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Shifting drugs from Part B to Part D could be costly to patients

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Transition must be carefully evaluated

Policy analysts need to be careful and do their due diligence to ensure all consequences of the policy options are fully understood, especially as pharmaceuticals account for greater costs in the Medicare program. Future policy analyses must, like Mr. Hwang and his associates did, account for changes to Medicare costs as well as beneficiary costs to understand the overall effects of policy changes.

Francis Crosson, MD, chairman of the Medicare Payment Advisory Commission, and Jon Christianson, PhD, vice chairman of MedPAC, made these comments in an accompanying editorial (JAMA Int Med. doi: 10.1001/jamainternmed.2018.6146 ).



A shift in Medicare drug coverage from Part B to Part D might save the government some money but could end up costing some patients in the long run.

Analysis of the 75 brand-name drugs with the highest Part B expenditures ($21.6 billion annually at 2018 prices) indicated that the government could save between $17.6 billion and $20.1 billion after rebates by switching coverage to Part D, Thomas J. Hwang of Harvard Medical School, Boston, and his associates said.

A pillbox spilling capsules wrapped in paper money ©Dynamic Graphics/

The potential for greater overall savings, however, “was constrained by the fact that 33 (44%) of the studied brand-name drugs were in protected classes, which HHS has reported precludes meaningful price negotiation by Part D plans,” they wrote.

The proposal also could have a “material impact” on patient out-of-pocket costs, although the impact would vary based on the drug as well as patients’ insurance coverage in addition to Medicare (JAMA Int Med. 2019. doi: 10.1001/jamainternmed.2018.6417).

For example, moving drug coverage to Part D would lower out-of-pocket costs for the majority of the 75 drugs for patients with Medigap supplemental insurance, but out-of-pocket costs could go up for almost 40% of products. Patients who would benefit most from the shift would be those who qualify for the low-income subsidy, which can eliminate coinsurance requirements.

“By contrast, for patients with Medigap insurance, out-of-pocket costs in Part D were estimated to exceed the annual premium costs for supplemental insurance [approximately 47-56 of the 75 drugs],” Mr. Hwang and his colleagues added. “Out-of-pocket costs would be increased under the proposed policy for beneficiaries with Medigap but without Part D coverage.”

The analysis was limited by the inability to predict the proposed transition’s impact on insurance premiums or drug utilization. Patients who were dually eligible for Medicare and Medicaid were excluded.

SOURCE: Hwang TJ et al. JAMA Int Med. 2019. doi: 10.1001/jamainternmed.2018.6417.

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