Medicare Part D at Age 16: A Teenager or Adult?

Where were you when Part D was passed? In the 16 years since the Medicare Part D benefit was implemented, quite a bit has changed in the world. In this interactive keynote session to kick off AMCP 2021,faculty fielded questions about implementing Part D inside of CMS and what operational and compliance challenges the industry is dealing with today. They alsodiscussed where they thought the Medicare Part D benefit is moving in the future and how plans, pharmacy benefit management companies, and the pharmaceutical industry should be prepared.

Dan Mendelson, MPP,
founder of Avalere Health, facilitated the panel, which included Kim A. Caldwell, RPh, principal at Texas Star Healthcare Consulting, LLC; Babette S. Edgar, PharmD, MBA, FAMCP, senior area vice president at BluePeak Advisors; and Mark McClellan, MD, PhD, director of the Duke-Margolis Center for Health Policy. The panel discussed changes in drug benefit tiering over the years, and whether beneficiaries understand the benefits that they are signing up for. In agreement with her fellow panelists, Dr. Edgar said, “For the majority of beneficiaries, the answer is no.” The complexity of the pharmacy benefit design may easily confuse seniors who it is intended to serve. 

From a premium perspective, Medicare Part D has aged well. Competition among Part D plans has kept premiums lower than was originally expected, the panelists agreed, and this has resulted in a lower overall program cost to the government. Yet, as Medicare Part D turns 16, a virtual meeting attendee wondered, “Is Medicare Part D a teenager or an adult?” The panel discussed how it could become a “more mature adult,” analyzed what works, and what needs to change.

The panel acknowledged what they called a “rising level of frustration” that Medicare ultimately makes the market for many products but does not have direct control over the costs and discussed the need for change. Panelists offered opinions on how value should be measured, and by whom. They also introduced the issue ofbiosimilars, and why that market has not come to fruition.Dr. Edgar believed there is a great deal of misconception and lack of education about biosimilars, and many physicians stay away from it because they do not understand them. Panelist Kim Caldwell added: “Until the FDA will say that biosimilars are therapeutically substitutable for the products, they are nothing more than another branded product.”

When asked what they wanted to see changed in the next legislative cycle with respect to Medicare Advantage, Dr. Edgar named the structure of the financial benefit as a high priority, adding that it is “not sustainable where we are today.”

Mr. Caldwell said that his priority would be a broad change leading to rethinking of how patient assistance programs are used. He also said that he hopes to see pharmacies make a change that would help Medicare Party D by moving away from the distribution model so that they can start dispensing cognitive services and skills in addition to drugs.

Finally, Dr. McClellan re-emphasized the importance of the benefit redesign, as well as the area of integration, and his wish to move toward population-based payments.

Keynote K1. Medicare Part D: Past, Present, and Future. Presented at AMCP 2021; April 12-16, 2021.