development.

Some experts said that the administration's plan is unlikely to drive down costs. Critics have also been skeptical that Department of Health and Human Services Secretary Alex Azar, who headed Eli Lilly's U.S. operations, will lead the charge on drug prices.

McCaskill's report notes that Medicare beneficiaries' spending on drugs is expected to continue to grow over the next several years. Prior research projects that that spending on medications will rise from 41% of per capita Social Security income to 50% by 2030.

Drug prices are a major concern among healthcare executives, and a recent survey shows that 70% feel they may need to operate their own pharmacies to help control costs.

View the full report

Source: https://www.fiercehealthcare.com/finance/rising-drug-prices-healthcare-costs-claire-mccaskill

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Tags: Part D Premiums, Part D, Prescription Drugs, medicare updates

Proposed Changes to Medicare Prescription Drug Coverage

Posted by www.psmbrokerage.com Admin on Fri, Feb 16, 2018 @ 09:41 AM

Summary of Recent and Proposed Changes to Part D

Summary of Recent and Proposed Changes to Medicare Part D

On February 9, 2018 the President signed into law the Bipartisan Budget Act of 2018 (BBA of 2018), which included some provisions related to Medicare Part D prescription drug coverage. Just days later, on February 12, the Office of Management and Budget (OMB) released the President’s fiscal year (FY) 2019 budget, which also included several proposals related to Medicare Part D drug coverage and Part B drug reimbursement.

This brief summarizes these recent and proposed changes. Budget estimates for provisions in the BBA of 2018 reflect the 10-year (2018-2027) effects as estimated by the Congressional Budget Office. Budget estimates for proposals in the President’s FY2019 budget reflect the 10-year (2019-2028) effects as estimated by OMB.1

Summary of Changes in the BBA of 2018

  • Part D coverage gap and manufacturer discount: Closes the Part D coverage gap in 2019 instead of 2020 by accelerating a reduction in beneficiary coinsurance from 30 percent to 25 percent in 2019; also increases the discount provided by manufacturers of brand-name drugs in the coverage gap from 50 percent to 70 percent, beginning in 2019. In 2019 and later years, Part D plans will cover the remaining 5 percent of costs in the coverage gap, which is a reduction in their share of costs (down from 25 percent). The manufacturer discount will continue to count towards a beneficiary’s “true out-of-pocket spending” (TrOOP), the spending amount that triggers the start of catastrophic coverage. Estimated budget impact: not estimated separately by CBO; included in biosimilars provision below
  • Biosimilars: Beginning in 2019, biosimilars will be treated the same as other brand-name drugs in the Part D coverage gap, with manufacturer discounts of 70 percent; previously biosimilars were not included in the coverage gap discount program. Estimated budget impact: -$10.05 billion
  • Income-related Medicare premiums: Increases Medicare Part B and Part D premiums for beneficiaries with incomes of $500,000 (for individuals) and $750,000 (for married couples) or more, to 85 percent of program costs, up from 80 percent, beginning in 2019. Estimated budget impact: -$1.63 billion

Summary of Proposed Changes in the President’s FY2019 Budget


  • Share rebates with Part D enrollees: Would require Part D plans to pass on at least one-third of total rebates and price concessions to enrollees at the point of sale. The Administration solicited comments on potential policy approaches related to this idea in a November 2017 proposed rule for the Medicare Advantage and Part D programs. Estimated budget impact: +$42.16 billion
  • Add an out-of-pocket limit to Part D and change reinsurance: Would establish an out-of-pocket limit in the Part D benefit by phasing down beneficiary coinsurance in the catastrophic coverage phase of the benefit from the current 5 percent level to 0 percent (no cost sharing) over four years, beginning in 2019.2 Also would increase plans’ share of costs in the catastrophic coverage phase of the benefit from 15 percent to 80 percent, and decrease Medicare’s reinsurance from 80 percent to 20 percent. The Medicare Payment Advisory Commission (MedPAC) recommended similar changes to Part D reinsurance in 2016. Estimated budget impact: +$7.36 billion
  • Change TrOOP calculation: Would exclude manufacturer discounts from the calculation of beneficiaries’ “true out-of-pocket spending.” MedPAC also recommended this change, in combination with the proposed changes to catastrophic coverage above. Estimated budget impact: -$47.02 billion
  • Change Part D formulary standards: Would loosen Part D plan formulary standards by requiring plans to cover a minimum of one drug per drug category or class, down from the current two-drug requirement. Would expand plans’ ability to use utilization management tools for specialty drugs and drugs in the six protected classes (anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals, and immunosuppressants for the treatment of transplant rejection). Estimated budget impact: -$5.52 billion
  • Eliminate cost sharing for generics for low-income enrollees: Would eliminate cost sharing on generic drugs for Part D enrollees receiving the low-income subsidy (LIS), including biosimilars and preferred multisource drugs, beginning in 2019. MedPAC recommended a similar change in 2016. Estimated budget impact: -$0.21 billion
  • Retroactive Part D coverage for low-income enrollees: Would permanently authorize CMS to contract with a single Part D plan to provide Part D coverage to low-income beneficiaries while their LIS eligibility is processed, beginning in 2020; this is currently a demonstration program scheduled to run through 2019. Estimated budget impact: -$0.30 billion


  • Average sales price data reporting: Would require manufacturers of Part B drugs to report average sales price (ASP) data and would authorize the Secretary of Health and Human Services (HHS) to apply civil monetary penalties if manufacturers do not meet reporting requirements, beginning in 2019. Estimated budget impact: no budget impact
  • Establish a limit on Part B reimbursement growth rate: Would establish an inflation limit for reimbursement of Part B drugs paid based on ASP, with the growth in the ASP portion of Medicare’s reimbursement to physicians for these drugs (currently ASP plus 6 percent) limited to growth in the Consumer Price Index for all Urban Consumers (CPI-U), beginning in 2019. Currently there is no limit on updates to the ASP plus 6 percent reimbursement if the ASP increases. Under the budget proposal, reimbursement to physicians for Part B drugs paid based on ASP would be the lesser of actual ASP plus 6 percent or the inflation-adjusted ASP plus 6 percent. Estimated budget impact: not available
  • Coverage of certain Part B drugs under Part D: Would authorize the HHS Secretary to consolidate coverage of certain drugs under Part D that are currently covered under Part B, beginning in 2019, subject to a determination that there are savings to be gained from the consolidation (shifting from the ASP plus 6 percent reimbursement under Part B to negotiated pricing under Part D). Estimated budget impact: not available

Source: http://files.kff.org/attachment/Issue-Brief-Summary-of-Recent-and-Proposed-Changes-to-Medicare-Prescription-Drug-Coverage-and-Reimbursement-Policy

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Tags: Part D Premiums, Medicare Part D, Part D

Closing the gap on the 'Doughnut Hole'

Posted by Guadalupe Cantu on Fri, Oct 11, 2013 @ 11:43 AM

Medicare Supplements The Affordable Care Act rollout last week was not all smooth sailing. It faced multitudes of glitches and hiccups online; as well as, offline. Despite its rocky start, the Affordable Care Act aims to reduce the Medicare coverage gap, also known as the "doughnut hole," by 2014 and completely close it by 2020, according to Medicare.gov.

Before the Affordable Care Act, benefactors would have to pay their insurance yearly deductible in out-of-pocket cost until their medical expense limit reached the copay of $4500.00, before any coverage premiums would kick in.

In 2014, with the Affordable Care Act, beneficiaries begin with the monthly Part D premiums and pays 100% of the drug cost until satisfying the $310 deductible. Then the plan pays for the rest of the cost of the medicine until hitting the expenses cap of $2850.00; a 25% out-of-pocket drop in copay. That’s when seniors are faced with the doughnut hole, once more.

The dreaded “doughnut hole” – is the difference seniors out-of-pocket drug expenses begins, after their Part D premiums coverage cap has been exceeded, and before they are eligible for the amount the government pays for "catastrophic" drug coverage.

Since 2010, the Medicare gap has been slowly closing through steady drug discounts. This is largely due to the government reaching out to pharmaceutical industry and bargaining for drug discounts. Discounts for brand name drugs and generic will continue. By next year, were expected to pay 47.5% for premium brand pharmaceuticals names and 72% for generic ones.

By 2020, Medicare Part D enrollees will save 75% on both premium and generic medication, according to the Centers for Medicare & Medicaid Service.

Resource: Boomerbenefits.com

Please give us your feedback!
Is the ACA program better than what we had before? Do you think it will truly make Insurance more competitive and affordable?

Source: LifeHealthPro & Centers for Medicare & Medicaid Service

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Tags: Obamacare, Doughnut Hole, Part D Premiums, Medicare, Affordable Care Act, Affordable Care

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