Even with smaller ‘donut hole,’ Medicare cancer pill costs stay high

(Reuters Health) - Seniors insured by Medicare may still face high out-of-pocket costs for oral cancer medicines even after the government health program scales back a coverage gap known as the donut hole, a U.S. study suggests.

To assess how changes in the Medicare drug plan known as Part D might impact patients, researchers compared benefits available in 2010 to the coverage set to take effect in 2020 and estimated how out-of-pocket costs for cancer pills could change under different prescription pricing scenarios.

In 2010, the donut hole kicked in once drug spending reached $2,960 and required patients to shoulder 100 percent of costs out-of-pocket until their expenses reached $4,700. Starting in 2020, patients will only need to pay 25 percent of costs out-of-pocket when the donut hole takes effect, and drugs will be half off.

With these changes, many Medicare patients would save at least $2,550 for a course of cancer therapy. But that could still leave them with out-of-pocket costs of approximately $4,000 to $10,000 for their cancer pills, said study co-author Stacie Dusetzina, a researcher in pharmacy and public health at the University of North Carolina at Chapel Hill.

“While closing the donut hole is beneficial for many individuals who obtain prescription drugs through Medicare Part D, the benefit doesn’t work for people using high cost drugs, like oral anti-cancer therapies,” Dusetzina said by email.

In addition, the higher prices don’t necessarily equate to longer lives for cancer patients, Dusetzina added.

“Many of the orally-administered chemotherapies provide little benefit over existing therapies or have no improvements in overall survival,” Dusetzina said.

To see how coverage changes might influence out-of-pocket costs, Dusetzina and co-author Nancy Keating of Harvard Medical School and Brigham and Women’s Hospital in Boston analyzed 2014 Medicare data for stand-alone Part D plans as well as prescription coverage provided by private insurers through a program known as Medicare Advantage.

They looked at median out-of-pocket costs, meaning half of patients paid more and half less, for 23 oral cancer drugs. The analysis didn’t include subsidies for low-income patients.

In 2010, the median annual out-of-pocket costs for a typical treatment course ranged from $6,456 for the skin cancer pill dabrafenib (Tafinlar) to $12,160 for sunitinib (Sutent) to treat tumors in the kidney, pancreas and gastrointestinal tract.

With the assumption that prices remain stable, once the donut hole shrinks, patients may spend approximately $2,550 less, the researchers report in the Journal of Clinical Oncology.

One limitation of the study, the authors concede, is that they estimated use of only a single drug for each beneficiary, even though many patients take additional medications aside from cancer therapies. It’s also possible that benefits or factors influencing drug prices might change by 2020.

Prices, however, are unlikely to remain constant, said Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York.

“Price inflation is possible on oral cancer drugs because there is no downward pressure on price; instead there is mandatory formulary inclusion and thus mandatory payment at any rate,” Bach, who wasn’t involved in the study, said by email.

While some of the poorest patients may have lower or no out-of-pocket costs because of additional coverage or subsidies, it’s also possible that some patients who face larger out-of-pocket costs may stop taking their medicines, Bach said.

“There is little doubt that this leads to worse outcomes,” Bach said.

SOURCE: Journal of Clinical Oncology, online December 7, 2015.