Medicare Advantage Rx Drug

Biosimilar uptake is higher for Medicare Advantage beneficiaries than their traditional Medicare (TM) counterparts, with MA members up to 2.3 times more likely to be prescribed a biosimilar, according to new research published in JAMA Health Forum. The FDA has approved 45 biosimilars so far, with more approvals expected this year.

Researchers from CMS, the FDA and policy research firm Acumen LLC studied claims and encounter data to calculate market share for 20 biosimilars across seven product categories. Biosimilar uptake was higher for MA members in every category but bevacizumab, the generic name for Genentech’s targeted cancer therapy Avastin. Avastin currently has four biosimilars available, with a fifth approved last month.

The approval of Eli Lilly and Co.’s Zepbound (tirzepatide) in November capped off a banner year for glucagon-like peptide 1 (GLP-1) agonists and their use in weight loss management. And the fuss over these much-hyped obesity drugs — originally approved to treat diabetes — is likely just beginning. While employer groups and commercial payers are agonizing over the potential cost of coverage, industry leaders and legislators are pushing for Medicare to cover GLP-1s as weight loss therapies. Medicaid programs, meanwhile, are also weighing their options.

GLP-1s are now “the No. 1 driver of non-specialty pharmacy trend,” Mercer’s lead pharmacy actuary Jon Lewis told AIS’s Health Plan Weekly in November. Zepbound joins fellow GLP-1s from Novo Nordisk A/S, Wegovy (semaglutide) and Saxenda (liraglutide), in the obesity market basket. (As diabetes therapies, Zepbound is marketed as Mounjaro, while Wegovy is known as Ozempic.) Despite crackdowns on off-label use of the drugs’ diabetes iterations and a seemingly endless wave of shortages, many in the industry are clamoring for increased consumer access to the drugs. The American Medical Association on Nov. 13 passed a resolution asking “health insurers to provide coverage of available FDA-approved weight-loss medications, including GLP-1 medications, to demonstrate a commitment to the health and well-being of our patients.”

As of 2023, about 50.5 million Medicare beneficiaries are enrolled in a plan with Part D prescription drug coverage, with 44% in stand-alone Prescription Drug Plans (PDPs) and 56% in Medicare Advantage Prescription Drug Plans (MA-PDs), according to a KFF analysis.

The three largest Part D insurers by market share — UnitedHealth Group, CVS Health Corp. and Humana Inc. — account for 57% of enrollment in 2023. More than half of UnitedHealth’s and Humana’s Part D enrollees chose MA-PDs, while the majority of CVS Health, Centene Corp. and The Cigna Group Part D enrollees are in PDPs.

Deep within two new proposed health insurance regulations are provisions that would alter how Medicare Advantage and Affordable Care Act exchanges cover prescription drugs — and some of them are garnering praise from patient advocates.

For example, the HIV+Hepatitis Policy Institute welcomed two of the proposals in the 2025 Notice of Benefit and Payment Parameters (NBPP), the annual regulation governing the ACA marketplaces, which CMS released on Nov. 15.

One of those provisions would codify existing policies surrounding how health plans treat prescription drugs that aren’t part of a given state’s essential health benefits (EHB) benchmark plan. Under the ACA, individual market plans must cover items and services in 10 core benefit categories, including prescription drugs, and each state is responsible for defining which drugs make the must-cover list.

CMS on Nov. 6 released a proposed rule that aims to address multiple parts of the Medicare Advantage program that recently have been the target of criticism — including broker compensation, access to behavioral health care, and the use of supplemental benefits and prior authorization. However, a major trade group for health insurance brokers and agents says the part of regulation targeting their industry is both misguided and potentially disastrous.

Should the rule be implemented as proposed, “I think that the MA distribution [system], which is the agents and brokers, will collapse,” says John Greene, senior vice president of government affairs at the National Association of Benefits and Insurance Professionals (NABIP).

Only 2% of Medicare beneficiaries who enrolled in a stand-alone Prescription Drug Plan (PDP) in 2024 will be in contracts with 4 or more stars, compared to 42% in the 2022 plan year and 9% in 2023, according to CMS’s recently released estimates. The average Star Rating for PDPs dropped to 3.11 in 2024 from 3.70 in 2022, with two contracts receiving 1.5 stars.

The distribution change is largely fueled by methodology changes in how many of the Star Ratings are calculated. Known as Tukey outlier deletion, the changes center on removing outlier contract scores when determining the cut points for all non-Consumer Assessment of Healthcare Providers and Systems measures.

Only 2% of Medicare beneficiaries who enrolled in a stand-alone Prescription Drug Plan (PDP) in 2024 will be in contracts with 4 or more stars, compared to 42% in the 2022 plan year and 9% in 2023, according to CMS’s recently released estimates. The average Star Rating for PDPs dropped to 3.11 in 2024 from 3.70 in 2022, with two contracts receiving 1.5 stars.

The distribution change is largely fueled by methodology changes in how many of the Star Ratings are calculated. Known as Tukey outlier deletion, the changes center on removing outlier contract scores when determining the cut points for all non-Consumer Assessment of Healthcare Providers and Systems measures.

During the 2024 Medicare Annual Election Period that starts on Oct. 15, a total of 708 stand-alone Prescription Drug Plans will be available for beneficiaries in 2024 nationwide, a 12% drop from 2023. Only 126 PDPs will be offered without a premium to enrollees receiving the Low-Income Subsidy (LIS) in 2024, compared with 191 PDPs in 2023.

The stand-alone Prescription Drug Plan (PDP) market — which was already in decline — is poised to take even more hits due to regulatory and legislative changes that are taking effect in 2024 and beyond, according to industry observers. Indeed, one expert who analyzed data from CMS’s 2024 Medicare Advantage and Part D “landscape files” predicts that “a lot of people are faced with pretty significant premium increases” next year.

There’s a complicated calculus driving that trend, explains Tom Kornfield, a senior consultant at Avalere Health. But both he and equities analyst George Hill agree that the Inflation Reduction Act of 2022 (IRA) is a major factor.

Leading up to the Oct. 15 start of the Medicare Annual Election Period (AEP), news reports across the U.S. have depicted down-to-the-wire disputes between Medicare Advantage insurers and their network providers over sticking points like reimbursement and prior authorization policies. But another development in payer-provider relations is the evolving trend of regional health systems cosponsoring MA plans, which one industry expert says can take various forms and requires careful consideration.

Morgantown, West Virginia’s Peak Health, for one, will launch a new MA plan that it says was designed in partnership with two West Virginia health systems, WVU Medicine and Marshall Health. According to the new insurer’s website, the company is also owned by two other not-for-profit health care providers, Mountain Health Network and Valley Health. Peak is the only West Virginia-based insurance company to offer MA plans sponsored by West Virginia providers, the company said.