Simply closing the Medicare Part D doughnut hole will not be enough to increase cancer patients’ access to oral chemotherapy drugs, according to a new analysis from the UNC Eshelman School of Pharmacy. The drugs are just too expensive at an average of more than $10,000 a month.
“Closing the doughnut hole will save patients up to $2,550 for a typical course of therapy, but that doesn’t make much of a dent when they will still be paying on average more than $5,600 out of pocket annually for these oral chemotherapy drugs,” Stacie Dusetzina, Ph.D., said. “That’s more than the average Medicare beneficiary’s household spends on food each year, and many of these patients are taking multiple medications so their out-of-pocket spending would be even higher.”
Dusetzina is an assistant professor in the School’s Division of Pharmaceutical Outcomes and Policy and in the Gillings School of Global Public Health and a member of the UNC Lineberger Comprehensive Cancer Center. She and her collaborator, Nancy Keating, M.D., M.P.H., a professor of health-care policy at Harvard Medical School and a physician at Brigham and Women’s Hospital in Boston, analyzed 3,344 Medicare drug formularies that spell out how insurers cover prescription drugs. Their findings were published in the Journal of Clinical Oncology.
“One of the ideas behind Medicare Part D plans is that patients can shop around for a plan that better meets their needs,” said Dusetzina, the lead author of the study. “Unfortunately we found that plans are very similar when it comes to coverage of expensive specialty drugs so there’s not much patients can do to lower their out-of-pocket costs by shopping around. Options for supplemental coverage are limited or nonexistent.”
Medicare Part D is the primary source of prescription drug coverage for older adults in the U.S. In 2015, 39 million people were enrolled, and only 30 percent received low-income subsidies.
Before the Affordable Care Act, Medicare Part D enrollees without supplemental insurance paid a $310 deductible and then 25 percent of the total cost of their prescription medications up to $2,960. They then fell into the “doughnut hole” where they were responsible for paying 100 percent of their prescription-drug costs until their total out of pocket spending on medication reached $4,700. At that point, catastrophic coverage kicked in, and patients paid 5 percent of their prescription costs through the rest of the year. Under the ACA by 2020, patients will only be responsible for 25 percent of their prescription-drug costs currently associated with the doughnut hole.
The average price for a 30-day supply of oral chemotherapy medication was slightly more than $10,000 in 2014, according to Medicare data. Even when a patient has reached the catastrophic phase of the Part D benefit where they only pay 5 percent of their medication costs, they would still be paying approximately $500 a month for oral chemotherapy through the end of the benefit year. This is true even after the doughnut hole closes in 2020.
“High drug costs may result in people not taking their medicines as they should,” Dusetzina said. “That makes therapies less effective, which wastes time and money and has health and financial consequences for the patient.”
The out-of-pocket cost for a cancer patient undergoing a year of oral chemotherapy covered under Medicare Part D ranged from $6,500 to $12,000 in 2010. When the doughnut hole shrinks in 2020, the researchers project that the average out-of-pocket cost will range from $3,900 to $9600 in 2020, assuming drug prices do not change.
This project was supported by a research scholar grant, RSGI-14-030-01-CPHPS, from the American Cancer Society.
Medicare Part D
Medicare is composed of three parts: A, B and D, which correspond to hospital, outpatient and prescription-drug coverage. Historically most cancer therapies have been administered by a physician, which is covered by Medicare Parts A and B. The development of oral chemotherapy drugs is shifting coverage from a patient’s medical benefits to their pharmacy benefits.
The Medicare Part D doughnut hole is the portion of annual prescription costs for which Part D patients had historically paid 100 percent out of pocket (until 2011). By closing the doughnut hole, the writers of the Affordable Care Act hoped to increase patients’ access to life-saving medicines, Dusetzina said. By 2020, patients will only be responsible for 25 percent of their prescription-drug costs currently associated with the doughnut hole.
Medicare Part D open enrollment ends on December 7.