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Moving Part B Drugs to Part D in the Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs

In May 2018, the Trump Administration released its Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs. In July 2018, the U.S. Department of Health and Human Services (HHS) began accepting comments on the blueprint. Included in those comments were suggestions to move Medicare Part B drugs to Part D.

The Medicare Part B program is of critical importance to beneficiaries with primary immunodeficiency diseases (PI), and the Immune Deficiency Foundation (IDF) strongly opposes moving Part B infusion drugs, including immunoglobulin (Ig) replacement therapy, to Part D. Moving these drugs to Part D would result in higher out-of-pocket costs to the PI community. In Part B fee-for-service, beneficiaries generally pay 20% of all costs for their drugs and medical services. Because of the high cost of lifesaving Ig treatments, beneficiaries often rely on Medigap supplemental insurance to cover the 20% coinsurance. Medigap plans, however, cannot be used to supplement Part D plans, so patients are likely to experience a significant increase in their out-of-pocket costs. Even with the closure of the Part D “donut hole” or coverage gap in 2019, beneficiaries who meet this threshold are responsible for paying 25% of their drug costs if or until they reach catastrophic coverage. For beneficiaries with PI who need life-long Ig treatment, this would amount to a significant financial loss compared to the current cost sharing model.

Applying Part D purchasing methods and formulary use to Part B drugs for Ig replacement therapy could have unintended negative consequences for the PI community. Because there are no generic Ig products, developing closed formularies will merely limit patient choice without resulting in significant savings. While the efficacy of all Ig products are equivalent as a whole, each individual with PI responds differently to different products. In fact, some people with PI have serious allergic responses to different formulations. It is therefore essential that individuals with PI have access to the full range Ig replacement therapy options as is currently available under Part B.

Ensuring that Ig replacement therapy for PI continues to be reimbursed under Medicare Part B is essential to the PI community and IDF will remain active on this issue and keep the PI community abreast of developments.

Additional Information and Resources

The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs

IDF’s comment letter to HHS

International Pricing Index Model for Medicare Part B Drugs

IDF submitted comments to the Centers for Medicare & Medicaid Services’ proposal to apply the international pricing index (IPI) model to Medicare Part B drugs. IDF argued that Ig replacement therapy and other plasma-based treatments should be exempted from this model. The 2018 report entitled Comparison of U.S. and International Prices for Top Medicare Part B Drugs by Total Expenditures, released by the Assistant Secretary’ for Planning and Evaluation (ASPE), found that Ig products, while expensive, are no more expensive, and in one case less expensive in the U.S. than in other developed countries. As a plasma-based therapy, the extraction, production and safety measures required are very expensive to make. It is critical that the PI community has access to all brands and forms of therapy since treatment is very individualized. The proposed model would limit patient choice of medications. In addition, utilizing reimbursement rates based on foreign prices could negatively affect the supply of plasma protein therapies which in turn will impact access to Ig therapy for the PI community. While IDF supports the administration in examining alternative reimbursement models to address the high cost of medications, there is no evidence that the IPI model will bring down the cost to patients for Ig therapy and could negatively impact patient’s access to the vital medication.

Medicare Part D Donut Hole

The Medicare Part D donut hole, or coverage gap, has undergone critical reforms that help reduce out-of-pocket costs for people with Medicare, especially those who face the highest prescription drug costs, such as individuals with primary immunodeficiency diseases (PI).

In 2019, the Medicare Part D donut hole will close one year early due to the Bipartisan Budget Act of 2018. This will help ease the burden of high drug costs facing many Medicare beneficiaries with PI and provide people in the coverage gap with a higher discount on their prescription drugs. This higher discount will allow beneficiaries to move through the donut hole more quickly, lowering their out-of-pocket costs and ensuring they can better access needed care.
IDF has and will continue to advocate for the Part D donut hole changes that will help lower the out-of-pockets costs of Medicare beneficiaries with PI to be maintained.