Showing posts with label donut hole. Show all posts
Showing posts with label donut hole. Show all posts

Friday, August 25, 2023

The Donut Hole Gets Real


 


Like most people my age I am taking some medications regularly and got the text message today from my pharmacy that I could pick up one of those prescriptions. The medication is a commonly prescribed medication from a group of medicine called  Non-Vitamin K antagonist oral anticoagulants or NOACs.  The medication is apixaban or Eliquis. People commonly take it to prevent blood clots or emboli and the complication including stroke, thrombosis, and pulmonary emboli. I have been taking it for about 2 years.

I usually get a prescription for 180 – 5 mg tabs and the last time I picked it up was on May 25, 2023.  At that time there was a copay of $94.  I am on Medicare A and B and a Medicare Supplemental Policy.

This time as I drove through the line the pharmacist told me the copay was $500. I asked him to clarify what had happened, but he had no idea.  Even though I had all of my previous refills at this pharmacy he had no idea what had happened and advised me to call the insurance company. When I got home that is exactly what I did. They advised me that this was the standard coverage gap for prescription drugs also known as the donut hole.  The insurance company pays for $4660 worth of medication (in my case almost all apixaban) and at that point copays stop and the patient is responsible for a flat 25% of the total cost of the medication or the $500).  When the patient incurs a total of $7,400 in pharmaceutical costs the number falls to 5% of the total, but by then it is probably a new year and the running tally resets. The customer service rep told me that I might be able to apply for assistance through company or state program, but they all had low-income requirements.

The donut hole started in 2006 as a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. All Medicare Part D plans have it. It initially required patients to pay 100% of the drug cost during the coverage gap.  That was reduced to the current 25% by the Affordable Care Act (ACA) passed in 2010. By 2025 there will be a cap of $2,000 for costs incurred in the coverage gap

It turns out that apixaban is number 10 on the list of 17 most expensive drugs purchased through Medicare programs.  In 2019, the average person taking it spent $7,234 for 12 refills per year and $2,172 in out-of-pocket costs.  A reform of this pricing has been suggested but obviously has not been done since I am paying about the 2019 list price.   The top drugs on this list are easily not affordable for many people. The cost of the top 5 agents are $16,348 to $182,162 per year with out-of-pocket costs ranging from $3,242 to $11,532 due to the coverage gap (1).  Apixaban in the single largest Medicare Part D expenditure at $12.5 billion per year (last filed in 2021).

Flashbacks of my work in acute care. For 22 years, I treated low to no income people in acute care settings. I was lucky to work with excellent social workers who would exhaust every available resource to help them with funding for medical care and housing.  Getting their medications funded was a chronic problem.  People on Social Security Disability do not get a lot of money each month.  At one point the state instituted a spenddown.  That meant if you were hypothetically making $1,000/month in disability payments, the state could demand that you spend a significant portion of your disability on medications before they would add any additional money for that purpose.  It is not possible to live very well – if at all under those financial constraints.

One of our attempts to adapt was to use the company scholarship programs to get them assistance from pharmaceutical companies. With many patients that took a great deal of coordination and filling out forms.  It also required nursing time for both the paperwork and an additional effort to manage free samples of medication. We were often scrambling to find medications in urgent situations or because one of the authorizations had lapsed.  All the samples also had to be catalogued by lot number in case there was a recall of that medication. I did not look forward to dealing with the forms or samples but realized we had to do it or some people would not get the medication they needed.

Today the tables were turned and I was looking at an arbitrary payment or I would not get the medication.  I have also heard this story many times. People unable to pick up a needed medication because of the copay – leading to an abrupt discontinuation or attempting to stretch out an existing medication until the first of the year. You really cannot stretch out an apixaban prescription.  I have read many news stories about people trying to stretch out their expensive forms of insulin resulting in medical compromise and death. I was lucky enough to have savings to cover the $500.

What are the problems with the donut hole?  I can think of at least 4:

1: It kicks the can down the road (also known as cost shifting). When confronted with these large payments, I can imagine a lot of people tell the pharmacist to forget about it and drive away. In the case of this medication that can lead to strokes, pulmonary emboli, thrombosis of large blood vessels, and/or death.  Treatment typically involves hospitalization and possible nursing home placement.  Worst case scenario might involve death, prolonged rehabilitation and the hospital or nursing home eventually seeks all of a patient’s assets to cover the accumulating bills.  All of those events could have been prevented with the prescribed medication.

2:  The structure of this billing is an incentive for pharmaceutical companies to increase prices since that will cause benefits to hit the wall earlier and cause the patient to enter the coverage gap and to pay more cash.  In fact, it is an obvious way to extract the maximum payment from both the insurance company and the patient. 

3:  It is another classic example of how politicians work to subsidize businesses in a non-transparent way.  I know more about medical billing than most people but I had no idea I was turning over $500 today until I was advised by the pharmacist.  

4:  This is a clear example of why the Republican and Libertarian ideas about "free market" healthcare are false.  In other words, we would choose to pay for what we really wanted in a free market and pay those market prices.  Obviously, anyone would pay $500 (or more) to prevent a stroke - but not if it means not eating.  The politicians involved will say: “well yes – but there is no free market.”  Of course, there is no free market. The market is actively manipulated to optimize profits for health care companies and minimize guidance from physicians.  That is the political system in the US. No doctor that I know of wants to prescribe a medication and hear at some point that the patient could not afford to take it. Sometime that news is very slow and the prescribing doctor does not find out until they see the patient back in a couple of months.

Don't ever think that American "free market" capitalism is a big deal in health care.  It is a big deal when politicians work with businesses to give them access to your assets and allows other businesses with more focal products like pharmaceuticals to charge whatever they want. There is no better example than the donut hole.  The cost savings that these companies promised is not from cost containment, but from rationing and that is a big difference. 

 

George Dawson, MD, DFAPA

 

References:

Dusetzina SB. Relief in Sight - Estimated Savings under Medicare Part D Redesign. N Engl J Med. 2021 Dec 23;385(26):e93. doi: 10.1056/NEJMp2116586. Epub 2021 Nov 10. PMID: 34758246.


Supplementary 1:

I downloaded this list of medication arranged by total Medicare Part D expenditure from the CMS web site on 8/26/2023.  The most recent data they have is for 2021.  Medications for psychiatric indications do not appear until # 24 Invega Sustenna and #31 Latuda.  More than a little interesting because psychiatrists have endured medication based attacks for over 20 years - primarily on grossly inflated conflict of interest concerns, pharmaceutical company profits concerns, and drug safety.  Many of those attacks continue today even though most of these medications are inexpensive generics and much of the rhetoric has lost its punch.  These same critics apparently have no similar concerns about significantly more profitable and higher risk medications.  That adds to my commentary in this post



Supplementary 2:  The Medicare Part Drugs selected for HHS negotiations with manufacturers include the following.    There is some overlap with the most expensive medication listed above but Farxiga, Entresto, Enbrel, and the list of diabetes mellitus medication are not on that list. For more information on the list click on the link at the bottom of the table. 

Medicare Drugs Selected by HHS for Price Negotiations

 

Eliquis

 

Jardiance

 

Xarelto

 

Januvia

 

Farxiga

 

Entresto

 

Enbrel

 

Imbruvica

 

Stelara

 

Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill

 

 

https://www.hhs.gov/about/news/2023/08/29/hhs-selects-the-first-drugs-for-medicare-drug-price-negotiation.html

 

 

 

Graphic Credit:

Evan-Amos, Glazed Donut Public domain, via Wikimedia Commons"

Link:

https://commons.wikimedia.org/wiki/File:Glazed-Donut.jpgalt="Glazed-Donut

File:

https://upload.wikimedia.org/wikipedia/commons/thumb/a/a5/Glazed-Donut.jpg/512px-Glazed-Donut.jpg