Need to Lower Drug Costs, Not the Size of the Donut Hole, for Medicare Beneficiaries With Cancer

Despite mandates under the Affordable Care Act (ACA) to reduce the coverage gap and cost-sharing for Medicare beneficiaries, out-of-pocket costs for those who need oral cancer medications are expected to remain high over the years, according to a new study published in the Journal of Clinical Oncology.

Researchers at the Eshelman School of Pharmacy, at the University of North Carolina, analyzed data recorded in the Medicare July 2014 Prescription Drug Plan Formulary, Pharmacy Network, and Pricing Information Files. They assessed whether ACA-mandated changes in Medicare Part D—expected to come to fruition in 2020—would reduce cost-sharing woes that were recorded in 2010. In 2010, patients were responsible for all costs when drug spending for a person reached $2960—the patient was then responsible to cover all costs out of pocket till the spending touched $4700.

For their current study, the authors included more than a 1000 stand-alone prescription drug formularies and over 2000 from Medicare Advantage plans. The primary data used for the study was for orally-administered anticancer agents. The researchers looked at variations under various benefit designs and compared and contrasted drug costs, cost-sharing designs, and out-of-pocket (OOP) costs, for beneficiaries without low-income subsidies who take a single drug before and after the donut hole closes.

According to lead author Stacie B. Dusetzina, PhD, their research showed that closing the donut hole would prove beneficial for those who obtain prescription drugs through Medicare Part D, unless they need expensive medications like oral anti-cancer therapies.

The authors did not observe a huge variation in the average spending across benefit plans; with a range of $5123 to $16,093, the average monthly price for included products was $10,060. Using data on the cost of dabrafenib and sunitinib, the authors estimated that the median OOP costs for Medicare Part D beneficiaries in 2010 ranged from $6456 for dabrafenib to $12160 for sunitinib (assuming patients covered the complete coverage gap out of pocket before the ACA). With the expected plug in the donut hole in 2020, Medicare enrollees on these drugs would still end up paying an average of $5663 (range of $4000 to $10,000) across all products, the authors write.

These are unaffordable costs for Medicare beneficiaries whose household budget, per a 2012 study, was estimated at $33,993. “The extraordinary financial burden of orally administered cancer medications for Medicare Part D enrollees and the need for policies that improve access to high-value therapies. Examples of such policies are a substantial lowering of drug prices or a shift in formulary designs from coinsurance to copayments,” the authors write.