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On the President’s Drug Cost Plan, Three Important Concerns

May 24, 2018
Part 2. Upending Access in Medicare Part B program

This week, BIO launched a three-part blog series highlighting proposals in the Trump administration’s drug cost plan that could pose significant challenges for patients and their access to the medicines they need. Part 1 of this series looked at possible changes to the Medicare Part D prescription drug benefit program. Today, we look at proposed reforms to the Medicare Part B medical insurance program.

Upending Access in the Medicare Part B Program

The Medicare Part B program covers a limited set of drugs requiring administration and supervision in a physician office or hospital out-patient setting, such as therapies for patients fighting cancer, multiple sclerosis, and rheumatoid arthritis. While these medicines represent only 3% of all Medicare spending, they are often more costly treatments for a unique group of patients facing complex health problems.

Medicines provided under Part B are subject to a 20% beneficiary coinsurance requirement, with most beneficiaries acquiring supplemental coverage to help lower their out-of-pocket costs. In contrast, drugs reimbursed under Medicare Part D, which usually covers lower-cost prescriptions patients obtain at a retail pharmacy and take themselves, are often subject to higher cost sharing requirements and supplemental coverage is generally not available.

Under the Trump administration’s drug pricing plan, some medicines currently covered by the Medicare Part B program would move over to Part D. While the proposal raises more questions than answers, arbitrarily shuffling certain drugs from one program to another will lead to higher out-of-pocket costs for many vulnerable patients.

A 2011 analysis commissioned by the Centers for Medicare & Medicaid Services studied the shift of six classes of drugs from Part B to Part D, and the results were not encouraging.

  • Nearly 50 percent of the savings to Medicare would be generated from higher costs to beneficiaries, with each beneficiary paying an estimated $210 more on average.

  • Savings to Medicare were projected to be less than 1% of total Part D spending on prescription drugs (an estimated $154 million).

Research released just this week reaffirms the concern that the proposal may have the opposite effect of lowering drug costs for patients. According to the nonpartisan health research firm Avalere, in 2016, out-of-pocket costs were roughly 33% higher for new cancer therapies covered under Part D ($3,200) than those covered under Part B ($2,400).

Recognizing these concerns, the American Cancer Society Cancer Action Network has warned such a proposal could force cancer patients to “choose between their life and lifesavings.” They also warn the proposal could “compromise patient safety” by altering the way these medicines are administered. The group further noted:

“Most Part B therapies are physician-administered, are often temperature sensitive and require particular handling, and have specific administration requirements that - if compromised – could undermine the efficacy of the treatment. Moving the drugs to Part D could impact how the drugs are administered with the potential to compromise patient safety.”

Moving specialized treatments for patients with complex conditions from Part B to Part D would risk subjecting beneficiaries to substantially higher out of pocket costs for their medicines, while doing little to save money for Medicare. The goal of any reform of our nation’s drug cost ecosystem should be to improve patient access to affordable medicines. There are clear reasons to believe this proposal will not reach that goal.


Read part 1

Read Part 3