Keeping you updated on the latest Medicare and Part D news

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Medicare Part D Patients Bear The Cost Of ‘Me Too’ Brand-Name Drugs

A 2016 study by Health Affairs has found that the prescribing of “me too” brand name drugs instead of the equivalent generic therapeutics is costing Medicare beneficiaries 10.5 times more in copays ($42 vs. $4).  These “me too” drugs are brand name drugs that come to market when there already is a generic therapeutic substitute on the market. As the patent for Prilosec was about to expire, Nexium came to market as a similar therapy, but has a slightly different chemical make-up. Manufacturers provide rebates to insurance companies to classify these drugs as “preferred” drugs on plan’s formularies. Preferred brand drugs usually have higher copays than generics do.

The two drugs studied, Nexium and Crestor, have generic therapeutic equivalents (omeprazole and atorvastatin, respectively) that are scientifically proven to be equally as effective as a treatment, thus classifying them as “me too” drugs. In 2013, prescribing omeprazole over Nexium would have saved $870 million dollars. The savings are even higher for prescribing atorvastatin over Crestor, with an estimated $1.208 billion in savings. Nexium and Crestor are significantly more expensive than their generic counterparts, despite each having one million less claims than the generic option.

The increasing burden of prescription drug costs on the Medicare program and its beneficiaries has many physician groups advocating for the prescribing of generic drugs over branded drugs when both drugs are similarly effective. Overall, the consensus is, “Don’t use expensive medications when an equally effective and lower-cost medication is available.”



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Prescription drug costs increase greatly, according to Medicare data

Bloomberg BNA is reporting that Part D spending by Medicare between 2013 and 2014 increased by 17% overall. Bloomberg used recently released data from CMS to analyze the costs of nearly 3000 brand name and generic drugs covered by Medicare Part D. They found that the price of approximately 200 drugs rose by more than 50% during that time.

The Bloomberg BNA-produced graphics below depict some of the largest price increases observed in both brand name and generic drugs.





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[Update] Mylan to offer generic EpiPen

Mylan, the pharmaceutical company that makes EpiPens, has announced that it will soon sell a generic version of the emergency epinephrine delivery product used to treat severe allergic reactions. The generic product will be identical to the existing product but will cost half as much, with a list price of $300 for a two-pack. Mylan’s EpiPen pricing strategy attracted considerable negative attention recently, despite efforts to lower out of pocket costs for consumers. The introduction of an identical generic product has not assuaged critics who continue to question why the company would not simply reduce the retail price of the branded product.


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Medicare ordered to clarify when it will pay for skilled nursing and rehab

The Jimmo Settlement Agreement filed on August 17, 2016 clarifies that CMS is required to provide skilled nursing and rehabilitation services to at least maintain a  beneficiary’s condition. A federal judge in Vermont ruled that CMS has two months to create a plan to educate providers and auditors about this maintenance standard which heretofore was a source of much confusion. The financial impact of the settlement remains to be seen.

Jimmo Settlement Agreement

Jimmo FAQ

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Drug company Mylan to lower the cost of EpiPens for some consumers

Pharmaceutical company Mylan announced plans today to reduce the cost of it’s emergency EpiPen product used to treat serve allergic reactions. The company’s practice of steadily increasing the price of EpiPens beginning in 2007 has recently drawn the attention and ire of patients and politicians alike.

Mylan’s plan to reduce the cost of EpiPens is to offer some patients discount cards that provide up to $300 off the cost of a pack of two EpiPens. The retail price of EpiPens will remain the same however so Medicare, Medicaid, and insurance companies may still have to pay the full price.

The drastic price hike of the drug Daraprim by Turing Pharmaceuticals last fall resulted in similar public outrage and media attention, as noted in this AcuPartD blog post from September 22, 2015.


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Medicare Part D prescription drug cost data released by CMS

On August 18, 2016, CMS released prescription drug data to the public for the second year in a row. The privacy-protected data set contains information on prescription drugs covering 38 million enrollees during calendar year 2014 and was produced in part by Acumen’s Part D team! The roughly $121 billion in prescription drug spending under the Medicare Part D Program in 2014 represents a 17% increase over the previous year. New this year are aggregated groups focused on prescription drug categories of interest including opioids, antibiotics, antipsychotics, and the use of high-risk medications in the elderly.

A CMS produced fact sheet on the 2014 Medicare Part D prescriber data is located here.

The 2014 Medicare Part D prescriber data, including links to interactive data sets, is available here.