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Charitable Assistance Covers a Small Share of Part D Non-LIS OOP Costs

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As policymakers discuss ways to curb program expenditures and improve patient affordability in Medicare Part D, the role of charitable assistance in helping beneficiaries with out-of-pocket (OOP) costs has garnered interest. To understand the relationship between charitable assistance and various Part D metrics, Avalere examined Part D prescription drug claims for beneficiaries without the Low Income Subsidy (LIS) for 2014 and 2018.

For many non-LIS beneficiaries, particularly those taking specialty drugs, OOP costs can be high, and most Part D beneficiaries have limited access to help pay for OOP costs. Manufacturer cost-sharing assistance (e.g., Patient Assistance Programs and manufacturer coupons) available for enrollees in other markets are not permitted in Part D due to Office of Inspector General federal anti-kickback guidance. Additionally, unlike commercial drug coverage, Medicare Part D benefits do not have an annual OOP cap.

This leaves charitable assistance as 1 of the few options for non-LIS beneficiaries to get relief from high OOP costs. Charitable organizations can provide patient assistance in Part D without triggering an anti-kickback violation if they meet requirements from the federal government. However, some stakeholders have raised questions about whether lowering OOP costs for non-LIS beneficiaries due to charitable assistance contributes to higher drug spending.

To understand the impact charitable assistance may have on Part D spending, Avalere identified 100 branded drugs that were among the top drugs by total spending in both 2014 and 2018 and had the highest total charitable assistance in both 2014 and 2018. For each drug, Avalere determined the respective number of prescriptions (with and without charitable assistance), gross Part D drug costs, OOP costs per prescription, and charitable assistance amounts per prescription in both years. Avalere then examined utilization and cost trends over the 5-year study period.

Avalere also examined the share of prescriptions filled for the cohort of branded drugs in the analysis that received charitable assistance (Figure 1). In 2014, 2.5% of the prescriptions filled for this cohort were provided with charitable assistance. In 2018, however, a smaller share of prescriptions—1.8%—received charitable assistance.

Figure 1. Share of Part D Claims Subject to Charitable Assistance (2014–2018), 100 Branded Drug Cohort
Figure 1. Share of Part D Claims Subject to Charitable Assistance (2014–2018), 100 Branded Drug Cohort

For the cohort of drugs analyzed, gross Part D drug costs and OOP costs trended up between 2014 and 2018. This analysis confirms prior analyses demonstrating that gross Part D drug costs have risen over time. And OOP costs per claim increased despite decreases in the coverage gap coinsurance amounts between 2014 and 2018. At the same time and for the same set of drugs, patient assistance trended down and became a smaller share of OOP costs per claim and gross Part D drug costs per claim over this 5-year period.

Though this study did not evaluate a causal role between the elements of the analysis or account for manufacturer rebates, it does demonstrate that patient assistance compared to OOP spending and gross Part D drug costs has not increased at the same rate for the drugs included in this analysis. These findings indicate that charitable financial assistance for this cohort of drugs is associated with only a small share of OOP costs and an even smaller share of gross Part D drug costs. For the drugs included in this analysis over the 5-year period, none of the findings suggest that the amount of charitable financial assistance provided has a meaningful influence on gross Part D drug costs.

Funding for this research was provided by the Patient Access Network Foundation. Avalere maintained full editorial control.

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