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Medicare rules increase out-of-pocket costs of multiple sclerosis drugs

Medicare beneficiaries without low-income subsidies can expect to spend $6,894 a year out-of-pocket for treatment of MS.

Jeff Lagasse, Associate Editor

Medicare patients with multiple sclerosis face skyrocketing out-of-pocket costs for therapies due to complicated insurance rules that force them to pick up an increasing share of the cost, according to new research.

Despite recent efforts to constrain escalating costs, researchers with OHSU and the OHSU/Oregon State University College of Pharmacy in Portland, Oregon found trends in insurance coverage that restrict access and saddle patients with increasing patient costs.

The conclusion: Medicare beneficiaries without low-income subsidies can expect to spend $6,894 a year out of pocket for treatment of MS.

IMPACT

The authors call the market "dysfunctional," lacking the typical incentives of most other consumer products. There are few incentives for companies to not raise prices because higher prices benefit those in the drug distribution channel, including drug companies.

High prices negatively affect patients, even with insurance, because patient out-of-pocket costs are often directly tied to undiscounted drug list prices. Rising prices for MS therapies also seemed to correlate to increased use of restrictive policies by Medicare pharmacy plans.

In one example, researchers documented how patients who are prescribed the only generic drug in one class -- glatiramer acetate -- will pay more out of pocket than patients using any of the other brand-name drugs in the same class.

The Bipartisan Budget Act of 2018 modified Medicare rules to reduce out-of-pocket costs for individuals through increased discounts provided by brand-name drug manufacturers. But this change left individuals who use generic drugs with higher out-of-pocket costs for certain generic products.

The authors said a proposal by the Trump administration would reduce this incentive disparity between brand-name and generic drugs. Depending on drug utilization patterns, the authors expect the administration's suggested changes would reduce total out-of-pocket spending for beneficiaries.

WHAT ELSE YOU SHOULD KNOW

Researchers also examined changes in requirements for prior authorization, a common insurance company strategy intended to manage or limit access to certain drugs.

They pointed out that rates of pre-authorization have increased from 61 percent in 2007 to as high as 90 percent in 2016. Yet narrowing options doesn't necessarily work for MS patients, the authors write, citing American Academy of Neurology guidelines that stress patients and providers should have access to all therapies because the effect varies from patient to patient.

And despite an increase in the number of therapies available to treat MS, the out-of-pocket cost to patients has continued to escalate.

IMPACT

Sixty-two percent of U.S. adults identify healthcare costs as a significant source of stress. One in five adults cannot afford health insurance copays, deductibles, and out-of-pocket expenses, including prescription drugs, October research showed.

One of the major findings was that consumers are experiencing rising healthcare costs but aren't prepared for them. One in three adults indicate they have seen an increase in health insurance premiums (35 percent) and out-of-pocket expenses (31 percent).

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com

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