Up, up and away. Earlier this week, the Centers for Medicare & Medicaid Services (CMS) announced initial premium information for the 2025 Medicare prescription drug benefit. The base beneficiary premium went up 6% or $2.08 to $36.78. Which sounds okay until you realize that 6% is a capped amount due to the Inflation Reduction Act. Otherwise, it would have been $55.98. And all of this just represents a portion of the average plan bids and not really a reflection of what any individual beneficiary might experience.
I’ll write a blog post on this next week explaining premiums and how they work. Big picture what you should know is that it will cost plans a lot more to operate in 2025 due to the change in the out-of-pocket cap ($2,000) plus the overall redesign. This was anticipated but it will be interesting to see where it all lands and what it will do to beneficiary selection.
Related Note. Premiums were going to increase and the challenge that the standalone Part D plans have is that they don’t have the same amount of money to work with in terms of premiums, subsidies, rebates, etc. to work with like Medicare Advantage plans with prescription drug plans do. A lot of those buy down the Part D premiums for beneficiaries. I would think, long term, this sort of kills the standalone Part D plan market. And then CMS announced a demonstration program that will lower the base beneficiary premium by $15, limit total Part D increases and change the risk sharing with standalone plans so the government bears more risk. I don’t know what to think except thing must have been pretty dire to come up with a last-minute demonstration.
Waiting. Soon we’ll hear the prices for the first 10 Medicare negotiated drugs. These prices go into effect in Medicare Part D in January 2026. I predict there will be a lot of big numbers thrown up for savings, but the reality is that these are a set of drugs in very competitive therapeutic areas that are already highly negotiated with plans. Except now we’ll see lower prices, lower rebates instead of higher prices, higher rebates. Which seems/is/could be good but has weird side effects.
Another One Bites the Dust. Novo Nordisk’s lawsuit against the Medicare negotiation in the Inflation Reduction Act was tossed out. If we are being honest, I read Willam Sarraille’s explanation twice and still was a little confused but I took away was the logic of the argument is worth considering (and unique from other lawsuits) and the court chose not to so let’s expect an appeal.
More Waiting. Last week, the Maryland Prescription Drug Affordability Board (PDAB) expressed concern at the slow pace of progress. Then they asked for data on four drugs – Farxiga, Ozempic, Jardiance and Trulicity. I’m assuming that 3 of the 4 of these are already highly negotiated.