Medicare patients need to be aware of significant formulary changes when choosing a prescription drug plan for next year, according an Avalere Health study of 2011 Medicare Part D plans.

Avalere Health, Medicare Part D, prescription drug plan, formulary, prescription drug, Dan Mendelson, Humana Walmart-Preferred Plan, pharmacy, preferred pharmacy, generic drugs, specialty drugs, Kathleen Jaeger, National Community Pharmacists Association, community pharmacist

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Study warns of big changes in Medicare Part D plans

November 24th, 2010

WASHINGTON – Medicare patients need to be aware of significant formulary changes when choosing a prescription drug plan for next year, according an Avalere Health study of 2011 Medicare Part D plans.

The health care advisory firm said this week that many Part D plans have changed the drugs they cover and have modified the cost-sharing charged to consumers in the coming year.

For example, more plans will be dividing their formularies into five tiers, enabling them to charge consumers different rates of cost sharing to encourage the use of specific products, the Avalere study finds. In 2011, 41% of plan offerings have five or more tiers, up from 27% in 2009. Of plans that use five tiers, 42% will segment generic drugs into two tiers to be able to charge more for a nonpreferred generic product. And 27% of plans using that design will have two cost-sharing tiers for specialty drugs – one of which is usually the designated specialty tier – to steer beneficiaries to specific specialty products.

"This new analysis shows that consumers should put great thought into what drugs they are likely to need covered under their Medicare drug benefits before choosing a plan," Dan Mendelson, chief executive officer of Avalere health, said in a statement. "In 2011, it will pay to shop around for the plan that is best for you.”"

The analysis also noted that prices paid by consumers in 2011 will be highly dependent on which pharmacy a patient uses. For example, in the Humana Walmart-Preferred Rx plan, coinsurance for Enbrel (50 mg/ml injection) at a preferred pharmacy in a particular ZIP code is 35% of the drug's negotiated price, or $588, while at a nonpreferred pharmacy in the same ZIP code the coinsurance for the same dosage level of Enbrel jumps to 50% of a slightly higher negotiated price, or $849, Avalere reported.

"Consumers interested in the lower premiums offered by this plan need to understand that their costs — particularly on injected and specialty pharmaceuticals — may be significantly higher if they don't shop at the pharmacy designated by the plan," Mendelson stated.

Many plans also use additional tools to manage utilization of drugs, which can sometimes impede access to pharmaceuticals, according to the study. Use of prior authorization and quantity limits has increased every year since 2008. The percentage of covered drugs subject to prior authorization rose from 12.4% in 2008 to 16.7% in 2011.

The Avalere study's findings led Kathleen Jaeger, executive vice president and CEO of the National Community Pharmacists Association, this week to urge senior citizens to examine Medicare Part D plans closely and to seek counsel from a community pharmacist if they have questions or need advice.

"The study released by Avalere Health underscores the importance for seniors and caregivers of reading the fine print when determining what plan is best for the particular Medicare beneficiary, because some of the headline-grabbing offers might not best meet their medication needs," Jaeger said in a statement. "Community pharmacists are a valuable resource for patients and caregivers navigating the Medicare Part D prescription drug program maze. Given that much has changed from its launch four years ago to today, community pharmacists stand ready to help enrollees determine what plan works best during the annual open enrollment season.

She noted that more than ever before, consumers must be fully informed about the total prescription drug plan being offered, including deductibles, co-pays and the actual cost of the drug.

"Sometimes, when something sounds too good to be true, it is," Jaeger commented. "In some cases, consumers are having their choice of community pharmacies taken away, some plans are pushing mail order pharmacies with 1-800 lines — all of which take the personal interaction out of providing quality care in dispensing medication and corresponding counseling. And in most cases, the long-established relationships between patients and their community pharmacists are being broken in the quest for a Part D plan to simply increase its market share. We can't let patient care take a back seat to market share."