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While reforms to Medicare in the 2010s closed the "donut hole" coverage gap for many beneficiaries, leading to reductions to out-of-pocket costs for prescription medications, those savings have started to disappear.
An analysis published Monday in JAMA Network Open suggests that rising drug prices have eroded some of these savings, particularly for people with rheumatoid arthritis, or RA.
Researchers said beneficiaries with pain autoimmune disorder initially saw out-of-pocket drug expenses drop by 34 percent from 2010 to 2011, starting the year changes were made to Part D coverage. But drug price increases of up to 160 percent since then have cut beneficiary savings to 21 percent from 2010 to 2019 -- a significant difference.
"Closing the Part D coverage gap did help lower out-of-pocket costs for seniors," co-author Alexandra Erath, a student at Vanderbilt University School of Medicine, told UPI. "(But) yearly increases in drug prices will drive out-of-pocket costs even higher."
More than 1.3 million adults in the United States suffer from RA, according to the American College of Rheumatology. Most of them are seniors, older than age 65, and thus receive at least part of their healthcare coverage under Medicare.
Until 2010, Medicare Part D effectively placed a limit on the amount Medicare would pay for prescription drugs, with beneficiaries responsible for covering any shortfall. The "donut hole," as it was known, often meant Medicare beneficiaries had to pay thousands of dollars out-of-pocket annually for medications.
Since 2010, changes to Medicare gradually phased out this coverage gap. To see how these changes impacted those with RA, Erath and her colleagues reviewed data from the Medicare Formulary and Pricing Files for 17 biologic drug and strength combinations used in the treatment of the condition.
From 2010 to 2011, beneficiaries saw out-of-pocket costs dropped by 34 percent, from a mean of $6,108 to a mean of $4,026. From 2010 to 2019, however, prices for the six prescription drugs available for RA increased by 160 percent. This pushed the mean out-of-pocket costs back up to a mean of $4,801 by 2019 -- still 21 percent lower than 2010, but almost 20 percent higher than 2011.
"Our findings show that annual increases in list price are a powerful driver of increased out-of-pocket costs for consumers, so limiting how much a manufacturer can increase a drug's price each year would help keep consumers' costs down," Erath said. "Adding a yearly maximum on out-of-pocket costs would also help keep patients' drug costs affordable and predictable."