The cost of targeted oral anticancer medicines (TOAMs) for patients with Medicare Part D coverage has increased in recent years, with more and more patients reaching the catastrophic coverage phase, according to research published in JCO Oncology Practice.1
Researchers found that the percentage of TOAM users who reached the catastrophic coverage phase increased from 54.6% in 2011 to 60.3% in 2016. The mean out-of-pocket spending for these patients increased from $596 to $2549 over that period.
“These findings highlight the need for reining in drug prices and capping patient out-of-pocket spending,” according to study author Meng Li, PhD, of the University of Texas MD Anderson Cancer Center in Houston, and colleagues.
The Inflation Reduction Act of 2022, which was signed into law on August 16, may help in that regard.2 The law is expected to impact drug prices and eventually reduce out-of-pocket spending on medications for Medicare beneficiaries.
Previous research suggested the high cost of TOAMs makes many of them unaffordable, even for patients with medical insurance.3 From 2000 to 2014, inflation-adjusted average monthly spending by commercial health plans in the launch year for TOAMs increased from $1869 to $11,325.
Since Medicare Part D passes a percentage of the financial obligation for oral antineoplastics to patients, their out-of-pocket monthly spending increased by almost 12% annually during 2007-2012.4 Cost-of-living adjustments, on the other hand, would have produced spending increases of only 3%.
The financial obligation is magnified further since there has been no “cap” on out-of-pocket spending in Medicare Part D.5 For patients with durable responses and good tolerance to TOAMS, the rapid increase in costs poses a burden without an upper limit.
Medicare Part D Spending Phases
With their study, Dr Li and colleagues aimed to determine the percentage of TOAM users who attained the catastrophic coverage phase of Medicare Part D and to quantify their spending on TOAMs during that phase.1
The researchers explained that the standard Part D plan has 4 phases that beneficiaries spend through. The initial phase is the deductible phase, in which the beneficiary pays 100% of the cost of a prescription drug. The second phase is the initial coverage phase, in which the beneficiary pays approximately 25% of the cost.
The third phase is the “donut hole” or coverage gap phase, in which the beneficiary used to pay 100% of the cost before the closure of the coverage gap began in 2011. The cost-sharing was gradually lowered to 25% in 2020.
The fourth phase is the catastrophic coverage phase, in which the beneficiary pays 5% of the total cost of the drug for the remainder of the year. In 2016, beneficiaries reached the catastrophic phase once they had spent $4850 out of pocket, including any manufacturer discounts.