Preparing for Medicare Part D Benefit Redesign

The client needed to understand how changes to the Part D program could affect out-of-pocket costs and expected drug utilization for its patients, manufacturer discount liabilities for its Part D product portfolio, and costs for plans as well as associated decisions by plans related to formularies and benefit designs.

We developed a precise and flexible Excel-based tool to estimate the impacts of various policy changes for the client and its customers across a range of Part D redesign scenarios. The tool included a range of possible benefit redesign scenarios and allowed for user-defined inputs to reflect assumptions such as rebate levels and pricing decisions.

The policy scenarios were informed by current and past Part D redesign proposals introduced by Congress. These policies differed in some respects but shared a similar structure, which included eliminating the coverage gap, capping beneficiaries’ out-of-pocket costs, creating a new manufacturer discount program across all phases of coverage, and raising plan liability for costs incurred in the catastrophic portion of the benefit.

We used the most recently available Medicare Part D Prescription Drug Event data as well as forecast data provided by the client to model these policy scenarios. Together, we selected four outcomes to assess across the company’s Medicare portfolio and the Part D program overall.

With information gleaned from the modeling exercise, we recommended a clear path forward for the client’s policy and market access strategies. We tailored these recommendations to the individual products across the client’s portfolio and to the Part D program overall.

Following our research and guidance, the client understands in detail the financial implications of the Part D redesign and possesses a clear roadmap for navigating in a complex and uncertain policy environment. The client shared our recommendations with senior leadership, who used them to inform global projections, guide government affairs strategy, prepare for contracting adjustments, and create pricing strategies.