Prescription for Medicare

Through the years, Medicare Parts B and D have been providing seniors with access to lifesaving treatments.

But now seniors are increasingly facing higher out-of-pocket costs on the medicines they need. In response, there has been a lot of talk in Washington about changing Medicare to reduce costs and improve access. But while many proposals would cut costs for the government and insurers, they don’t focus on cutting costs for seniors; and even worse, they would limit access to the medicines that could save their lives – now and in the future. Cutting costs for everyone except seniors and limiting access to medicines is the Wrong Prescription for Medicare. On the other hand, making changes that help seniors pay less out of pocket and improve access is the Right Prescription for Medicare.

Changes to Medicare should be the right prescription for seniors.

Government-set prices for lifesaving medicines that could limit access for seniors

The Department of Health and Human Services (HHS) is currently considering a proposal that would set U.S. prices for medicines covered under Medicare Part B based on prices set by 14 foreign governments (otherwise known as an International Pricing Index (IPI) model). The countries that would be referenced set artificially low prices, and every time countries have resorted to using these harmful measures, it has resulted in severe delays and denials of patient access to important treatments.

For example, in several of the countries referenced in the proposal fewer than half of new cancer medicines launched globally since 2011 are available. In contrast, all of these medicines are currently available in the United States. This proposal’s far-reaching changes to Medicare Part B would take the program in the wrong direction, potentially hurting patient access to needed treatments, creating disruption and uncertainty for providers and discouraging continued medical innovation here in the United States.

Forcing patients to fail first

Over the last 10 years, one of the cornerstones of the Medicare Part D program has been to ensure the sickest and most vulnerable patients have access to the clinically critical medicines they rely on. Seniors facing serious and complex health conditions like HIV/AIDS, cancer, epilepsy and mental illness, rely upon access to medicines that are covered under six specific classes of medicines, more commonly known as the six protected classes. In the six protected classes there is no “one size fits all” because the medicines for these patients have complex interactions, side effects, contraindications and other factors that must be considered. READ MORE +

But a recent proposal would let Part D plans restrict access to medicines by: using prior authorization or step therapy for patients already stable on a six protected classes medicine, including patients who are taking HIV/AIDS medicines; excluding a protected class drug if the drug is simply a new formulation regardless of whether the old formulation is still on the market; and excluding a drug from the protected classes if its list price increased more than general inflation. Letting plans restrict access for some of the sickest and most vulnerable Part D beneficiaries would reduce adherence to those medicines, jeopardizing their health, increasing their need for inpatient care and resulting in poorer outcomes for seniors and potentially higher costs for taxpayers.

Interfering with existing Part D negotiations and restricting access

When Part D was enacted, it included a provision – the noninterference clause – which prohibits the Secretary of HHS from interfering in the private, ongoing and successful negotiations between Part D plans, pharmacy benefit managers (PBMs), drug manufacturers and pharmacies in the program. But recently, a number of bills have been introduced that would jeopardize this success by repealing the noninterference clause. READ MORE +

While the phrase “Medicare negotiation” makes for a good soundbite, there is already negotiation in Part D between plans and manufacturers that help keep costs low, and in fact result in an average rebate of 35%. In fact, CBO has repeatedly said that the Secretary of Health and Human Services would not be able to secure lower prices than are already achieved through current negotiation without restricting access to medicines for the beneficiaries who rely on them. Interfering with existing Part D negotiations that would undermine the program and only achieve savings by having the government decide which medicines seniors have access to, rather than their doctor. READ LESS –

Require middlemen to share the savings at the pharmacy counter

While the average negotiated rebate in Part D is 35 percent, many seniors do not see those savings in the cost they pay at the pharmacy counter. Passing through some of those rebates could save seniors billions of dollars over the next 10 years. In fact, a recent study of diabetes medicines in Part D found that giving seniors 80 percent of negotiated discounts on diabetes medicines at the pharmacy counter could save a senior with diabetes $350 per year on their health care costs. The change could also save Medicare nearly $1000 annually for every senior taking diabetes medication. READ MORE +

How? By helping patients afford the medicines they need to stay healthy and stay out of the hospital. Washington is now considering overhauling the drug pricing system to ensure that negotiated rebates are providing savings for seniors on the cost of their medicines. Mandatory sharing of rebates with Part D beneficiaries at the point of sale could result in savings for them that helps promote more consistent use of medicines, improve their health outcomes, ensure patients are not penalized for being sick, decrease government spending on low-income subsidy payments and promote a more competitive marketplace for medicines.

Government interference in doctor-patient decisions

Some in Washington are considering a proposal that would impose government arbitration on Medicare drug reimbursement, disrupting a program that millions of seniors have come to rely on for care. This proposal would give the government the power to determine what a treatment is worth – forcing drug manufacturers to either accept the government’s determined price or face penalty or exclusion from the Medicare program. READ MORE +

Government arbitration could jeopardize patient access to lifesaving treatments, and government arbiters would not be accountable to the public, meaning some of the sickest and most vulnerable Americans may not be able to challenge decisions that impact their treatment. Further, government arbitration would put extraordinary uncertainty on biotechnology investors’ potential returns. As a result, investors would likely shift their focus to treatments for younger populations, instead of investing in the future treatments Medicare beneficiaries need like a cure for Alzheimer’s. Government arbitration is a risky proposal that could threaten access, interfere with patient-doctor decisions and hinder lifesaving innovation.

Tell Washington Changes to Medicare Should Benefit Seniors

There are right and wrong prescriptions for changing Medicare. Seniors need Washington to focus on the right ones.