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The American Journal of Managed Care Special Issue: HCV
Real-World Outcomes of Ledipasvir/Sofosbuvir in Treatment-Naïve Patients With Hepatitis C
Zobair M. Younossi, MD, MPH, FACG, AGAF, FAASLD; Haesuk Park, PhD; Stuart C. Gordon, MD; John R. Ferguson; Aijaz Ahmed, MD; Douglas Dieterich, MD; and Sammy Saab, MD, MPH
Sofosbuvir Initial Therapy Abandonment and Manufacturer Coupons in a Commercially Insured Population
Taruja D. Karmarkar, MHS; Catherine I. Starner, PharmD; Yang Qiu, MS; Kirsten Tiberg, RPh; and Patrick P. Gleason, PharmD
Improving HCV Cure Rates in HIV-Coinfected Patients - A Real-World Perspective
Seetha Lakshmi, MD; Maria Alcaide, MD; Ana M. Palacio, MD, MPH; Mohammed Shaikhomer, MD; Abigail L. Alexander, MS; Genevieve Gill-Wiehl, BA; Aman Pandey, BS; Kunal Patel, BS; Dushyantha Jayaweera, MD; and Maria Del Pilar Hernandez, MD
Does Patient Cost Sharing for HCV Drugs Make Sense?
Darius N. Lakdawalla, PhD; Mark T. Linthicum, MPP; and Jacqueline Vanderpuye-Orgle, PhD
A Way Out of the Dismal Arithmetic of Hepatitis C Treatment
Jay Bhattacharya, MD, PhD, Center for Primary Care and Outcomes Research, Stanford University School of Medicine; Guest Editor-in-Chief for the HCV special issue of The American Journal of Managed
Value of Expanding HCV Screening and Treatment Policies in the United States
Mark T. Linthicum, MPP; Yuri Sanchez Gonzalez, PhD; Karen Mulligan, PhD; Gigi A. Moreno, PhD; David Dreyfus, DBA; Timothy Juday, PhD; Steven E. Marx, PharmD; Darius N. Lakdawalla, PhD; Brian R. Edlin, MD; and Ron Brookmeyer, PhD
The Wider Public Health Value of HCV Treatment Accrued by Liver Transplant Recipients
Anupam B. Jena, MD, PhD; Warren Stevens, PhD; Yuri Sanchez Gonzalez, PhD; Steven E. Marx, PharmD; Timothy Juday, PhD; Darius N. Lakdawalla, PhD; and Tomas J. Philipson, PhD
Costs and Spillover Effects of Private Insurers' Coverage of Hepatitis C Treatment
Gigi A. Moreno, PhD; Karen Mulligan, PhD; Caroline Huber, MPH; Mark T. Linthicum, MPP; David Dreyfus, DBA; Timothy Juday, PhD; Steven E. Marx, PharmD; Yuri Sanchez Gonzalez, PhD; Ron Brookmeyer, PhD; and Darius N. Lakdawalla, PhD
Currently Reading
Coverage for Hepatitis C Drugs in Medicare Part D
Jeah Kyoungrae Jung, PhD; Roger Feldman, PhD; Chelim Cheong, PhD; Ping Du, MD, PhD; and Douglas Leslie, PhD

Coverage for Hepatitis C Drugs in Medicare Part D

Jeah Kyoungrae Jung, PhD; Roger Feldman, PhD; Chelim Cheong, PhD; Ping Du, MD, PhD; and Douglas Leslie, PhD
This study analyzes the current coverage designs for hepatitis C virus drugs by Medicare Part D plans.
Medicare Part D Benefits
Medicare Part D provides outpatient prescription drug coverage to the elderly and disabled. It is delivered through private plans, including standalone prescription drug plans (PDPs) or Medicare Advantage plans with prescription drug coverage (MA-PDs). Medicare specifies a standard Part D benefit package, but plans can modify the benefits as long as their schemes are equal in value to the standard package.
The standard benefit has 3 phases: initial coverage, coverage gap, and catastrophic coverage. Initial coverage includes an annual deductible ($320 in 2015) followed by 25% coinsurance. After total drug spending of $2960 (in 2015), beneficiaries enter the coverage gap, where they are responsible for 45% of the spending on brand name drugs and 65% of spending on generic drugs, with in-gap discounts specified by the Affordable Care Act. Catastrophic coverage kicks in when patient OOP spending reaches $4700 (total spending of $6680); beneficiaries pay 5% of drug spending above the catastrophic threshold.
Most Part D plans have developed their own schemes, particularly in initial coverage, and use multi-tiered formularies with low cost sharing for preferred drugs and high cost sharing for nonpreferred drugs.13 Part D plans can place drugs with monthly spending over $600 in a separate “specialty” tier and charge higher cost sharing than other tiers. The prices of most HCV drugs are high enough to be placed in a specialty tier.
Cost-sharing subsidies are available for Medicare Part D beneficiaries who are dually eligible for Medicaid (dual eligibles) and/or have low incomes.14 Noninstitutionalized dual eligibles with incomes ≤100% of the federal poverty line (FPL) had 2015 co-payments of $1.20 for generics and $3.60 for brand name drugs; those with incomes >100% FPL had 2015 co-payments of $2.65 for generics and $6.60 for brand name drugs. Other individuals with incomes ≤135% FPL and limited resources paid $2.65 for generics and $6.60 for brand name drugs. Neither the deductible nor coverage gap was applied to these 2 groups. People with incomes <150% FPL had a $66 deductible followed by 15% coinsurance until OOP spending reached $4700; after that, they paid $2.65 and $6.60 co-payments for generic and brand name drugs, respectively.
A large share of patients with HCV in Medicare qualify for these low-income subsidies, which help mitigate financial difficulties.15 However, patients with no subsidy bear significant financial burdens for expensive HCV drugs. Although they reach catastrophic coverage with the first few pills, high prices of HCV drugs can result in sizable OOP spending even with only 5% coinsurance.
The primary data source was the July 2015 Prescription Drug Plan Formulary and Pharmacy Network Files from CMS, which contains information on plan characteristics and benefits for drugs covered by each Part D plan. We excluded special needs plans (n = 540) because they serve certain specific beneficiaries (eg, institutionalized people) and may have special benefit schemes. After this exclusion, we identified 1635 Medicare Advantage prescription drug plans (MAPDs) and 1013 PDPs.
We examined formulary and cost-sharing structures used by MAPDs and PDPs for the HCV drugs shown in Table 1. We analyzed the percentages of plans covering each drug, applying prior authorization/quantity limits to the drug and placing the drug in a specialty tier. We then examined the type and amount of cost sharing for the drug. Because several peginterferon and ribavirin products are available, we used cost sharing of the product covered by most plans. At the time of the study, Victrelis and Incivek were discontinued and no Part D plan listed Incivek in its formulary. We used the December 2013 formularies to compare benefit coverage of these first DAAs and newer HCV drugs.
We measured price by the wholesale acquisition cost (WAC) for a 4-week supply of each drug from the Wolters Kluwer Health Medi-Span Electronic Drug File (MED-File) v.2 (2015).16 WAC is the manufacturer’s list price to wholesalers before any discounts or rebates. It approximates what pharmacies pay wholesalers for brand name drugs17 and captures payments by both plans and enrollees. Based on this price, we calculated total spending on a single drug therapy and on a combination of drugs. We collected information on drug usage (such as combined drug therapies) and expected therapy duration from the drug package inserts and the guidelines from the American Association for the Study of Liver Diseases (AASLD).18 We then estimated annual OOP spending needed for enrollees in a plan to complete a course of treatment. We used the plan’s cost sharing for the drug in each benefit phase (initial coverage, coverage gap, and catastrophic coverage) in 2015.

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