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Seniors’ out-of-pocket spending on cancer drugs climbs higher

  • A senior taking one of 13 drugs for cancer could expect to pay an average of roughly $10,000 out of pocket this year, up from about $8,800 in 2010, according to a recent JAMA report that analyzed Medicare Part D spending data. 
  • The estimate, which uses point-of-sale prices that don’t reflect rebates or discounts, compares expected out-of-pocket spending under the standard Part D benefit design in 2010 and 2019 for the 13 oral cancer drugs available in both years. Over that time period, average out-of-pocket spending rose for 12.
  • Many more drugs have been approved for cancer since 2010, bringing the total covered under Part D last year to 54. For 48 of those treatments, monthly prices per fill exceeded $10,000 in 2018. 

Rising prices, coupled with insurance benefit design within Medicare Part D, can leave seniors exposed to significant costs when treated with specialty cancer drugs, the study found. 

Medicare Part D coverage does not have a cap on out-of-pocket spending for seniors. Instead, beneficiaries typically pay coinsurance, or a percentage of the drug’s cost, which can lead to significant costs as drug prices climb.

The study authors, affiliated with the Vanderbilt University School of Medicine and Harvard Medical School, note in particular that, since coinsurance is based on point-of-sale prices, rebates and discounts wouldn’t necessarily lower out-of-pocket costs for beneficiaries. 

“Because beneficiaries pay a percentage of the drug’s price and have no out-of-pocket spending limits on Part D, even large price decreases may not provide sufficient financial relief to patients requiring long-term anticancer drug use,” the researchers wrote. 

Included in the analysis were several notable cancer drugs, such as Celgene’s Revlimid (lenalidomide), Pfizer’s Sutent (sunitinib) and Novartis’ now-generic Gleevec (imatinib). 

The Affordable Care Act did take on out-of-pocket spending by reducing coinsurance for branded drugs in the coverage gap. In 2010, seniors were responsible for 100% of the cost of the drug when they reached the coverage gap. Now, they are responsible for no more than 25%.

The Trump administration has made lowering drug prices a priority, releasing a blueprint last year on how to achieve that goal. Progress so far has been mixed, however, with the drug industry winning some relief.

Last week, the Centers for Medicare and Medicaid Services released a final rule aimed at addressing prices in the Medicare Part D program, but rolled back some previous proposals, including one that would have allowed plans to deny coverage for certain protected drug classes.