The Medicare negotiation patient listening sessions are being held this week; many of the patients are talking about affordability challenges and the need to switch medicines/treatments because of cost. Some of the patients said they are looking forward to the negotiation so they can have lower cost sharing. To me, this demonstrates the need to educate beneficiaries about the Inflation Reduction Act’s Part D redesign features. What we have is an opportunity for education.
So here goes…In 2024, patients no longer face cost-sharing once they hit the catastrophic phase of the benefit so their maximum OOP is around $3,300. Not insignificant, but better than current state. And in 2025 the maximum OOP is $2k with the ability to opt into a program that will allow beneficiaries to spread those costs over the course of the year (another post, another time.)
For 2025, the benefit design shift will have plans and manufacturers facing increased liability for the cost of drugs. Plans will go from a 15% catastrophic liability to 65% and manufacturers will go from a capped liability in the coverage gap to 10% in initial coverage limit and 20% in catastrophic. For a drug that is $12k a month, that means that a manufacturer would go from paying ~$4.7k in liability to ~$28k per patient, per year on top of any other discount/rebates they are offering.
It is worth noting that once a drug is subjected to maximum fair price, it no longer owes this liability. Thus, the shift to negotiation might not be as large a shift for some manufacturers. They will go from this 10% – 20% liability to 25 – 35% maximum fair price (although could be higher depending on CMS “negotiations.”)