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Enhancing Accessibility to Selected Drugs: Medicare’s New Drug Price Negotiation Program
Sponsored by Your Insurance Gal Agency
Published: October 30, 2023, 4:35am
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Medicare recently made a significant announcement regarding its new drug price negotiation program. This initiative will focus on the negotiation of drug prices for ten medications covered under Medicare Part D. These ten drugs were selected based on criteria such as their high spending within Medicare Part D, the absence of generic or biosimilar equivalents on the market for at least seven years, and other relevant factors. The list includes medications for various medical conditions, such as diabetes (Farxiga, Fiasp/NovoLog, Januvia, Jardiance), blood clots (Eliquis, Xarelto), heart failure (Entresto, Farxiga), psoriasis (Stelara, Enbrel), rheumatoid arthritis (Enbrel), Crohn’s disease (Stelara), and blood cancers (Imbruvica). Between June 2022 and May 2023, approximately 8.3 million Medicare Part D beneficiaries used one or more of these drugs. Negotiated prices for these medications will become effective on January 1, 2026.
While much attention has been given to the intricacies of the negotiation process and the potential impact on future drug development, less focus has been placed on how this new program could enhance access to and utilization of these selected drugs for Medicare Part D beneficiaries:
1. **Universal Coverage Requirement:**
The law mandates that all Medicare Part D plans must cover each of the selected drugs, including all dosages and forms, once the negotiated prices take effect in 2026. This universal coverage requirement aims to improve access to these drugs, especially for those that aren’t currently universally covered.
2. **Formulary Placement Scrutiny:**
The Centers for Medicare & Medicaid Services (CMS) will require Part D plans to justify where they place these selected drugs on their formularies, especially if they are on non-preferred tiers. Non-preferred tiers usually involve higher cost sharing for beneficiaries. This scrutiny ensures that beneficiaries are not burdened with excessively high costs for these essential medications.
3. **Utilization Management Oversight:**
CMS will closely monitor how Part D plans use utilization management tools, such as prior authorization requirements, for these selected drugs. Reducing administrative barriers to accessing these medications can significantly enhance beneficiaries’ ability to obtain the treatment they need.
4. **Potential Cost Savings:**
With lower negotiated prices, particularly for drugs with coinsurance requirements, beneficiaries may experience reduced out-of-pocket costs. This cost relief can encourage more beneficiaries to utilize these medications, potentially leading to better health outcomes.
In summary, Medicare’s new drug price negotiation program has the potential to expand access to vital medications for Medicare Part D beneficiaries. This expansion arises from requirements outlined in the Inflation Reduction Act and CMS guidance, including universal coverage, formulary placement review, utilization management oversight, and possible cost savings. It’s important to note that this program not only aims to control Medicare’s spending on these drugs but also to improve beneficiaries’ access to them and potentially lower their out-of-pocket expenses, ultimately benefiting both patients and drug manufacturers.
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