To understand how differences in benefit design between employer-based plans and other Medicare Part D plans influence the way patients move through the Part D benefit phases, Avalere analyzed how EGWP and non-EGWP Part D enrollees taking prostate cancer drugs moved through the coverage gap in 2018. Avalere’s analysis finds that over the course of 2018, more than half of brand prescriptions filled for prostate cancer drugs for enrollees in EGWPs were in the coverage gap compared to 19% of prescriptions for non-EGWP Part D enrollees.

EGWPs are a type of Part D plan for retirees from a specific employer or union group that have greater flexibilities than other Part D plans. Prior Avalere analyses have demonstrated that EGWPs use this flexibility to improve the generosity of drug benefits and lower out-of-pocket (OOP) costs for patients compared to non-EGWPs.

Part D beneficiaries move through the coverage gap and into catastrophic based on their true out-of-pocket (TrOOP) costs, which includes both the enrollees out-of-pocket (OOP) costs and manufacturer coverage gap discounts that apply for prescriptions filled during the coverage gap portion of the benefit. Lower OOP for EGWP enrollees before the coverage gap can cause these beneficiaries to enter the coverage gap having incurred lower TrOOP costs than non-EGWPs. In addition, lower OOP while in the coverage gap can further prolong the time EGWP enrollees spend in the coverage gap compared to non-EWGPs.

Overall, the analysis found that EGWP and non-EGWP beneficiaries using prostate cancer drugs enter the coverage gap at roughly similar rates, but EGWP enrollees stay in the gap much longer. In January, 95% of EGWP prescriptions and 87% of non-EGWP prescriptions were in the coverage gap. By February, however, many non-EGWP enrollees had moved into catastrophic coverage, leaving only 29% of non-EGWP prescriptions in the gap compared to 91% of EGWP prescriptions. By July, fewer than half of EGWP prescriptions for prostate cancer drugs were in the coverage gap and incurred gap discounts, ultimately ending the plan year in December with 27% of EGWP prescriptions in the coverage gap.

Figure 1. Percent of Non-LIS Prescriptions for Prostate Cancer Drugs Incurring Coverage Gap Discounts, 2018

Source: Avalere analysis of 2018 Part D Drug Event data 

The Part D benefit design, including the coverage gap, remains an area of significant policymaker interest. Recently, the Bipartisan Budget Act of 2018 made substantial changes to Part D’s coverage gap starting in 2019, including an increase in the manufacturer discount for brand drugs from 50% to 70% of costs in the gap. In addition, a provision of the ACA beginning in 2020 resulted in a large increase in the catastrophic threshold (the TrOOP needed to move from the coverage gap into the catastrophic phase) which extends the Part D coverage gap. Furthermore, congressional stakeholders are considering large-scale changes to the Part D program that would redesign the standard benefit.

As stakeholders consider these recent and proposed policy changes, the findings of this analysis highlight how impacts may vary for different groups of Part D enrollees due to differences in benefit design. 

Methodology

Avalere analyzed 100% Part D Drug Event (PDE) data from 2018 accessed under a research-focused data use agreement with CMS. Avalere identified claims for male, non-LIS beneficiaries for brand drug used to treat prostate cancer. Avalere then summarized the drug costs, coverage gap discount liabilities, drug utilization for these products by month separately for EGWP and non-EGWP beneficiaries.

To receive Avalere updates, connect with us.