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President/CEO at Healthcare Solutions Direct, LLC, a nationwide insurance agency focused primarily on the retiree health market.
Whether paying full price or using a Medicare prescription plan, many seniors are living with a medical condition that requires maintenance medications. This means their monthly budget is forever impacted.
How drug companies price medications then becomes inherently important. However, when it comes to prescription drug prices, things are not always what they seem. Drug manufacturers incorporate a few practices consumers should be aware of when it comes to medications.
Medications that are not widely distributed are referred to as orphan drugs because they are designated for small groups of patients. Drug companies price these high because there is less demand for them. In 2017, the median price of orphan drugs was $140,000 per patient per year. In comparison, ordinary drugs had a median price of $28,000. Without having generic substitutes, these small patient groups must pay high prices for necessary medications.
Product hopping and evergreening are other tactics drug manufacturers use that manipulate a drug’s patent. Evergreening is the practice of increasing the life of a patent. This happens by procuring more protections that will extend the manufacturer’s control over the drug, and it means other drug companies cannot release a less expensive version of the medication.
Product hopping involves extending a drug patent in a different way: by tweaking and rebranding a product that is about to go generic, according to the Coalition for Affordable Prescription Drugs (CAPD). This practice costs consumers and the U.S. healthcare system billions of dollars each year. It also happens more often than you’d think. About 78% of drugs associated with new patents are not drugs new to the market. A 2020 report from Matrix Global Advisors found that extending the patents on five specific drugs could cost the U.S. healthcare system $4.7 billion per year.
Canceling out these types of practices by enabling more generic drugs to enter the market could dramatically lower that expense. It would also make medication more affordable to consumers. However, as long as these tactics continue, drug companies can reduce the availability of generic medications. The problem is this forces up prices on something people already may have in their medicine cabinets.
Even if we did away with questionable practices relating to patents, there is still pay-for-delay. This practice occurs when a brand-name pharmaceutical manufacturer compensates its generic counterpart to hold off releasing the generic version of a medication. This practice is not illegal, but ending it would give Medicare more freedom.
Although this practice in particular has come under fire from a legal standpoint, there are currently no federal laws that prohibit pay-for-delay, according to a 2019 article by KHN and PolitiFact. The only headway made to date came from a ruling in 2013 in which the Supreme Court enabled the Federal Trade Commission (FTC) to challenge pay-for-delay agreements. This move changed the game, but not in the way you might think. The article notes that the ruling led pharmaceutical companies to stop exchanging cash but continue the practice by compensating each other in different ways.
The repercussions of all these practices continue to fall on the patients. According to the FTC, pay-for-delay costs consumers $3.5 billion per year in higher drug prices. This impact is not going unnoticed, either. A 2019 survey found that 23% of seniors taking prescription drugs said it is difficult to afford their medications. This can have a damaging effect on individuals. Those who cannot afford their medications may not always take them as they should. This can lead to worsening conditions and a lower quality of life.
Medicare does help make prescription medication more affordable for seniors through its Extra Help program. And working with an experienced health insurance provider can help you find the prescription coverage to match your needs with your budget. Those who are Medicare eligible can work with a Medicare insurance agent.
As drug prices continue to be a hot topic in this country, the hope is that more substantial positive change will emerge over time. Until drug manufacturers are held accountable for these harmful practices, seniors should focus on finding the best, most affordable Medicare plan for their situation.
Making a big stride in the cost of ongoing medical care for diabetics, Medicare has worked to establish an insulin price cap. Going into effect in 2021, a $35 copay for insulin may help save Medicare patients up to 66% per year in medication costs.
However, getting these savings is not automatic. It is yet another Medicare benefit to opt into. This means that beneficiaries who require insulin need to pay close attention to their health benefits. You can make necessary changes during the Medicare open enrollment period, which takes place between October 15 and December 7 each year.
Adding to the complications of this cost-saving benefit, this change can impact two areas in the Medicare coverage system. Prescription-focused Part D is usually where you find coverage related to insulin. But Medicare Part B can also include insulin coverage if it is used in conjunction with an insulin pump. Add to that the variety of plans under Medicare Part D, and there is a substantial risk you could miss out on the insulin cap.
To help add some clarity, the Centers for Medicare & Medicaid Services (CMS) announced the creation of the Part D Senior Savings Model, which will increase access to the insulin cap. Three pharmaceutical manufacturers have opted in to the senior savings model: Eli Lilly and Company, Novo Nordisk, Inc. and Novo Nordisk Pharma, Inc., and Sanofi-Aventis U.S. LLC. Seventy-six part D sponsors agreed to take part. It may sound like a small amount of buy-in, but this leaves seniors with more than 1,600 different drug coverage options. It is important to pick one that provides you with the insulin cap and gives you savings for any other medications you regularly need.
People will need to choose a new, enhanced plan of coverage to access the savings associated with the insulin cap. This means that stand-alone prescription drug plans and Medicare Advantage plans with drug coverage may all fit into the Senior Savings Model.
Where you will not find the insulin cap is in more basic Medicare plans. These typically do not include extensive coverage or easy access to prescription savings. While they will have a lower premium, they are not always the most cost-effective choice. This is especially true if you take maintenance medications or have a chronic condition. Your insurance agent can explain this to you as they help you find the right plan for your specific health needs.
With a plan inclusive of the insulin cap, patients can save within every stage of Part D coverage. Even if they have not hit their annual deductible yet, patients will not have to pay more than the $35 cap for insulin. If they hit the coverage gap stage, where they must pay 25% of a medication’s price, they will still only have to pay $35 for insulin.
According to CMS, a third of Medicare beneficiaries have diabetes, which means that more than 3.3 million beneficiaries use insulin. That is why having the right plan to cap their copay on insulin means so much. Price is no longer a barrier to properly managing this chronic disease. Patients no longer need to ration their insulin, sometimes depriving themselves of necessary treatment. It also means insulin users could save an average of $446 in annual out-of-pocket costs for the medication.
Knowing the potential savings available to those with diabetes and opting into an enhanced plan with the insulin cap might be worthwhile. Even if it means paying a slightly higher premium, the long-term savings are hard to overlook.
Deciding which prescription plan is right for you can feel even more complicated with this new information. This is why it can help to talk to someone with a firm grasp on the minutiae of Medicare. A qualified Medicare insurance agent can be a helpful resource even if you are only trying to decide between a few coverage plans. They may be able to help you narrow your choices and ensure you pick coverage that includes the insulin cap.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Making a big stride in the cost of ongoing medical care for diabetics, Medicare has worked to establish an insulin price cap. Going into effect in 2021, a $35 copay for insulin may help save Medicare patients up to 66% per year in medication costs.
However, getting these savings is not automatic. It is yet another Medicare benefit to opt into. This means that beneficiaries who require insulin need to pay close attention to their health benefits. You can make necessary changes during the Medicare open enrollment period, which takes place between October 15 and December 7 each year.
Adding to the complications of this cost-saving benefit, this change can impact two areas in the Medicare coverage system. Prescription-focused Part D is usually where you find coverage related to insulin. But Medicare Part B can also include insulin coverage if it is used in conjunction with an insulin pump. Add to that the variety of plans under Medicare Part D, and there is a substantial risk you could miss out on the insulin cap.
To help add some clarity, the Centers for Medicare & Medicaid Services (CMS) announced the creation of the Part D Senior Savings Model, which will increase access to the insulin cap. Three pharmaceutical manufacturers have opted in to the senior savings model: Eli Lilly and Company, Novo Nordisk, Inc. and Novo Nordisk Pharma, Inc., and Sanofi-Aventis U.S. LLC. Seventy-six part D sponsors agreed to take part. It may sound like a small amount of buy-in, but this leaves seniors with more than 1,600 different drug coverage options. It is important to pick one that provides you with the insulin cap and gives you savings for any other medications you regularly need.
People will need to choose a new, enhanced plan of coverage to access the savings associated with the insulin cap. This means that stand-alone prescription drug plans and Medicare Advantage plans with drug coverage may all fit into the Senior Savings Model.
Where you will not find the insulin cap is in more basic Medicare plans. These typically do not include extensive coverage or easy access to prescription savings. While they will have a lower premium, they are not always the most cost-effective choice. This is especially true if you take maintenance medications or have a chronic condition. Your insurance agent can explain this to you as they help you find the right plan for your specific health needs.
With a plan inclusive of the insulin cap, patients can save within every stage of Part D coverage. Even if they have not hit their annual deductible yet, patients will not have to pay more than the $35 cap for insulin. If they hit the coverage gap stage, where they must pay 25% of a medication’s price, they will still only have to pay $35 for insulin.
According to CMS, a third of Medicare beneficiaries have diabetes, which means that more than 3.3 million beneficiaries use insulin. That is why having the right plan to cap their copay on insulin means so much. Price is no longer a barrier to properly managing this chronic disease. Patients no longer need to ration their insulin, sometimes depriving themselves of necessary treatment. It also means insulin users could save an average of $446 in annual out-of-pocket costs for the medication.
Knowing the potential savings available to those with diabetes and opting into an enhanced plan with the insulin cap might be worthwhile. Even if it means paying a slightly higher premium, the long-term savings are hard to overlook.
Deciding which prescription plan is right for you can feel even more complicated with this new information. This is why it can help to talk to someone with a firm grasp on the minutiae of Medicare. A qualified Medicare insurance agent can be a helpful resource even if you are only trying to decide between a few coverage plans. They may be able to help you narrow your choices and ensure you pick coverage that includes the insulin cap.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Making a big stride in the cost of ongoing medical care for diabetics, Medicare has worked to establish an insulin price cap. Going into effect in 2021, a $35 copay for insulin may help save Medicare patients up to 66% per year in medication costs.
However, getting these savings is not automatic. It is yet another Medicare benefit to opt into. This means that beneficiaries who require insulin need to pay close attention to their health benefits. You can make necessary changes during the Medicare open enrollment period, which takes place between October 15 and December 7 each year.
Adding to the complications of this cost-saving benefit, this change can impact two areas in the Medicare coverage system. Prescription-focused Part D is usually where you find coverage related to insulin. But Medicare Part B can also include insulin coverage if it is used in conjunction with an insulin pump. Add to that the variety of plans under Medicare Part D, and there is a substantial risk you could miss out on the insulin cap.
To help add some clarity, the Centers for Medicare & Medicaid Services (CMS) announced the creation of the Part D Senior Savings Model, which will increase access to the insulin cap. Three pharmaceutical manufacturers have opted in to the senior savings model: Eli Lilly and Company, Novo Nordisk, Inc. and Novo Nordisk Pharma, Inc., and Sanofi-Aventis U.S. LLC. Seventy-six part D sponsors agreed to take part. It may sound like a small amount of buy-in, but this leaves seniors with more than 1,600 different drug coverage options. It is important to pick one that provides you with the insulin cap and gives you savings for any other medications you regularly need.
People will need to choose a new, enhanced plan of coverage to access the savings associated with the insulin cap. This means that stand-alone prescription drug plans and Medicare Advantage plans with drug coverage may all fit into the Senior Savings Model.
Where you will not find the insulin cap is in more basic Medicare plans. These typically do not include extensive coverage or easy access to prescription savings. While they will have a lower premium, they are not always the most cost-effective choice. This is especially true if you take maintenance medications or have a chronic condition. Your insurance agent can explain this to you as they help you find the right plan for your specific health needs.
With a plan inclusive of the insulin cap, patients can save within every stage of Part D coverage. Even if they have not hit their annual deductible yet, patients will not have to pay more than the $35 cap for insulin. If they hit the coverage gap stage, where they must pay 25% of a medication’s price, they will still only have to pay $35 for insulin.
According to CMS, a third of Medicare beneficiaries have diabetes, which means that more than 3.3 million beneficiaries use insulin. That is why having the right plan to cap their copay on insulin means so much. Price is no longer a barrier to properly managing this chronic disease. Patients no longer need to ration their insulin, sometimes depriving themselves of necessary treatment. It also means insulin users could save an average of $446 in annual out-of-pocket costs for the medication.
Knowing the potential savings available to those with diabetes and opting into an enhanced plan with the insulin cap might be worthwhile. Even if it means paying a slightly higher premium, the long-term savings are hard to overlook.
Deciding which prescription plan is right for you can feel even more complicated with this new information. This is why it can help to talk to someone with a firm grasp on the minutiae of Medicare. A qualified Medicare insurance agent can be a helpful resource even if you are only trying to decide between a few coverage plans. They may be able to help you narrow your choices and ensure you pick coverage that includes the insulin cap.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Healthcare Solutions Direct is committed to providing expert support to Medicare Beneficiaries by simplifying the Medicare process from start to finish, ensuring that the right coverage is provided to each client. We are not connected with or endorsed by the U.S. Government or the federal Medicare program.
