Avalere analysis finds that transitioning coverage for drugs that treat rheumatoid arthritis from Medicare Part B to Part D would substantially increase the share of prescriptions occurring in Part D’s catastrophic phase of the benefit for impacted patients. In the catastrophic phase of the Part D benefit, the government is directly responsible for 80% of drug costs, with patients paying 5% cost-sharing and plans paying the remaining 15%. Policymakers and stakeholders are increasingly focused on the catastrophic phase of the benefit in part due to the growing proportion of patients who reach it and the share of spending contributed by the federal government.

Medicare covers most prescription drugs under Part B and Part D. Drugs that are administered by a physician are typically covered by Part B, while those administered by the patient are typically covered by Part D. Drugs that treat RA can be covered under Part B and/or Part D. Most patients taking Part B-covered RA drugs pay relatively little out-of-pocket (OOP) because of supplemental coverage for Part B services—through, for example, a Medigap plan or Medicaid.

Patients taking Part B-covered RA drugs have relatively low spending in Part D. As such, a relatively small share of their scripts—only 11%—occur in the catastrophic phase of the Part D benefit.

Transitioning Part B-covered RA drugs to Part D would change how these patients progress through the Part D benefit. Under this scenario, two-thirds (67%) of the Part D prescriptions received by these patients would then occur in the catastrophic phase of the benefit, up from only 11%.

Avalere and UCB collaborated on this analysis under the terms of a CMS Research Data Use Agreement (DUA) with funding to conduct the analysis provided by UCB.

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Methodology
Avalere analyzed prescription drug event (PDE) data and Medicare Part B fee-for-service (FFS) 2016 claims under a CMS Research Data Use Agreement. We analyzed a cohort of patients representing less than 20% of total Medicare beneficiaries; this cohort included beneficiaries we identified as receiving RA treatments through Part B during 2016. We defined Part B-covered RA therapies to include 1 or more of the following drugs: abatacept, azathioprine, azathioprine sodium, certolizumab pegol, golimumab, infliximab, infliximab-abda, infliximab-dyyb, infliximab-qbtx, rituximab, and tocilizumab.

To simulate the transition of RA drugs from Part B to Part D for the identified beneficiary cohort, we inserted Part B claims for RA therapies into their Part D claims history based on the claims’ dates of service.

Avalere then used plan benefit package data to recalculate Part D OOP costs assuming no other changes in drug utilization. Avalere assumed that the Part D negotiated price for the Part B-covered drugs would be 30% higher than the Part B allowed amount to reflect manufacturer rebates paid after the point-of-sale. In addition, Avalere assumed that beneficiaries would be responsible for 33% coinsurance for the Part B-covered drugs in the initial coverage phase under Part D, typical of specialty tier cost sharing.

Because Part D claims can span multiple benefit phases, Avalere counted any claim straddling the catastrophic phase and earlier benefit phases as a prescription occurring in the catastrophic phase.

The analyzed cohort excluded beneficiaries in an employer group waiver plan (EGWP). Avalere used the Medicare Current Beneficiary Survey (MCBS) to estimate the share of non-EGWP Part B beneficiaries with supplemental coverage. Avalere assumed that beneficiaries with supplemental coverage do not have OOP costs under Part B but would pay Part D cost sharing.