Specialty Drug Users to Gain Relief Under Medicare Reforms

An analysis comparing estimated out-of-pocket (OOP) costs in 2023 and 2026 for patients with Medicare Part D prescription drug coverage—before and after 3 cost-reducing provisions took effect—found that the Medicare Prescription Payment Plan (MPPP) may help patients maximize their savings and benefit from these changes.1

A study published online today in JAMA Health Forum examined the potential impact of 3 provisions under the Inflation Reduction Act (IRA) meant to reduce Medicare Part D OOP costs for beneficiaries using 3 high-cost specialty drugs: etanercept, ustekinumab, and ibrutinib:

• An annual Part D OOP maximum of $2000 starting in 2025 that would be indexed by program growth in subsequent
• A voluntary MPPP beginning in 2025 that would spread out Part D OOP costs throughout the year via monthly payments
• Negotiated drug prices starting in 2026

Etanercept is indicated to treat rheumatoid arthritis, psoriasis, psoriatic arthritis, and ankylosing spondylitis; ustekinumab is approved to treat psoriasis, psoriatic arthritis, Crohn disease, and ulcerative colitis; and ibrutinib, chronic lymphocytic leukemia, Waldenström macroglobulinemia, and chronic graft-vs-host disease. Each of these medications was on the first list of 10 drugs up for price negotiation under the IRA,2 and reactions were mixed in August when their agreed-upon negotiated prices were released.3

This analysis looked at estimated out-of-pocket costs for 3 specialty drugs that often represent a significant cost burden for Medicare Part D beneficiaries and which were selected for 2026 drug price negotiation under the Inflation Reduction Act. | Image Credit: © driftwood-stock.adobe.com

Keeping in mind that in 2026, the IRA will lower annual OOP costs for each of these drugs to $2100, the following results were seen for the annual list prices for a monthly supply absent negotiated drug prices:

• Etanercept: overall price of $7106
  • Under 2023 benefit: $6807
  • Under 2026 benefit: $2100
• Ustekinumab: overall price of $13,836
  • Under 2023 benefit: $10,845
  • Under 2026 benefit: $2100
• Ibrutinib: overall price of $14,934
  • Under 2023 benefit: $11,504
  • Under 2026 benefit: $2100

Next, considering a scenario in which the negotiated lower prices were in effect for both years, these lower totals were seen:

• Etanercept: overall price of $2355
  • Under 2023 benefit: $3957
  • Under 2026 benefit: $2100
• Ustekinumab: overall price of $4695
  • Under 2023 benefit: $5361
  • Under 2026 benefit: $2100
• Ibrutinib: overall price of $9319
  • Under 2023 benefit: $8135
  • Under 2026 benefit: $2100

The authors explained that for their estimates they used standard Part D benefit parameters for beneficiaries who were not receiving low-income subsidies, as well as “assumed use of the specialty drug alone because these drugs account for more than 90% of total annual OOP costs among beneficiaries who use them.”4

In addition, beneficiaries who do not enroll in the MPPP by 2026 will continue to face elevated OOP costs for their first prescription fill in January vs enrollees. For etanercept, these costs would be $1050 vs $175; for ustekinumab, $1635 vs $175; and for ibrutinib, $2100 vs $175. To reach the $2100 OOP limit, this means it would take three 30-day refills for etanercept, 2 refills for ustekinumab, and 1 refill for ibrutinib.

“Although price negotiation has a relatively small contribution to lowering OOP costs, it will enable savings to the Medicare program necessary to offset the costs of the new OOP maximum,” the authors wrote. “Beneficiaries who do not enroll will face substantial OOP costs at the start of the year, even with the annual OOP maximum in effect.”

They explained that enrolling for coverage earlier in the year could help prorate costs evenly over the remainder of the year, thereby reducing the frontloaded OOP burden.

References

1. Doshi JA, Li P, Klebanoff MJ, Lin JK. Inflation Reduction Act provisions and Medicare part D out-of-pocket costs for specialty drugs. JAMA Health Forum. 2025;6(5):e251387. doi:10.1001/jamahealthforum.2025.1387

2. Mattina C. CMS releases list of 10 drugs subject to price negotiation under IRA. AJMC®. August 29, 2023. Accessed May 15, 2024. https://www.ajmc.com/view/cms-releases-list-of-10-drugs-subject-to-price-negotiation-under-ira

3. McCormick B. Reaction mixed after CMS unveils negotiated Medicare drug prices. AJMC. August 19, 2024. Accessed May 15, 2024. https://www.ajmc.com/view/reaction-mixed-after-cms-unveils-negotiated-medicare-drug-prices

4. Doshi JA, Li P, Pettit AR, Dougherty JS, Flint A, Ladage VP. Reducing out-of-pocket cost barriers to specialty drug use under Medicare Part D: addressing the problem of “too much too soon.” Am J Manag Care. 2017;23(3)(suppl):S39-S45.