Medicare Advantage Rx Drug

Studies: IRA Will Spur Medicare Biosimilar Adoption — and Shift Costs to Part D Plans

Medicare Part D plans are likely to revise their biosimilar formulary management policies as a result of recent regulatory changes, not least the Inflation Reduction Act (IRA). Part D payers will also be on the hook for a greater share of the cost of biosimilars going forward.

A study in Health Affairs released in May makes the case that the longstanding gap in the coverage of biosimilar products between employer-sponsored insurance plans and Medicare Part D plans is likely to shrink in 2025, when several key components of the IRA take effect.

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Part D Plans Get Ready for Potentially ‘Messy’ Rollout of M3P Program

This article originally appeared as part of the May 16 issue of Radar on Medicare Advantage.

For the first time ever, Medicare Part D beneficiaries in 2025 will have the opportunity to spread their prescription drug expenses over the course of the plan year. While Part D sponsors must offer the option to enrollees effective Jan. 1, 2025, plans face multiple considerations and tasks prior to then. One of their most immediate concerns, industry experts say, is factoring in potential administrative costs and/or financial losses associated with the new Medicare Prescription Payment Plan (M3P, as many are calling it) into bids due next month.

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M3P Stakeholders Warn of Potential Beneficiary Confusion, Star Ratings Impact

As Medicare Part D sponsors consider critical steps to setting up the new Medicare Prescription Payment Plan (M3P), CMS is weighing feedback from stakeholders on various aspects of the program, from beneficiary communications to pharmacy interactions. And some warned that potential beneficiary confusion may lead to increased complaints that impact plans’ Star Ratings.

The M3P, which takes effect on Jan. 1, 2025, requires both stand-alone Prescription Drug Plan and Medicare Advantage Prescription Drug carriers to give beneficiaries the option to spread their pharmacy costs over the plan year via a capped monthly payment. CMS in February issued its second draft guidance on the M3P and asked for comments no later than March 16. CMS plans to release the final guidance this summer. The agency sought comment on model materials issued through an Information Collection Request (ICR), including a standardized notice that plans would be required to use for targeted outreach to enrollees who are likely to benefit from the M3P. The initial 60-day comment period on the model materials ended April 29; CMS said it expects to issue a second, 30-day comment period in Spring 2024.

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Part D Plans Get Ready for Potentially ‘Messy’ Rollout of M3P Program

For the first time ever, Medicare Part D beneficiaries in 2025 will have the opportunity to spread their prescription drug expenses over the course of the plan year. While Part D sponsors must offer the option to enrollees effective Jan. 1, 2025, plans face multiple considerations and tasks prior to then. One of their most immediate concerns, industry experts say, is factoring in potential administrative costs and/or financial losses associated with the new Medicare Prescription Payment Plan (M3P, as many are calling it) into bids due next month.

Created under the Inflation Reduction Act, the M3P requires stand-alone Prescription Drug Plans and Medicare Advantage Prescription Drug plans to give enrollees the option to pay out-of-pocket prescription drug costs in the form of capped monthly payments versus paying the full amount at the pharmacy. Program participants will pay $0 at the pharmacy but receive a monthly bill from their Part D carrier, which must reimburse the pharmacies in full.

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Part D Formularies Get More Restrictive, but MA-PDs Beat PDPs on Access

Medicare Part D formularies are becoming more restrictive over time, asserts new research published in the March issue of Health Affairs. Studying Medicare administrative data that included Part D claims and plan formulary characteristics, researchers from the University of Southern California and Blaylock Health Economics found that utilization management tactics such as prior authorization, step therapy and formulary exclusions became far more commonplace between 2011 and 2020. In 2011, an average of 31.9% of drugs were restricted in some form, vs. 44.4% in 2020.

Restrictions varied based on drug costs and the availability of generic alternatives to brand-name drugs. Nearly 70% of brand-name compounds with no generic alternatives were restricted in 2020, compared to 30% of drugs with generic availability. Additionally, the lower the cost of the drug, the less likely it was to be restricted. In 2020, only 16.7% of drugs with generic availability that cost less than $100 per prescription faced restrictions, vs. 83.7% of brand-name only drugs that cost more than $1,000.

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Part D GLP-1 Spend Soars as CMS Makes Key Coverage Decision

Medicare is spending billions on GLP-1s, the groundbreaking diabetes drugs that are now seeing skyrocketing demand for their ability to help patients lose weight. While Medicare Part D plans are prohibited from covering weight loss therapies, a new FDA decision for Novo Nordisk’s Wegovy (semaglutide) could reshape the coverage landscape for some GLP-1s — and drive Part D spending even higher.

A March 22 analysis from KFF found that Part D spending on Novo’s Ozempic (semaglutide) alone reached $4.6 billion in 2022, a 77% increase from the prior year and a 207% increase from 2020. (Novo brands its injectable semaglutide as Ozempic for the treatment of Type 2 diabetes and as Wegovy for weight loss.) KFF found that Part D spending on GLP-1s has grown exponentially every year since 2018. Eli Lilly’s Trulicity (dulaglutide), an older GLP-1 that hit the market in 2014, saw the second-highest gross Part D spending among all therapies in 2022 at $6.2 billion. Ozempic, meanwhile, sat at No. 6. KFF speculated that both Ozempic and Novo’s oral semaglutide Rybelsus could be selected for Medicare drug price negotiation as early as 2025.

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Wegovy Coverage Question Puts Part D Plans in Tricky Position

In newly released guidance, CMS told Medicare Part D plans that they’re allowed to cover weight-loss drugs if they’ve been approved for another medical use — a description fitting Novo Nordisk’s Wegovy (semaglutide) after it recently received an FDA nod for preventing major heart problems.

So far, CVS Health Corp., Elevance Health, Inc. and Kaiser Permanente have said their Part D plans will cover Wegovy for its newest approved use: reducing the risk of heart attacks and strokes in people who have cardiovascular disease and who meet body-weight criteria, the Wall Street Journal reported on March 28.

For other insurers that sell Part D plans, the decision about whether to cover Wegovy represents an additional challenge to grapple with, as they’re also facing significant regulatory changes.

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Wegovy Coverage Question Puts Part D Plans in Tricky Position

In newly released guidance, CMS told Medicare Part D plans that they’re allowed to cover weight-loss drugs if they’ve been approved for another medical use — a description fitting Novo Nordisk’s Wegovy (semaglutide) after it recently received an FDA nod for preventing major heart problems.

So far, CVS Health Corp., Elevance Health, Inc. and Kaiser Permanente have said their Part D plans will cover Wegovy for its newest approved use: reducing the risk of heart attacks and strokes in people who have cardiovascular disease and who meet body-weight criteria, the Wall Street Journal reported on March 28.

For other insurers that sell Part D plans, the decision about whether to cover Wegovy represents an additional challenge to grapple with, as they’re also facing significant regulatory changes.

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Part D Formularies Get More Restrictive, but MA-PDs Beat PDPs on Access

Medicare Part D formularies are becoming more restrictive over time, asserts new research published in the March issue of Health Affairs. Studying Medicare administrative data that included Part D claims and plan formulary characteristics, researchers from the University of Southern California and Blaylock Health Economics found that utilization management tactics such as prior authorization, step therapy and formulary exclusions became far more commonplace between 2011 and 2020. In 2011, an average of 31.9% of drugs were restricted in some form, vs. 44.4% in 2020.

Restrictions varied based on drug costs and the availability of generic alternatives to brand-name drugs. Nearly 70% of brand-name compounds with no generic alternatives were restricted in 2020, compared to 30% of drugs with generic availability. Additionally, the lower the cost of the drug, the less likely it was to be restricted. In 2020, only 16.7% of drugs with generic availability that cost less than $100 per prescription faced restrictions, vs. 83.7% of brand-name only drugs that cost more than $1,000.

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CenterWell Pharmacy Exec: New App Targets Digitally Savvy Seniors

Like its competitors, Humana Inc.’s evolution from a pure-play health insurer to a highly diversified health care firm came with a rebranding. To that end, Humana Pharmacy — the company’s mail-order and retail pharmacy brand — in 2022 became CenterWell Pharmacy, nestled under the company’s CenterWell health services subsidiary. Now, that division not only has a new name, but also a new app.

The app — which is available to CenterWell Pharmacy members covered by Humana’s Medicare Advantage and Part D plans — represents a “total redesign,” with increased personalization capabilities and a streamlined approach to prescription management, the firm said in a Feb. 20 press release.

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