Panel:
From Evidence to Policy on Prescription Drug Spending
(Health Policy)
*Names in bold indicate Presenter
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.
