Keeping you updated on the latest Medicare and Part D news

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Medicare may be permitted to negotiate prescription drug prices under Trump administration

There has been much confusion about the Trump administration’s vision for heath care in America.  Repeated calls to replace the Affordable Care Act and promises to not dismantle Medicare on the campaign trail are still fresh in American’s minds though Trump has provided few details or proposals. President Trump proposed often that Medicare should be able to leverage its buying power to negotiate better drug prices.  Trump presented this idea often on the campaign trail and recently said the following during a January 11 news conference:

I think a lot of industries are going to be coming back. We have to get our drug industry coming back. Our drug industry has been disastrous. They’re leaving left and right. They supply our drugs, but they don’t make them here. To a large extent. And the other thing we have to do is create new bidding procedures for the drug industry because they’re getting away with murder.
Pharma, pharma has a lot of lobbies, a lot of lobbyists and a lot of power. And there’s very little bidding on drugs. We’re the largest buyer of drugs in the world, and yet we don’t bid properly. And were going to start bidding and were going to save billions of dollars over a period of time.

Medicare is currently not permitted to participate in the negotiation of drug prices between pharmaceutical companies and insurance companies that provide Part D prescription drug plans.  Many experts believe negotiating the prices of prescription drugs could save Medicare billions though the only government report on the subject, completed in 2007 by the Congressional Budget Office, found the effects would be insignificant.

Trump has seemed to walk back some of his previous campaign rhetoric on this subject and recently told a group of pharmaceutical executives that he would “…oppose anything that makes it harder for smaller, younger companies to take the risk of bringing a product to a vibrantly competitive market.  That includes price fixing by the biggest dog in the market – Medicare – which is what’s happening.”  White House spokesman Sean Spicer has since clarified that Trump does support Medicare negotiating prescription drug prices.

NPR story by Allison Kodjak


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The Opioid Epidemic and Medicare Beneficiaries

CMS recently outlined it’s strategy for combating the opioid epidemic that is impacting a large numbers of Medicare and Medicaid beneficiaries and their families.  CMS identified the following areas as priorities to reduce opioid overuse and misuse in Medicare and Medicaid:

  • Implement more effective person-centered and population-based strategies to reduce the risk of opioid use disorders, overdoses, inappropriate prescribing, and drug diversion
  • Expand naloxone use, distribution, and access
  • Expand screening, diagnosis, and treatment of opioid use disorders, with an emphasis on increasing access to medication-assisted treatment
  • Increase the use of evidence-based practices for acute and chronic pain management

The success of CMS’ strategy relies on successful coordination and cooperation between Medicare and Medicaid beneficiaries, their families and caregivers, health care providers, health insurance plans, and states.  Acumen’s work on the Overutilization Monitoring System (OMS) is described as one example of the work CMS already does with health insurance plans to improve how opioids are prescribed by providers and used by beneficiaries.

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2016 Medicare Part D Low-Income Subsidy and Plan Performance

Wrapping up our coverage of the recently released Medicare Part D in 2016 and Trends over Time report from the Health Policy Institute at Georgetown University and the Kaiser Family Foundation are findings related to the Low-Income Subsidy (LIS) program and plan performance ratings.

The report found that nearly 3 in 10 Part D beneficiaries receive financial subsidies through the Low-Income Subsidy program.  This number has grown steadily over the past decade, reaching 12 million in 2016.  About two thirds of LIS enrollees  (roughly 8 million) are enrolled in stand-alone PDPs; others are in standard MA-PD plans, Special Needs Plans (SNPs), Medicare-Medicaid plans participating in financial alignment demonstrations, cost plans, or PACE plans.  PDP LIS enrollment has been relatively constant since the program began, but MA-PD plan enrollment has expanded greatly since 2006.


In 2016, MA-PD plans are far more likely than PDP plans to have 4 or more stars out of a possible 5 stars for the rating factors based on their Part D performance.  The average PDP plan star rating average has fluctuated in recent years while the MA-PD plan average has been increasing steadily.  Both plan types are rated on the same Part D performance factors.


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Medicare Part D spending on the EpiPen has increased by 1151% since 2007

A recent report by Kaiser Family Foundation (KFF) examined trends in Medicare spending on EpiPens from 2007 to 2014. KFF found that since Mylan acquired EpiPen from Merck in 2007, prices for a two-pack of EpiPens have increased by almost 550%, from $94 in January 2007 to $609 in May 2016.

The KFF analysis demonstrated that the EpiPen price increases have translated into higher spending fro Medicare Part D plans, enrollees, and program overall, leading to higher cost sharing and higher premiums for consumers. The average out-of-pocket spending by enrollees for each prescription doubled among non-LIS enrollees, from $30 to $56.

The analysis found that Part D spending increased from $7 million in 2007 to $87.9 million in 2014, an 1151% increase. At the same time, the number of enrollees using EpiPens also increased, but at a much, much slower rate, only increasing by 164%, from 80,000 to 211,000 enrollees. KFF 1.PNGOn a per prescription basis, the average total spending increased by 383%, rising from an average of $71 in 2007 to $344 in 2014, a nearly five-fold increase. Compared to the annual growth rate of Medicare overall (per capita), the annual growth rate for total Part D EpiPen spending (per prescription) was significantly higher. For example, in 2014, the annual growth rates were 34% and 8.6% for EpiPen spending and overall Medicare spending, respectively. KFF 3.PNG



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2016 Medicare Part D Premiums

Last week’s Medicare Part D in 2016 and Trends over Time report from the Health Policy Institute at Georgetown University and the Kaiser Family Foundation provides a snapshot of Part D in 2016 and trends over the past decade.  A previous post covered Part D enrollment trends from over the past decade.  Part D premiums for most beneficiaries enrolled in PDP plans increased in 2016.  This increase marked the end of 6 years of little change.  As the chart below indicates, MA-PD plans in 2016 continued the recent trend of modest growth.  Close to 50% of beneficiaries in 2016 enrolled in MA-PD plans paid no monthly premium for Part D coverage.8915-exhibit-2-1.png

As might be expected, geography plays a considerable role in Part D premiums.  PDPs offering comparable benefits can vary by as much 6 times the cost, depending on the region.  Even within the same geographic area, there can be large differences in stand-alone PDP premiums.


In the coming days, we will take a closer look at 2016 Medicare Part D benefits, the LIS program, and plan performance ratings.

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2016 Medicare Part D Enrollment Trends

A report published today by the Health Policy Institute at Georgetown University and the Kaiser Family Foundation exploring the current state of Medicare Part D and trends over the last decade presents a number of interesting findings.  The percent of beneficiaries enrolled in a Part D plan has increased from 52% in 2006 to 71% in 2016.  The chart below presents a high level view of current Part D  enrollment.8915-exhibit-s-1.png

A closer examination of 2016 Part D enrollment data reveals that the three largest Part D sponsors, UnitedHealth, Humana, and CVS Health, account for 52% of enrollees.  The ten largest sponsors have enrolled 80% of Part D beneficiaries.  The average Medicare beneficiary ha 26 PDP plans available in 2016, the lowest amount in the past ten years.  On average, there were 16 MA-PD plans available to beneficiaries, a number that has remained relatively stable since 2011.


A closer look at 2016 Part D premiums, benefits, the LIS program, and plan performance ratings will be covered in the coming days.


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Hillary Clinton Unveils Plan to Address ‘Excessive’ Increases in Drug Prices

On Friday, Hillary Clinton announced a plan to address excessive and unnecessary price hikes for prescriptions drugs that have been on the market for a while. Clinton has previously proposed greater regulation of the pharmaceutical industry, including proposals to allow Medicare to negotiate drug prices, cap out-of-pocket costs, restrict direct-to-consumer drug advertising, and speed up the FDA approval of generic drugs.

Clinton’s unveiling of her plan comes on the heels of the national uproar over Mylan’s large price hikes for the Epipen. Clinton proposes a multi-prong plan that involves more direct federal intervention in healthcare pricing increases, diverging from prior U.S. policy and more closely aligning U.S. policy with that in countries such as Canada, France, and Australia.

Clinton’s plan foremost involves the creation of a team of federal health, safety, and antitrust agency officials, with the aim of protecting consumers through  greater monitoring of drug price increases. Along with increased monitoring, Clinton advocates for tougher enforcement mechanisms and penalties on companies exhibiting “outlier” price increases.

The second major aspect of Clinton’s plan is allowing the importation of lower-priced drugs from foreign counties. In addition, the plan advocates for increased patient access to treatments through the government purchase and provision of alternative therapies.

Clinton faces major opposition from a current Republican-majority Congress and push back from Big Pharma, who claim the plan will stifle competition and disrupt an already well-performing market.

If elected President, Clinton would be able to circumvent Congress and enact certain aspects of the plan through executive action. This includes authorizing the importation of cheaper generics from foreign countries, a policy measure that is also supported by Donald Trump.

Modern Health Article

New York Times Article