Selected highlights from Avalere’s analysis of the data include:

• Increasing Prevalence of Five-Tier Formularies with Multiple Coinsurance Tiers: All Part D plans have moved to formularies with four or more tiers; approximately 89 percent of plans will have five or more tiers in 2015, a 53 percent increase since 2012. The number of 5-tier PDPs with two coinsurance tiers will also surge next year-while only three plans used this formulary structure in 2014, 335 plans will do so in 2015. Among these plans, coinsurance on tier four (typically used for non-preferred brands) averages 44 percent.

• Cost Sharing Across Tiers is Relatively Stable, But More Drugs are Subject to Coinsurance: Among PDPs with five formulary tiers, cost-sharing amounts across tiers remain on par with 2014 amounts. However, an increasing number of covered Part D drugs are subject to coinsurance compared to last year.

• Specialty Tiers Universal Aspect of PDP Benefit Design: Every PDP offered in 2015 will designate a specialty tier. Ninety percent of these plans designate tier 5 as the specialty tier.

• Preferred Pharmacy Networks Still Popular Among Top PDPs: As in previous years, many of the top 10 PDPs by enrollment will differentiate cost sharing for preferred and non-preferred pharmacies.

• PDPs Continue to Increase Use of PA and QL to Manage Drug Utilization: The average percentage of covered drugs with prior authorization (PA) will increase from about 20 percent in 2014 to about 23 percent in 2015, with branded products more commonly subject to this type of management tool. The proportion of drugs subject to quality limits (QL) will also increase slightly, from 20 percent in 2014 to 21 percent in 2015. Nominal changes in the percent of drugs subject to step therapy will be experienced between 2014 and 2015.

• Top PDPs Will Cover Fewer Drugs in 2015: Nine out of the top 10 PDPs will cover a smaller portion of total Part D drugs in 2015 compared to 2014. The breadth of coverage ranges significantly between plans. For example, the Aetna Medicare Rx Saver PDP covers just 50 percent of Part D drugs and the Humana Enhanced PDP covers 68 percent of total drugs.

As premiums trend downward for the 2015 benefit year, low-cost PDPs-as well as others-are designing narrower formularies that cover fewer drugs and impose higher rates of PA and QL. As sponsors move away from $0 deductible plans and reduce coverage of drugs in the gap, beneficiary out-of-pocket burdens will increase next year. Life sciences companies should be aware that a greater proportion of Part D drugs will be subject to coinsurance, rather than flat dollar copays, which could impact beneficiary access to and use of certain prescription medications. Additionally, many PDPs are covering a smaller proportion of drugs and increasing implementation of UM tools as mechanisms to manage Part D utilization and costs. These trends align with cost-sharing approaches utilized in other markets, including the health insurance exchanges and employer plans.

Open enrollment in the Part D market began Oct. 15. CMS will release enrollment data in February 2015 that will shed light on how plan consolidation, premium changes, and other benefit design trends affected beneficiaries’ plan selection decisions for the new coverage year.

For any questions about open enrollment in the Part D market, contact Christine Harhaj at CHarhaj@Avalere.com