Panel: From Evidence to Policy on Prescription Drug Spending
(Health Policy)

Thursday, November 8, 2018: 8:30 AM-10:00 AM
Wilson C - Mezz Level (Marriott Wardman Park)

*Names in bold indicate Presenter

Panel Chairs:  Jonathan Blum, Independent Consultant
Discussants:  Alexandra Golden, House Committee on Oversight and Government Reform

Understanding and Addressing High Spending in Part D Catastrophic Coverage
Aditi P. Sen, Sonal Parasrampuria and Gerard Anderson, Johns Hopkins University

Capping out-of-Pocket Spending in Medicare Part D
Erin E Trish1, Jianhui Xu2 and Geoffrey Joyce2, (1)University of Southern California, (2)Schaeffer Center for Health Policy and Economics

Formulary Options to Control Drug Prices in Medicare Part D
Mariana Socal, Farah Yehia and Gerard Anderson, Johns Hopkins University

Estimating Biosimilar Cost Savings in the United States
Andrew Mulcahy and Jakub Hlavka, RAND Corporation

There is widespread concern about the rising price of prescription drugs. High drug prices restrict consumer access to medications necessary for health and threaten the sustainability of publicly-funded programs such as Medicare. 

In this panel, we explore several topics related to prescription drug affordability and implications for improving policy in this area. The first three papers focus on policy approaches to improve access among Medicare Part D beneficiaries. In the first paper, the authors assess the challenge of rising spending in the catastrophic benefit phase of Part D. The growth in catastrophic coverage spending, driven largely by spending on high-priced specialty drugs, threatens beneficiary access to necessary medications as well as the financial sustainability of Medicare. Understanding the drugs driving spending as well as the types of beneficiaries who are in catastrophic coverage and their experiences are fundamental to improving policy in this area. The second paper builds on this foundation to explore several policy approaches to address the financial burden of high drug prices in Part D. Specifically, the authors evaluate the impact of implementing an out-of-pocket cap in Part D to provide financial protection for beneficiaries. In the third paper, the authors study formulary options to control drug prices in Part D. While opponents of policy approaches such as a unified formulary argue that such an approach would restrict drug choice and access, the authors find evidence of significant coverage overlap across Part D plans suggesting that Part D beneficiaries already have somewhat limited coverage options. The authors suggest policy approaches that may enhance Medicare’s ability to obtain lower prices, including negotiation for certain high-cost drugs. Finally, in the fourth paper, the authors estimate potential future savings from biosimilars in the United States. These savings – over $50 billion over 10 years – have important implications for formularies and costs in Part D as well as in commercial insurance. 

Given rising drug costs and the associated burden on consumers and payers, it is increasingly important to understand the drivers of high drug costs as well as the range of possible policy approaches to reducing this burden. The findings from the four papers in this panel are highly relevant to policy debates on this topic and have the potential to inform the design of prescription drug policy going forward. The panel includes a discussant from the U.S. House Government Oversight Committee Staff and a chair who was formerly the director of Medicare at the Centers for Medicare and Medicaid Services. These policymakers will offer comments in the translation of research and evidence into informed policy.

See more of: Health Policy
See more of: Panel