‘A Complicated and Not Particularly Transparent Process’
OIG said it expects to release a report later this year with more detail about the decision that shifted ustekinumab coverage from Part B to Part D.
First cleared for US sales in 2009, ustekinumab is approved for psoriasis, psoriatic arthritis, Crohn’s disease, and ulcerative colitis. It can be given subcutaneously or intravenously.
Part B does not generally cover self-administered drugs. The infused version of ustekinumab has been covered under Medicare Part B since it reached the market.
“However, Part B coverage of the subcutaneous versions has been less straightforward,” OIG said in the report.
In 2020, Medicare administrative contractors — the units or affiliates of insurers that for decades have processed Part B claims for the traditional Medicare programs — determined that subcutaneous ustekinumab did not meet the criteria for coverage under Part B. Implementation of this change was delayed due to the COVID public health emergency but has since taken effect.
The shift in ustekinumab coverage to Part D eroded financial protections of many people on Medicare when Part B covered the drug.
Almost 9 in 10 people enrolled in Medicare Part B have supplemental insurance such as Medigap, employer coverage, or Medicaid to fully or partially cover their cost-sharing requirements, the OIG report said. That means Part B coverage shielded many patients from high ustekinumab costs.
In contrast, patients who self-administered the drug at home under Part D coverage paid an average of almost $6000 out of pocket if they did not receive any type of financial assistance, OIG said.
“From a financial standpoint, as long as you have Part B coinsurance, it would be much cheaper to get the drug in your doctor’s office than getting it through a pharmacy, unless you qualify for the low-income subsidy,” OIG Regional Inspector General David Tawes, who supervised the team that produced the report, told this news organization.
OIG has previously reported that post–point-of-sale rebates paid by manufacturers sometimes lower the costs incurred by Part D plans by a significant margin. But this was not the case with ustekinumab. Instead, OIG said the gap between initial and actual costs of ustekinumab was reduced by less than one third even with rebates. Rebate information is considered confidential.
“The whole negotiation structure is a complicated and not particularly transparent process,” Mr. Tawes said.
Backchannel Discounts, Top-Line Prices
The IRA is bringing some more transparency to the process through negotiations, said Mariana P. Socal, MD, associate professor at the Johns Hopkins Bloomberg School of Public Health in Baltimore. Patients who buy medicines that have been through the CMS negotiation process will be able to see if they are being charged correctly.
Dr. Socal noted that there’s something of a disconnect in discussions of Part D between how insurers and consumers view prices.
For Part D plans, the list prices represent the beginning of negotiations. They get rebates from drugmakers’ list prices for medicines, which insurers say work to lower premium costs.
“For plans, those prices are unrealistic. They are simply a sticker price. But for patients, for the Medicare beneficiaries, these prices are very real” because they are used to set copays, Dr. Socal said.
Dr. Dusetzina reported receiving funding from Arnold Ventures and the Commonwealth Fund for research related to drug pricing. Dr. Socal reported receiving funding from Arnold Ventures.
A version of this article first appeared on Medscape.com.