- CMS on Monday unveiled a new model for Medicare Part D to test lowering out-of-pocket insulin costs for diabetics on some of the privately run prescription drug plans.
- The voluntary model puts a $35 cap on copays for a 30-day supply of insulin throughout the benefit year for eligible enrollees. CMS said initial projections assume it could save more than $250 million in over five years for the federal government, largely due to pharmaceutical manufacturers paying additional coverage gap discounts.
- Some commercial payers have already made similar moves to lower insulin costs, such as Cigna and Express Scripts. CMS is requesting applications from pharmaceutical manufacturers and sponsors to apply for the new model, which is expected to launch in January. The pharmaceutical giant and insulin maker Eli Lilly announced it will participate and Sanofi also expressed its support.
Under current Part D benefits, out-of-pocket insulin costs can fluctuate from one month to the next. Those who can't afford high out-of-pocket costs sometimes ration the drug, which can lead to severe medical complications and even death.
The new model seeks to ensure predictable copays for a broad set of insulins, including rapid-acting, short-acting, intermediate-acting and long-acting. One in every three Medicare beneficiaries has diabetes and more than 3.3 million use one or more of the common forms of insulin, according to CMS.
The model will stem out-of-pocket costs for those specifically on pricier Part D plans, which sell more generous prescription drug coverage than basic benefit plans. CMS said about 80% of prescription drug plans are these enhanced plans and 25 million (54%) of beneficiaries are enrolled.
But enhanced plans do carry higher premiums. In 2020, average monthly premiums in Part D are $32.09 for a basic plan and $49.32 for an enhanced plan.
Beneficiaries who take insulin and enroll in a plan participating in the new model should save an average of $446 in annual out-of-pocket costs for insulin, or more than 66% relative to their average cost-sharing for insulin today, CMS said.
The new model hinges on changes to CMS' existing Manufacturer Coverage Gap Discount Program. Participating pharmaceutical manufacturers will pay the 70% discount in the coverage gap for insulin included in the model, but those manufacturer discount payments would now be calculated before the application of supplemental benefits.
To encourage broad participation, CMS said it will provide additional risk corridor protection for 2021 and 2022 for plans that have higher enrollment than average from insulin-dependent diabetic patients.
CMS said it views this model as "an opportunity for Part D sponsors and manufacturers to partner together to put patients before profits and lower out-of-pocket costs for insulin."
Pharmaceutical manufacturers that want to participate in the Part D Senior Savings Plan must submit applications by Wednesday and Part D sponsors must by May 1.