Medicare Drug Plan Helps Patients Fight Cancer

Despite fears to the contrary, it's widening access to drugs, study finds

TUESDAY, Sept. 12, 2006 (HealthDay News) -- The fear that the new Medicare drug plan would limit access to medicines hasn't come true, as least as far as cancer treatment is concerned, a new report finds.

In fact, the researchers discovered that Part D expanded access to cancer therapies and required only low co-payments.

Each year, 700,000 Medicare beneficiaries are diagnosed with some type of cancer. In 2004, Medicare spent $7.3 billion on cancer treatments, including chemotherapy drugs. Before the Part D drug plan was launched this year, Medicare did not reimburse for some outpatient therapies, including many oral and self-injectable drugs, the researchers noted.

For the study, published in the September/October issue of Health Affairs, researchers looked at the almost 3,000 drug plans involved in Part D and found that the most commonly prescribed cancer drugs were available, and that when a brand-name drug was not covered, its generic equivalent was.

"On average, 75 percent of the cancer drugs were covered by drug plans, and generic drugs were covered more frequently than brand name drugs," said lead researcher Jennifer Bowman, a director at Avalere Health, LLC, the consulting firm that conducted the study. "Ninety-eight to 99 percent of generic drugs were covered, while only 70 to 71 percent of brand name drugs were covered."

The reason that the plans are so inclusive is that Medicare mandated that all plans had to cover all drugs in certain classes, including cancer drugs, Bowman said. "We think that this policy was important," she added.

In addition, co-payments were low, Bowman said. Co-payments for the 20 cancer drugs most frequently found on plans' formularies ranged from $5 to $40. Moreover, fewer than 5 percent of the plans had quantity limits on the drug supply a patient could get at one time. No plans required patients to fail on one drug before they could be given another.

However, about 10 percent of cancer drugs, particularly brand-name drugs, require prior authorization from a physician before the pharmacist can fill the prescription. This could limit patients' access to these treatments, Bowman cautioned.

The study does not deal with access to cancer drugs when patients fall into the so-called "doughnut hole" -- the gap in Part D coverage that occurs after patients' drug consumption passes $2,250 in one year. After that threshold, patients have to pay full cost for their drugs, plus their drug plan premium, until total annual drug costs reach $5,100. This "gap" can cost Medicare beneficiaries $3,600 in out-of-pocket drug expenses.

"We don't know whether during this period patients stop taking a drug, or switch to another drug or stop therapy all together," Bowman said.

One expert thinks the study shows that Medicare Part D is working.

"This holds great news for Medicare beneficiaries and good news about the Medicare Part D prescription drug benefit," said Mary R. Grealy, chair of Medicare Today, and president of the Healthcare Leadership Council, an industry lobbing group. "It demonstrates how important a benefit this is for all Medicare beneficiaries who did not have coverage for their prescriptions, but particularly for those with cancer."

Before Plan D kicked in, Medicare only covered physician-administered medications, which required an office visit and, of course, did not cover other self-administered medications, Grealy noted.

"The study underscores the importance of the program design. Plan formularies must include all drugs in certain therapeutic classes such as anti-neoplastics [cancer]," she said.

Grealy believes that Part D is an example of a successful partnership between government and private insurance. "The study underscores the value of having private health plans participate and compete in the Medicare program to provide the best value to Medicare beneficiaries through good coverage and efficient cost," Grealy said. "It is a win-win for the Medicare program and Medicare beneficiaries."

However, another expert believes the study doesn't reflect the problems patients encounter navigating through the complexities of Part D.

"For example, prior authorization is a great bar to people without either great sophistication or an experienced advocate," said Robert M. Hayes, president of the Medicare Rights Center. "It's virtually impossible for most people on Medicare to overcome the utilization barriers the plans put in the way."

In a related study published in the same journal, researchers at the nonprofit RAND Corporation found that ratcheting up patient co-pay fees for expensive, specialty drugs won't save employers and health insurance plans money.

This strategy has worked in the past with less essential prescription medications, the researchers said. However, the new study of over 1 million patients found that they simply find ways to pay more for drugs that are crucial to treating serious illnesses such as cancer, rheumatoid arthritis, multiple sclerosis and kidney disease.

"What happens with these expensive specialty drugs is that people will use them regardless of cost, because there just aren't any other options," co-researcher Dana Goldman, chair and director of health economics at RAND, said in a prepared statement. "Given the high cost of these specialty drugs, insurers would be better off finding [other] ways to manage use," he said.

More information

There's more about drug plans at Medicare.

SOURCES: Jennifer Bowman, director, Avalere Health, LLC, Washington, D.C.; Robert M. Hayes, president, Medicare Rights Center, New York City; Mary R. Grealy, chair, Medicare Today, and president, Healthcare Leadership Council, Washington, D.C.; September/October 2006, Health Affairs; Sept. 12, 2006, news release, RAND Corp.
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