New Avalere analysis of OOP spending in Medicare Part D for 3 commonly used insulins found relatively small variations in average patient cost sharing over the year for beneficiaries who did not receive the low-income subsidy (LIS). Specifically, Avalere found that non-LIS OOP costs for these products in 2018 ranged from an average of $95 at the end of the year to $136 during June and July. The OOP cost for an insulin prescription averaged $121 across the entire year.

The monthly variation in average OOP costs may be due to the differences in cost sharing across the phases of the Part D benefit: deductible, initial coverage, coverage gap, and catastrophic. While plans can—and almost always do—create their own benefit designs, the 2018 standard Part D benefit required beneficiaries to pay for all drug costs that occurred in the deductible, 25% in initial coverage, 35% in the coverage gap (for brand drugs), and 5% in the catastrophic phase.

Most prescriptions for these 3 commonly used insulins occurred in the earliest phases of the Part D benefit, particularly at the beginning of the year. While Avalere found that 55% of insulin claims had costs below the initial coverage limit (ICL) across the year, including virtually all those filled in January, only 14% of those filled in December had costs below the ICL. Conversely, 17% of prescription fills for these 3 commonly used insulin products incurred costs above the catastrophic threshold—less than 1% of those filled in January but almost half (45%) in December.

Many other factors can impact beneficiary OOP. For instance, Avalere also found that average OOP spending on the insulin products in this analysis were slightly higher for beneficiaries enrolled in a standalone Part D Prescription Drug Plan (PDP) compared to a Medicare Advantage plan that also provides Part D coverage (MA-PD). In 2018, average monthly OOP spending for these products by non-LIS beneficiaries enrolled in a PDP was $127 compared to $112 for non-LIS beneficiaries enrolled in a MA-PD. In addition, other factors that can impact OOP include, for example, a plan’s deductible, tier placement and benefit design, insulin unit volume, and a patient’s other drug utilization.

Federal policymakers are considering policies that would reduce or limit patient costs for insulin. Even so, the patterns in beneficiary costs demonstrated in this analysis could evolve, potentially impacting access and adherence to treatments.

Methodology

Avalere analyzed 2018 Part D prescription drug event data under a CMS research data use agreement. Avalere identified all non-LIS beneficiaries taking 1 of 3 common insulin products based on National Drug Codes identified in December 2018 Medispan data. Avalere excluded claims for beneficiaries without a full year of Part D enrollment in 2018, that were not non-LIS throughout the entire plan year, lived outside the 50 states plus DC, changed Part D plans midyear, or were enrolled in an EGWP. Avalere used benefit phase codes provided by CMS to identify the benefit phase in which each insulin claim started and ended, and used the date of service to identify the month in which each claim was filled.

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