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Insights Article

CMS Plan Formulary and Cost-Sharing Information Reveals Continued Shift to Five-Tier Formularies

| Oct 22, 2013

In early October, CMS released the Medicare Part D plan formulary and cost-sharing information for the 2014 benefit year.

Avalere analyzed the data using its proprietary DataFrame┬« database, which includes all stand-alone prescription drug plans (PDPs) and Medicare Advantage prescription Drug Plans (MA-PD).  This analysis identifies noteworthy trends specific to 2014 Medicare Part D plan formulary designs that may impact beneficiary access to prescription drugs in 2014 and beyond.

Below are select highlights from the analysis:


  • Number of PDPs Offering Five-Tier Formularies Will Increase: Approximately 84 percent of plans will

    have five or more tiers in 2014, up from 67 percent in 2013.


  • Majority of PDPs Will Continue to Use Specialty Tiers: 93 percent of Part D plans will utilize at least one specialty tier in 2014, compared to 90 percent in 2013.

  • Five-tier PDPs With One and Three Coinsurance Tiers Will Be More Prevalent: In 2014, roughly 75 percent of five-tier PDPs will utilize one coinsurance tier, while 20 percent of five-tier PDPs will utilize three coinsurance tiers.  This trend may gradually increase average cost-sharing across the market as a whole.

  • Utilization Management Will Increase: Use of prior authorization, step therapy, and quantity limits will increase slightly from 2013 to 2014.

  • Low-Cost PDPs Continue to Differentiate Cost-Sharing for Preferred Versus Non-Preferred Pharmacies: By requiring higher cost-sharing at non-preferred pharmacies, low-cost PDPs such as AARP Saver. 

Open enrollment in the MA and Part D markets is already underway (started on October 15) and runs through December 7.  The 2014 plan year begins on January 1, 2014.

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