Alliance for Aging Research Sends Letter to Congress Regarding Its Drug Pricing Efforts
On
A significant number of older adults face extraordinarily out-of-pocket costs for their prescription medication, and sometimes forego their prescribed medicines because of cost concerns. We encourage you to read some of the Alliance's work to quantify the scope of this problem here.
The letter outlines proposals that we believe will help older adults better afford their medications, proposals we believe will negatively impact older adults, and provisions that should be included in a final prescription drug bill moving forward.
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To: Speaker of the House
H-222, The
Older adults can face substantial out-of-pocket healthcare costs in a given year for insurance premiums, deductibles, and cost-sharing; physician and clinic visits; hospital stays; and other healthcare procedures, medical devices, and services not covered, such as vision, dental, and hearing-related services. The totality of these out-of-pocket costs can be insurmountable for older adults who often have multiple chronic and life-threatening diseases especially for the one in two Medicare beneficiaries who are living on an annual per capita income of less than
We encourage policymakers to take a collective leap forward in reducing beneficiary costs at the pharmacy counter by combining ideas from the current
Adding an Annual Out-of-Pocket Limit to Part D
The Medicare Part D program provides vital access to prescription medications for the more than 47 million beneficiaries enrolled in the program in 2019./2 A
However, despite Part D's long record of success, there are still millions of beneficiaries who every day are having difficulty affording their prescription medications. One in five older adults age 60 and older report they are struggling to pay for prescription drugs--and, of those who have at least one chronic condition, nearly one in four (24 percent) report they have stopped taking a prescription medication because of the cost./5 Not filling, delaying, or curtailing the use of prescription medications can have life-threatening consequences. The inability to pay for out-of-pocket costs can often make the difference between health and sickness and, in some cases, lead to lost independence and even death. While the creation of the Part D program has helped make prescription drugs more accessible and affordable for most beneficiaries who, prior to the advent of the benefit had limited or very expensive access to prescription drugs, years later, it is the only type of health insurance in America that does not have a limit on out-of-pocket expenses such as deductibles and copays, keeping access out of reach for many of those most in need of treatment.
We are pleased that committee leaders in both chambers of
There is substantial support for this. Our
The current absence of an out-of-pocket limit exposes Medicare beneficiaries to potentially devastating costs that can jeopardize their finances and health. An annual cap on Part D out-of-pocket expenses will help ensure that beneficiaries can access the drugs they were prescribed, and that allow them to live healthier, more productive lives. The Alliance supports both the
Smoothing Out OOP Expenses/Fixing the "Seasonality" of Triggering Catastrophic Coverage
Even if an out-of-pocket cap becomes part of the Part D benefit design, beneficiaries taking high-cost medications can bear a significant financial burden at the beginning of a plan year. This is because the cost of some medications can "burn through" the enrollee's deductible, as well as the initial coverage phase very quickly. These individuals might benefit from additional policies that reduce their monthly expenditures.
Analysis by Avalere found that approximately 3.6 million beneficiaries (8 percent of all Medicare Part D enrollees) hit the catastrophic phase of their benefit in 2017, with 800,000 of those not eligible for the low-income subsidy (LIS), and these beneficiaries were then responsible for their full cost-sharing, which averaged approximately
Patients with higher out-of-pocket expenses are also more likely to abandon a newly prescribed medication at the pharmacy. For example, a study on tyrosine kinase inhibitors used in chronic myeloid leukemia found that non-LIS patients facing
As part of changes made to H.R. 3, Rep.
The Alliance supports the "smoothing" mechanisms being considered in both the
Broadening LIS Eligibility
The Medicare Part D Extra Help program also referred to as the low-income subsidy program or LIS, is administered by the
Because the LIS eligibility criteria for assets and income are low, less than 150 percent of the federal poverty line, only a small portion of economically vulnerable Medicare beneficiaries qualify for the program. Millions of financially vulnerable Medicare beneficiaries do not qualify for the program. In fact, the LIS standards are so stringent that the share of Part D enrollees receiving low-income subsidies has declined over time, from 42 percent of Part D enrollees in 2006 to 28 percent in 2019. Often beneficiaries lose their eligibility because they do not return the required paperwork to the
The Alliance applauds the inclusion of proposed improvements to the Part D LIS program in the House bill. Provisions to increase the eligibility thresholds for the LIS program; eliminate cost-sharing for generic therapies for LIS beneficiaries; intelligently assign beneficiaries to a plan in their geographic area based on their individual prescription drug needs, and eliminate the asset test for LIS will greatly strengthen the program and help many older adults who are in financially vulnerable situations but do not currently qualify for the LIS program.
Moderating Drug Prices
America's older adults are all too familiar with having the price of their prescription medication dramatically increase from year-to-year. According to an analysis by the
To address this issue, both the
To assure price stability, a similar policy is currently in place in the Medicaid program, whereby manufacturers participating in the Medicaid program must pay rebates to state Medicaid departments as an offset for drug spending. A component of the rebate is an inflationary rebate that requires manufacturers to issue an additional rebate when average manufacturer prices for a drug increase faster than inflation, as measured by the Consumer Price Index for All Urban Consumers (CPI-U). The total rebate amount is capped at 100 percent of the average manufacturer price. Analysis by
Facilitating Full Colorectal Cancer Screening Coverage
The Alliance appreciates that House bill includes language to fix a "coverage glitch" concerning colorectal cancer screening. Currently, Medicare covers colonoscopies for beneficiaries without cost-sharing. However, if during screening precancerous polyps are discovered and removed, a beneficiary will have a 20 percent cost-sharing obligation. The removal of these polyps prevents cancer and a person will not know that they have polyps until they are screened through a colonoscopy.
The Medicare program should not have disincentives for beneficiaries to be screened for colorectal cancer. If this form of cancer is caught in a late-stage, the five-year survival rate is 14 percent. If caught early, the survival rate increases to 90 percent./15
Additionally, these screenings have a high potential to reduce Medicare spending. It is estimated that in
International Pricing Index (IPI), Use of the Quality-Adjusted-Life-Year (QALY), and Reliance on ICER
The Alliance considers the provisions in Title I of the House bill, known as the International Pricing Index (IPI), particularly worrisome. First proposed by
While price competition with other countries seems reasonable on its face, in practice it would have a disproportionately negative effect on companies that have newer or more innovative products on the market, often for what are the most challenging diseases. The IPI would also effectively endorse the use here in the
If the group is sicker, older, and/or disabled, the value is less. When applied to health care decision-making, the results can mean that some patients, people with disabilities, veterans, and seniors are deemed "too expensive" to receive care.
QALYs originated in the 1960s when the British government was searching for ways to ration health care for its National Health Service. This is an important premise to recognize--if we embrace the IPI, we are embracing health care rationing. Rationing in European countries has not only resulted in access issues but also translates into higher mortality in chronic diseases such as cancer and cardiovascular disease.
The Alliance is a member organization of the Partnership to Improve
We are very concerned that, in adopting this construct, the
The ACA specifically prohibits the development or use of a "dollars-per-quality adjusted life year (or similar measure that discounts the value of a life because of an individual's disability) as a threshold to establish what type of health care is cost-effective or recommended."/18 Additionally, "The Secretary shall not utilize such an adjusted life year (or such a similar measure) as a threshold to determine coverage, reimbursement, or incentive programs under title XVIII" (Medicare)."/19
Even prior to the ACA, Section 504 of the Rehabilitation Act ensured that individuals with disabilities would not "be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination," under any program offered by any
The Alliance appreciates that the latest version of the House bill includes language to protect patients from discriminatory use of comparative effectiveness research. However, the bill does not include language expressly prohibiting the use of "a dollars-per-quality adjusted life year", or QALY, and continues to import the discriminatory QALY cost-effectiveness assessments and similar average metrics from other countries.
The
- ICER does not consider the potential impact of a new drug on prices for existing drugs. Historically, the prices of existing drugs may go up or down after competitor drugs are launched depending on the competitive response and negotiations with payers.
- ICER understates the true budget impact of the medical savings of new therapies. ICER analysis anticipates medical savings and nets them against drug costs, and while some payers may benefit from medical savings, other payers, such as Part D plans, do not.
- ICER does not utilize real-world data consistently when estimating incremental cost determinations. The base year needs to use real-world data, some of which is confidential and/or unique to particular payers and plans.
- ICER does not consider the current market share of existing therapies when analyzing the incremental cost of a new therapy.
- ICER does not consider patient cost-sharing or Part D reinsurance and coverage gap discounts in its calculations. Cost-sharing can be used to influence patient treatment decisions, to competitively position plans, and to offset costs.
- ICER reports could have the unintended consequence of setting a price floor for some therapies by compelling manufacturers to set prices below a budget threshold. Drug manufacturers could set the price of a new drug at a level just below the budget threshold instead of a lower price and use ICER reports as justification.
We oppose the aforementioned Title 1 provisions in the House bill and encourage both the
SECTION III: WHAT WE WOULD LIKE TO SEE INCLUDED
Expanding Patient Protections within the Benefit Redesign
We appreciate that both the
In addition to instituting a hard cap on annual out-of-pocket spending, both the
Expanding Medicare Coverage to Include Dental, Vision, and Hearing Services
The Alliance has long been supportive of efforts to expand Medicare coverage to include dental, vision, and hearing services, and has championed such bills as the Seniors Have Eyes, Ears, and Teeth Act. However, despite the importance of these services for preserving the independence, social connections, and health of older adults, they are not covered by Medicare.
While some Medicare Advantage plans and Medicaid programs recognize the importance of these services and provide coverage, there are still far too many older adults who need these services and are unable to access them. A 2018 study by the
Sharing Rebates at Point of Sale with Part D Enrollees
In
The Alliance supports a requirement that Part D plans share a portion of rebates at the point of sale. This policy would most help patients prescribed expensive medications over an extended period, and thereby improve adherence. The current rebate model negotiated between insurance plans, PBMs, and drug manufacturers does not lower the cost of the drug at the retail pharmacy counter for Part D beneficiaries. Reforming the current rebate rule to allow a point of sale savings to beneficiaries would result in relief for millions of patients at the pharmacy counter.
We are encouraged by a recent proposal in the
The Alliance applauds
Thank you for your consideration, and we will be eagerly watching and are available to be a resource to you and your staff as you may need.
Sincerely,
Footnotes:
1/ Jacobson, Gretchen. Income and Assets of Medicare Beneficiaries, 2016-2035.
2/ 2019 Annual Report of the Boards of Trustees of the
3/ "New Survey Shows Older Adults Are Willing to Pay More in Monthly Medicare Premiums to Ensure a Cap on Out-Of-Pocket Prescription Drug Costs."
4/ Medicare Today. 2018 Senior satisfaction survey. http://medicaretoday.org/wpcontent/uploads/2016/07/8.13.18-Senior-Satisfaction-Survey-Fact-Sheet-NL-002.pdf. Published
5/ Ibid.
6/ "New Survey Shows Older Adults Are Willing to Pay More in Monthly Medicare Premiums to Ensure a Cap on Out-Of-Pocket Prescription Drug Costs."
7/ Employer group waiver plans (EGWPs) are Part D plans offered by employers to their retirees that often have more generous benefits with lower cost sharing requirements than standard Part D plans. Avalere's analysis therefore focuses on the nearly 800,000 non-LIS, non-EGWP beneficiaries who reached catastrophic in 2017.
8/ Out-of-Pocket Costs Among Medicare Part D Enrollees Reaching the Catastrophic Threshold. Avalere, 2019, Out-of-Pocket Costs Among Medicare Part D Enrollees Reaching the Catastrophic Threshold, https://avalere.com/insights/issue-brief-oop-costs-among-medicare-part-d-enrollees-reaching-the-catastrophic-threshold
9/ Doshi, J.a. "Medicare Part D Cost Sharing And Specialty Drug Initiation In Newly Diagnosed Chronic Myeloid Leukemia Patients." Value in Health, vol. 19, no. 3,
10/ Li, Pengxiang. "
11/ 10 Things to Know About Medicare Part D Coverage and Costs in 2019, https://www.kff.org/medicare/issue-brief/10-things-to-know-about-medicare-part-d-coverage-and-costs-in-2019/.
12/ Cubanski, Juliette, and
13/ Sections 121 and 128 (the Part D "Redesign" and "Inflation-Rebate" Provisions) of the Prescription Drugs Pricing Reduction Act.
14/ Park, Edwin. How to Strengthen the Medicaid Drug Rebate Program to Address Rising Medicaid Prescription Drug Costs.
15/
16/
17/ 42 USC Sec 1320e, 2017.
18/ Ibid.
19/ Ibid.
20/ 29 USC Sec 794, 2017.
21/ 42 USC Sec 12131, 2017.
23/ Willink, Amber. How Medicare Could Provide Dental, Vision, and Hearing Care for Beneficiaries.
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