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Summary

The large-scale disruptions resulting from COVID-19 are significantly reshaping how patients receive care. In particular, patients taking infused and injectable drugs administered by a healthcare professional at a physician office, infusion center, or hospital outpatient department now face greater challenges receiving their medications.

As stakeholders continue to seek solutions that balance safety and access to necessary treatments, patients and their providers may consider shifting prescriptions from provider-administered to self-administered drugs, which are covered under Medicare Part B and Part D, respectively.

To assess the potential scale of a shift from Part B to Part D drugs, Avalere evaluated Medicare utilization of physician-administered drugs for patients with autoimmune conditions such as rheumatoid arthritis and plaque psoriasis. In 2018, patients in Part B fee-for-service (FFS) received an estimated 1.2 million drug administrations of products with an autoimmune indication for which a self-administered drug alternative may have been available. The Medicare Part B spend for such therapies was about $5.2 billion in 2018, 16% of total Part B drug spending. During the same period, self-administered drugs treating the same diseases cost about $7.9 billion in Part D. This level of spending in Medicare FFS alone points to the broad impact that shifting therapies could have on the biopharmaceutical market and subsequent expenditures across CMS, plan sponsors, and patients.

Medicare Part B and Part D Estimated Drug Spending for Products with an Autoimmune Indication, 2018
Medicare Part B and Part D Estimated Drug Spending for Products with an Autoimmune Indication, 2018

Source: Avalere analysis of 2018 Medicare Part B Drug Dashboard. Includes specialty treatments for rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, Crohn’s disease, ulcerative colitis, and ankylosing spondylitis

Early data following the COVID outbreak shows a reduction in physician office visits, driving a decrease in provider-administered drug utilization. While it is common for patients to switch between medications, including between pharmacy- and physician-administered drugs, over the course of the treatment of their autoimmune condition, limited interactions with providers in the early days of the pandemic have decreased this trend in the short term. Nevertheless, if issues accessing care persist and telemedicine becomes more pervasive, changes in therapies may become more common. Mitigating interruptions in care and evaluating transitioning patients to new drugs raises a series of issues for key stakeholders, including patients, providers, health plans, pharmaceutical manufacturers, and policymakers.

Key Issues

Care management

Transitioning to a new therapy could present clinical challenges that must be closely considered by patients and physicians. An in-person consultation with corresponding laboratory tests and physical examination may be necessary to ensure a patient is suitable for a new therapy. Further, patients may face side-effects after beginning a new treatment that require close physician monitoring. As a result of reduced engagement with physicians and adjustments to new therapies, patients may be less adherent to self-administered treatments. Such issues raise key questions about whether patients could effectively transition to new drugs through a remote infrastructure. Providers, specialty pharmacies, health plans, and manufacturers will need to assess telehealth platforms and patient support services that allow physicians to appropriately prescribe new therapies and manage care. Physicians may also consider added flexibilities for offering home infusion services.

Health plan costs

In addition to the direct costs associated with COVID-19 testing and treatment, health plans—including Medicare Advantage (MA) and Part D plans—would also be affected by unanticipated changes in utilization under the pharmacy benefit. The increase in utilization of self-administered specialty treatments, common for the treatment of autoimmune conditions, accounts for nearly half of total pharmacy spend for some plans and could drive increases in per-member-per-month costs. Further, standalone Part D plans would not have incorporated the potential for shifting utilization patterns in their 2020 bids. At the same time, these plans would need to deploy resources to the management of patient care during the crisis, especially if utilization patterns shift dramatically.

Coverage and utilization management

While Part D plans use a variety of tools to manage drug utilization and costs, including prior authorization, step therapy, and quantity limits, the use of these tools is limited in Part B FFS (though it is permissible in MA). This means patients currently receiving a provider-administered therapy in Part B may need to meet plan-specific requirements to access a therapeutic alternative through Part D.

In response to COVID-19, the CMS has allowed Part D plans to waive prior authorization requirements for Part D drugs used to treat or prevent COVID-19 and to relax certain restrictions on early refills and home or mail delivery of prescriptions. Additionally, as part of the Coronavirus Aid, Relief, and Economic Security Act enacted on March 27, Part D plans are required to cover a 90-day supply of any covered drug if requested by a patient.

Out-of-pocket (OOP) costs

Patients on a drug under Part D may have substantially higher OOP costs than for their provider-administered drugs. Cost sharing in Medicare Part D differs significantly from that in Part B. Beneficiaries pay 20% coinsurance on Part B-covered drugs, some or all of which can be covered by supplemental insurance that 88% of Part B beneficiaries have. In contrast, Part D plans have much more varied benefit designs, use different deductibles, and set cost sharing amounts by formulary tier. Often, Part D plans place specialty treatments for autoimmune conditions on specialty tiers with up to 33% coinsurance. Supplemental coverage is not available for drugs covered by Part D.

COVID-19’s impact on the healthcare system will continue to evolve over the coming months as stakeholders adapt to the new environment. While the trajectory of the pandemic remains highly uncertain, stakeholders across the system should proactively prepare to respond in real time.

To learn more about these issues and how we can help with efforts to mitigate access challenges, connect with us.

Check out our COVID-19 Intel Center.

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