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New Avalere Health Analysis Finds People with Cancer Have Wide Access to Drugs Under Medicare Part D

Contact: Lindsey Spindle, 202.207.1337, lspindle@avalerehealth.net

09.12.06

Washington, DC – A new study by Avalere Health finds that Medicare prescription drug plans offer beneficiaries with cancer wide access to therapies.   Published in the current biotechnology-focused issue of Health Affairs, the Avalere study also finds that most cancer drugs have relatively low copayments, but that some are subject to drug utilization management techniques that could limit beneficiaries’ access to treatments. 

Using Avalere’s novel database tool, DataFrame™, the authors evaluated nearly 3,000 Medicare prescription drug plans’ formularies to see the breadth of cancer drug coverage under the new Medicare prescription drug benefit.  Among their findings:  

• On the whole, plans cover 75% of Part D cancer drugs.  About 99% of generic drugs were covered, compared to about 70% for brand-name drugs.  
• The 20 most commonly prescribed cancer drugs were covered almost universally. 
• Prior authorization (approval from a physician before the pharmacist can fill the prescription) is applied at a rate of about 10% overall, with a significantly higher rate of prior authorization for brands than generics.
• Copays of $5 - $40 are more common than coinsurance.  When coinsurance is applied, the most common amount is 25%.  While many cancer drugs are favorably positioned on plan formularies, the amount paid by beneficiaries for a given therapy varies considerably from plan to plan.
• Less than 5 percent of the plans had quantity limits regulating the amount of the drug supply a patient can get at one time, and no plans required step therapy, where patients have to fail on one drug before they can be given another.

“CMS’ ‘all or substantially all’ policy to protect certain classes of Part D drugs will serve as a cornerstone of access to cancer therapy, and a model for private sector formulary activity,”  said Jennifer Bowman, a director at Avalere Health and lead author of the study.  “But cost sharing in Medicare varies from plan to plan, and policies such as prior authorization must be carefully monitored to ensure that patients are not deterred from appropriate treatment.”

Bowman and her colleagues write that more than 700,000 Medicare beneficiaries are newly diagnosed with some form of cancer every year.  In 2004, Medicare spent $7.3 billion on cancer treatments, including chemotherapy drugs.  Prior to the advent of Part D, Medicare did not reimburse for some outpatient therapies, including many oral and self-injectible drugs.

“Medicare beneficiaries also need to know that there are key differences between prescription drug plans,” said Bowman.  “As we approach open enrollment season, people with cancer will need to pay attention to the details beyond monthly premiums and copayments – such as prior authorization – to understand which plans may be the best for them.” 

Avalere Health, a Washington-based healthcare advisory company, self-funded the study as part of its ongoing commitment to education on issues of pressing policy concern.  DataFrame is Avalere’s proprietary database that analyzes nearly 3,000 Medicare prescription drug plans’ formularies, cost-sharing requirements, and benefit structures.  Avalere uses DataFrame to support Medicare education, research, and strategy development.  Contact vbarton@avalerehealth.net for more information on DataFrame’s capabilities.  

“Access to Cancer Drugs Under Medicare Part D:  Formulary Placement and Beneficiary Cost Sharing in 2006,” appears in the September/October issue of Health Affairs, and was authored by Jennifer Bowman, Amy Rousseau, Catherine Harrison, and David Silk, all of Avalere Health. 

Avalere Health is an advisory services company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington DC, the firm delivers research, analysis, insight, and strategy for leaders in healthcare business and policy. Avalere's experts span 125 staff drawn from the federal government (e.g., CMS, OMB, CBO, and the Congress), Fortune 500 healthcare companies, top consultancies, and nonprofits. The firm offers deep substance in areas ranging from healthcare coverage and financing to the changing role of evidence in healthcare decision-making. Its focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications, and interactive programs, Avalere also translates real-time healthcare developments into actionable information.

Learn more at www.avalerehealth.net.

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