How Can Medicare Part D Keep Up With a More Complex, Costly Landscape?

Sixteen years in, how is Medicare Part D performing and what does its future look like?

A keynote discussion at the Academy of Managed Care Pharmacy 2021 meeting looked at the past and future of the program, created by the 2003 Medicare Modernization Act, including some of the challenges it faces in a landscape of higher-cost therapies that did not exist when the benefit rolled out.

According to the Kaiser Family Foundation, 46 million of the more than 60 million people covered by Medicare were enrolled in Part D plans in 2020, which may be used in either traditional Medicare or in Medicare Advantage.

Moderator Dan Mendelson of Avalere Health asked the panelists, who all had a hand in the creation of Medicare Part D or who had a role in its implementation later, if beneficiaries today understand the program.

There is a small percentage of beneficiaries who understand how the program works, said Babette Edgar, PharmD, MBA, a senior area vice president at BluePeak Advisors, including how utilization management comes into play and every drug allowed on their formulary.

But that is not common.

“I think that for the majority of beneficiaries, I think the answer to that is no,” she said.

Cost sharing is problematic for patients on specialty drugs, and patient assistance programs run by manufacturers may not be having their intended effect and can’t be applied to those on Part D, said Kim Caldwell, RPh, of Texas Star Healthcare Consulting.

“It’s time for legislation to update the program,” said Mark McClellan, MD, PhD, director of the Duke-Margolis Center for Health Policy, noting that while there have been some bipartisan proposals around that, the topic is hard to separate from other issues such as drug prices and drug utilization.

Commercial payers have management programs to handle patients who require very expensive therapies, but Medicare does not, he said.

The panelists agreed that more innovative ways of financing therapy on the government side are needed; Mendelson noted that there is going to be a revolution in cell and genetic therapies, offering a 1-time curative treatment, as well.

For now, starting next year, CMS will allow plans to offer a second, “preferred” specialty tier with a lower cost-sharing amount; spending on specialty therapeutics accounts for more than 20% of total Part D spending, even though they are used by few beneficiaries.

But pricing at whatever the market will bear is a problem, Caldwell said. So is a lack of transparency around what it costs to develop a drug, concurred Edgar.

Another problem, Mendelson said, is that the United States does not have a mechanism for requiring value assessments of new therapies, as other nations do. A value assessment could and should be done in different ways for different populations, he said.

In addition, Medicare is losing out on savings from biosimilars, he added.

“Why are we not seeing billions of dollars of savings?” Mendelson asked.

“Until the FDA will say that biosimilars are therapeutically substitutable for the [reference] products, they are nothing but another branded product,” said Caldwell.

Until physicians are educated about biosimilars, uptake won’t happen, Edgar said.

“Over the past 3 years I've done several programs where we've talked about biosimilars and why they don't prescribe biosimilars, and there's a lot of misconception and lack of education around what is a biosimilar, can you extrapolate it, can you not extrapolate it, can you substitute it, can you not?” she said. “And a lot of these physicians talked about they'd rather stay away from it, they don't understand it. So I think there's a lot of education that still needs to be done from a physician standpoint as well as issues around the interchangeability.”