September 2012 Edition Vol.11, Issue 9

The Promise of Oral Anticancer Agents: Addressing Compliance and Affordability

The Promise of Oral Anticancer Agents: Addressing Compliance and Affordability (continued)

Impact of Cost Sharing on Medicare Part D and Commercially Insured Patients

Medicare patients with Part D prescription drug plans (PDPs) have struggled with cost sharing since the program went into effect in January 2006. The 2006 Part D benefit was designed so that after reaching a $250 deductible, seniors would have to pay 25% for drug costs between $250 and an initial coverage limit (ICL) of $2,250. Upon reaching this ICL, seniors would not have any coverage until incurring OOP costs for covered drugs in a year equal to $3,600. This period of no coverage is often referred to as the donut hole. 

Upon reaching $3,600, beneficiaries would achieve catastrophic coverage whereby they are subject to a 5% coinsurance for each of their prescriptions (or $2 for a generic drug; $5 for any other drug, whichever is greater). These levels have risen over the years, but the tri-level design remained in place until passage of the ACA which also includes provisions to close the donut hole, resulting in a two-level program (Figure 1).

Figure 1. Filling the Donut Hole: Drug makers contribute through discounts to patients in Medicare Part D coverage gap.

In 2010, seniors with a Medicare prescription drug plan who entered the donut hole received a one-time, tax-free $250 rebate from Medicare to help pay for their prescription drugs. As of January 1, 2011, beneficiaries in the donut hole received a 50% discount on covered brand-name drugs paid by manufacturers and 7% discount on generic drugs paid by the government. This year the discount for generic drugs in the donut hole increased to 14%. 

Between now and 2020, the donut hole will be eliminated. The government will pay half of the remaining 50% cost share, meaning that patients will be subject to a 25% cost share in the combined ICL and coverage gap period. Many oral cancer drugs cost enough to move patients through this initial coverage period with the first fill, assuming a patient can afford the coinsurance for a high-cost prescription. However, even the 5% cost-share level once in catastrophic coverage may be too high for many seniors who are often on fixed incomes. Finally, it is important to note that catastrophic coverage only lasts through the end of the calendar year and that cost sharing on the Part D benefit is uncapped.[6]

As with Medicare Part D, commercially insured patients face high uncapped prescription drug benefits. The Kaiser/HRET study of employer benefits found that between 51% and 82% of plans do not count prescription drug cost sharing toward their maximum OOP.[7] Not surprisingly, treatment abandonment rates for oral anticancer drugs are high across both Medicare beneficiaries and commercial plan members. 

In a study involving 1,737 Medicare beneficiaries and 8,771 commercially insured patients, approximately 25% of patients who were prescribed an oral cancer drug with an OOP expense exceeding $500 (n=1,727) abandoned therapy on the initial claim versus 6.4% of patients with an OOP cost of $100 or less (n=7,638). Insurance status contributed to likelihood to abandon treatment. Sixteen percent of Medicare beneficiaries’ claims were abandoned versus 9% of commercial claims (P<0.05).[8] This difference is perhaps explained by the observation that patients with Medicare PDP or Medicare Advantage plans had higher cost sharing than patients with commercial insurance.

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[6] Centers for Medicare and Medicaid Services

[7] The Kaiser Family Foundation and Health Research & Educational Trust Employer Health Benefits 2011 Annual Survey.

[8] Streeter S, Schwartzberg L, Husian N, et al. Patient and Plan Characteristics Affecting Abandonment of Oral Oncolytic Prescriptions. Oncol Pract. 2011;7(3 Suppl):46s–51s.

 

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