OIG: Part D plan’s preference for expensive hepatitis C drugs has led to increased Medicare spending

ByDonald L. Leech

Aug 15, 2022

Photo: Shana Novak/Getty Images

Some Medicare Part D plans left behind millions of dollars in savings because they didn’t cover generic versions of expensive hepatitis C drugs in 2019, in part because of the structure of the Part D program itself. same, according to a new report from the Department of Health and the Office of the Inspector General of Human Services.

This structure, according to the OIG, can incentivize plans to push beneficiaries toward expensive drugs. The programmatic structure of Part D can cause plan sponsors to prefer higher-cost versions, resulting in beneficiaries paying thousands in additional fees and nearly double Medicare reinsurance.

Over the past decade, Medicare Part D and its beneficiaries have spent billions of dollars on these hepatitis C drugs. In response to concerns about the affordability of hepatitis C treatments, drugmaker Gilead has introduced authorized generic versions of two of its branded hepatitis C drugs in 2019 (authorized generics are branded drugs that are sold without the brand name on their label).

Yet, despite the availability of these licensed generics, as well as other lower-cost branded options, preliminary OIG research suggested that Part D recipients continued to be more likely to use antiviral medications. Hepatitis C more costly than Medicaid recipients, resulting in higher expenditures in the RE portion.


Following the 2019 introduction of licensed generic versions of two brand-name hepatitis C drugs – Epclusa and Harvoni – in 2019, the use of licensed generic versions increased in Medicaid at higher rates than in Medicare Part D .

In 2020, some Part D plans did not cover the same authorized generics, limiting beneficiaries’ access to less expensive options. Medicare beneficiaries were also less likely to use other lower-cost branded options in 2020 compared to Medicaid beneficiaries.

Although manufacturer rebates reduced overall Part D spending on more expensive hepatitis C drugs, including Epclusa and Harvoni, they provided little relief to beneficiaries or the Medicare program, the OIG found. . Part D recipients without financial assistance paid, on average, $2,200 more out of pocket for more expensive hepatitis C drugs in 2020.

On top of that, the average Medicare catastrophic coverage payment for a beneficiary who was prescribed a higher-cost drug was over $8,000 more than a beneficiary who was prescribed a lower-cost drug. . As a result, Medicare spent $155 million more in catastrophic coverage payments for more expensive hepatitis C drugs, although a similar number of beneficiaries in each cost group achieved catastrophic coverage.

To reduce out-of-pocket expenses for beneficiaries and combat rising drug costs in Part D, OIG recommends the Centers for Medicare and Medicaid Services encourage Part D plans to increase access and l use of authorized generic versions of Epclusa and Harvoni.

The agency also recommended that CMS pursue additional strategies – such as provider and pharmacy training – to increase access to lower-cost medicines.

CMS agreed with both recommendations.


The base monthly premium for standard Medicare Part D coverage is decreasing in 2023, CMS announced last month. The average premium for drug insurance will be around $31.50 in 2023, down 1.8% from $32.08 in 2022.

The Medicare Part D program helps people with Medicare pay for both brand name drugs and generic prescription drugs. Part D remains one of Medicare’s most popular programs, with more than 49 million Medicare beneficiaries enrolled for prescription drug coverage, CMS said.

CMS said it continues to carefully analyze changes to the Part D program and engages with stakeholders to identify opportunities for improvement, particularly to reduce costs.

According to a report by the American Society of Healthcare Pharmacists.

In July, Senate Democrats released a plan for Medicare to negotiate prices for 10 drugs, with that number increasing in subsequent years. This plan has just been approved by the House and the Senate in the Inflation Reduction Act.

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