OBJECTIVES

The closure of the Medicare Part D coverage gap (i.e., “donut hole”) from 2010-2019 was intended to help decrease out-of-pocket costs for beneficiaries. However, yearly increases in list prices and the introduction of costlier drugs may have limited savings for beneficiaries taking high-cost drugs. Our objective was to determine how projected annual out-of-pocket costs in Part D changed from 2010 through 2019 for rheumatoid arthritis (RA) biologics.

METHODS

: We identified seventeen RA biologic drug/strength combinations and used the Medicare Formulary and Pricing Files to apply yearly price changes to the standard benefit design to project annual out-of-pocket costs and phase of spend.

RESULTS

: List prices rose each year for every product studied, with an average increase of 160% for the six drugs available over the entire decade. For these six products, projected annual out-of-pocket costs were on average 34% lower in 2011 than in 2010 ($6108 to $4026) but only 21% lower in 2019 ($6108 to $4801) due to yearly increases in list price. The four products with higher out-of-pocket costs in 2019 than in their first year available all entered the market between 2011-2015. For all products studied, percentage of spend in the catastrophic phase increased yearly and was an average of 22% higher in 2019 than in 2010 or year first available.

CONCLUSIONS

: While beneficiaries experienced large reductions in out-of-pocket spending from 2010 to 2011, more than a third of those savings was lost by 2019 due to annual increases in list prices. With no further reductions in gap cost sharing to come in 2020 or beyond, future list price increases will soon return out-of-pocket costs to 2010 levels, driven mainly by increased catastrophic spending. Our results suggest a need for a cap on patient catastrophic spending as well as possible limits to now industry standard yearly price hikes.