Dive Brief:
- One idea in President Donald Trump's latest plan to lower drug costs, the American Patients First Blueprint, could raise out-of-pocket costs for cancer patients, an analysis from the consulting firm Avalere finds.
- The policy in question would shift some drugs from Medicare Part B to Part D. The blueprint calls for examining "which Medicare Part B drugs could be negotiated for a lower price by Part D plans."
- In 2016, according to Avalere, the average out-of-pocket costs for cancer patients were about 33% higher for Part D-covered new cancer therapies, or about $3,200, than for those covered in Part B, who paid $2,400.
Dive Insight:
One part of the Trump administration's proposal aims to shift drugs from Part B, which largely covers pricey drugs administered in doctors' offices with a price formula set by law, to Part D, where there is more flexibility.
Part D is required to pay the same price for a drug regardless of indication and has limited negotiating power, the Blueprint points out. It requires a certain level of out-of-pocket costs be paid by patients. On the other hand, Part B requires patients pay 20% in out-of-pocket costs, but most patients have supplemental insurance that closes the gap.
"CMS caps coinsurance for Part D plan specialty tiers at 33%, but cost sharing for non-preferred drug tiers can be close to 50%," the Avalere analysis points out.
The issue gets more complicated than just patients paying more out-of-pocket under one plan than the other. The analysis points out that those patients with no supplemental insurance under Part B paid an average of $9,700 out-of-pocket for new cancer therapies, while those patients under Part D that were not low-income paid an average of $4,400.
"Our analysis suggests that if new cancer therapies, or any high-cost drug therapies, are switched from Part B to Part D, many Medicare patients would pay more out-of-pocket because they purchase supplemental health coverage for Part B medical services and are not eligible for [low-income services] in Part D. However, Medicare patients that do not have supplemental health coverage would pay less out-of-pocket from such a switch, especially if they were eligible for [low-income services]," said the analysis.
The bottom line, says Avalere, is that the impact of the plan will not be the same across all patients and could have detrimental effects on some patient costs depending on a range of external factors, like other types of insurance, income level, and what other drugs or services the patient might also have.