Part D tiers cost patients more

January 1, 2009

Cancer patient advocates are concerned that management strategies are reducing access to treatment options.

WASHINGTON, D.C. - Medicare prescription drug plans (PDPs) are covering most popular drugs on their formularies, including costly biotech therapies and anti-cancer treatments. Beneficiaries have to pay more out-of-pocket, however, for high-cost drugs.

PDPs are shifting more costs to enrollees by revising formularies to four tiers, topped by a specialty tier for biotech therapies that often cost more than $600 a month. Those PDPs with multiple tiers tend to list more products.

Drugs in specialty tiers carry high coinsurance rates, up to 33% in 2009 from a median 25% three years ago, according to analysis presented to the Medicare Payment Advisory Committee (MedPAC) last month. Cost-sharing for generic and brand drugs also is on the rise, with many PDPs charging $75 copays for non-preferred brands. PDPs and Medicare Advantage drug plans seek to control costs further by increasing the use of prior authorization, step therapy and quantity limits to manage utilization.

The rising coinsurance rates for oral cancer drugs translate into high beneficiary costs, according to a report by Avalere Health and the American Cancer Society Cancer Action Network.

For example, 84% of PDP enrollees are in plans that put leukemia treatment Gleevec on tier four or higher, compared to 39% in 2006. The costs vary by drug plan and by state and may be higher if a patient has other health complications. The report finds that Medicare beneficiaries pay up to $2,800 out of pocket for Part D drugs to treat breast cancer. Generic competition has greatly reduced the cost of tamoxifen, but generic alternatives are rare in cancer treatment.

Cancer patient advocates are concerned that high costs and increased use of prior authorization can reduce treatment options and limit access to life-saving therapies, particularly when Medicare beneficiaries using these costly medicines fall into the coverage gap. Out-of-pocket costs then can reach to $500 a month for breast cancer treatment.

The American Cancer Society and others point to the need to overhaul the system to provide adequate and affordable coverage.