Keeping you updated on the latest Medicare and Part D news

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Increases in Prices of Anticancer Medications Negating Savings for Part D Beneficiaries

New research has found that the steady increase in the price of targeted oral anticancer medications (TOAM) is washing out the potential for savings that patients would experience in their out-of-pocket (OOP) payments following closure of the Medicare Part D coverage gap.  TOAM OOP costs are relatively moderate for privately-insured patients, but impose a much greater financial burden on Part D beneficiaries.  As the coverage gap gradually closes under ACA provisions, the study finds that Part D beneficiaries’ OOP costs for TOAMs has fallen by about 20 percent.  However, the inflation in monthly regimen prices for TOAMs was found to be three times that of the medical care component of the consumer price index.  The authors of the study fear that the continued inflation in TOAM prices could negate any savings that beneficiaries will experience from the coverage gap closure.

Recommendations include allowing Part D plans to have two specialty tiers, as opposed to the current one specialty tier policy, with patient cost sharing capped on the preferred specialty tier.  They also note that the current specialty tier should be reserved for competitor drugs with high prices.





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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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US life expectancy declines for first time in 20 years

Data released by the National Center for Health Statistics (CDC) reports life expectancy in the US has declined for the first time in more than 20 years. Life expectancy dropped from 76.5 years in 2014 to 76.3 in 2015 for men and from 81.3 to 81.2 for women. Overall life expectancy dropped by 0.1 years in 2015, to 78.8 years.

This decline in life expectancy equates to men dying, on average, two months earlier and women dying a little over one month earlier. The last decline in life expectancy occurred in 1993, during the high of the HIV/AIDS epidemic.

The preliminary figures depict rises for eight of the ten leading causes of death, including big rises in death caused by heart disease, Alzheimer’s disease, and accidental deaths among infants.

Experts have pointed to rising obesity levels, an ageing population, and rising “social stressors,” which includes economic struggles and addiction (ex. the current opioid epidemic) as wider factors in stagnating and declining life expectancy.

The US currently ranks 28th out of 43 OECD countries in life expectancy and has the 12th highest infant mortality of the same countries.



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Many Questions About Trump’s Health Care Policy Remain

For seniors in the midst of Medicare open enrollment, which lasts this year from October 15 to December 7, questions remain about how a Trump presidency will affect Medicare.  The president-elect made clear his intention to repeal the Affordable Care Act throughout his campaign and has since established a page on his website dedicated to his plans to reshape the nation’s healthcare system.  He includes steps to “modernize Medicare” and increase state flexibility with regard to Medicaid.  Trump promised throughout his campaign to leave Medicare untouched, though his campaign seems to be leaving the door open to some reforms.

Pharmaceutical stocks have gained in the days since Trump’s surprise victory over Hillary Clinton last Tuesday.  President-elect Trump continues to call for a replacement to the Affordable Care Act though he has yet to offer a specific plan nor clarified how he plans to combat the rising medication and health care costs for most Americans.  Regardless, any changes have the potential to greatly impact the drug marketplace and the drug price issue is unlikely to go away in the coming years.  During the Republican primary presidential campaign, Trump indicated that he was open to having the federal government negotiate directly with pharmaceutical companies to secure lower prices, as other nations such as Canada do.  It is unclear if this remains part of Trump’s plan or was merely an idea proposed on the campaign trail.

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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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Senators want to force drug makers to justify big price hikes

In the first federal legislative response to the Mylan price increase uproar, a bipartisan group of Congress-members introduced a bill aimed at increasing transparency between the public and pharmacy companies.

Senators Tammy Baldwin (D-Wisc.) and John McCain (R-Ariz.) and Representative Jan Schakowsky (D-Ill.) are co-sponsoring the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act in the Senate and House of Representatives, respectively.

The FAIR Drug Pricing Act focuses on creating greater transparency, rather than directly addressing drug prices. The bill would require pharmacy companies to justify any planned price increase greater than 10% to the Department of Health and Human Services at least one month before the intended increase. Companies would have to disclose all non-confidential and non-proprietary information pertaining to the drug of interest, including spending on R&D, manufacturing, marketing and advertising, and profit information.

This bill does not set drug prices, but is intended to increase transparency over why large and unprecedented price hikes will occur. By requiring companies to disclose potential price increases at least one month before they will go into effect, tax payers are given notice of these price hikes and can adjust accordingly.

Due to the bill’s introduction late in the Congressional session, its passage is nearly impossible. However, the point of introducing the bill is to create momentum for future legislation.

As John McCain said, “transparency leads to accountability, and it is past time that mantra applied to the skyrocketing cost of prescription drugs”.

The bill has received support from many organizations, including: American Association of Retired Persons (AARP); the Campaign for Sustainable Rx Pricing (CSRxP); the Medicare Rights Center; Consumer Union; Doctors for America: Drug Price, Value, and Affordability Campaign; Families USA; Center for Medicare Advocacy, Inc.; and Public Citizen.

Bill Overview

USA Today Article


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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.