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Variability of COPD Inhaler Coverage in Medicare Part D

The American Journal of Managed CareMay 2021
Volume 27
Issue 5

Although most Medicare Part D plans cover guideline-recommended outpatient chronic obstructive pulmonary disease (COPD) inhalers, the utilization controls applied to these therapies vary by plan type.


Objectives: Stand-alone prescription drug plans (S-PDPs) and Medicare Advantage prescription drug (MA-PD) plans are incentivized to cover outpatient medications differently. This could affect the coverage of inhalers that prevent costly exacerbations of chronic obstructive pulmonary disease (COPD), with impacts for the Medicare program and its beneficiaries. This study compared the coverage of guideline-recommended COPD inhalers between S-PDPs and MA-PD plans.

Study Design: A cross-sectional analysis of the formularies for all 689 S-PDPs and 2578 MA-PD plans offered in 2017.

Methods: We assessed each prescription drug plan’s coverage of inhalers in 6 therapeutic categories recommended by the 2017 Global Initiative for Chronic Obstructive Lung Disease (GOLD) report and compared the use of prior authorization, step therapy, and coinsurance between S-PDPs and MA-PD plans.

Results: In 2017, all S-PDPs and MA-PD plans covered at least 1 inhaler from each GOLD therapeutic category, except for long-acting β agonist/long-acting muscarinic antagonist combination inhalers. S-PDPs were more likely to require coinsurance for inhalers across all therapeutic categories, whereas MA-PD plans required prior authorization more frequently for 3 of the 6 therapeutic categories. S-PDPs required coinsurance more frequently than MA-PD plans for inhalers that treat mild (20.8% vs 11.4%; P < .001), moderate (40.0 vs 13.2%; P < .001), and severe (45.4% vs 11.0%; P < .001) disease.

Conclusions: Medicare Part D S-PDPs are more likely than MA-PD plans to require coinsurance for outpatient COPD inhalers, especially for severe disease. This likely reflects their different financial incentives and is an important consideration for providers and policy makers aiming to improve outpatient COPD management.

Am J Manag Care. 2021;27(5):187-193. https://doi.org/10.37765/ajmc.2021.88632


Takeaway Points

Although almost all Medicare Part D plans covered guideline-recommended chronic obstructive pulmonary disease inhalers in 2017, the utilization controls that they used varied by plan type.

  • Medicare Advantage prescription drug (MA-PD) plans cover both prescription drugs and medical services, whereas stand-alone prescription drug plans (S-PDPs) provide only prescription drug coverage.
  • S-PDPs required coinsurance more frequently than MA-PD plans for all guideline-recommended therapeutic categories, whereas MA-PD plans required prior authorizations more frequently.
  • These formulary designs likely reflect the different financial incentives of Medicare Part D plans and could adversely affect the medication adherence of S-PDP beneficiaries and Medicare spending.


Three-fourths of Medicare beneficiaries obtain prescription drug coverage through the Medicare Part D Program.1 The program consists of stand-alone prescription drug plans (S-PDPs) and Medicare Advantage prescription drug (MA-PD) plans. S-PDPs are privately operated plans offered to beneficiaries who are enrolled in fee-for-service Medicare. MA-PD plans provide coverage for beneficiaries who are enrolled in MA health plans. In MA-PD plans, the insurer that offers prescription drug coverage also covers medical services, whereas in S-PDPs the prescription drug coverage is separate from medical coverage. As a result, MA-PD plans are responsible for the full range of medical costs that result from their drug cost containment strategy, whereas S-PDPs are not.

Previous studies have investigated whether these differing responsibilities affect the prescription drug coverage offered by plans.2-4 The concern is that S-PDPs are incentivized to offer more restrictive formularies than MA-PD plans. A plan’s formulary can be restricted by limiting the number of drugs covered, requiring prior authorization or step therapy for a drug, and charging higher cost sharing through the use of co-pays (patient pays a fixed cost per prescription) or coinsurance (patient pays a percentage of the medication’s list price). These strategies encourage the use of certain drugs over others, but they also impose barriers that limit a patient’s access to drugs, potentially reducing their medication adherence.5-12

Huskamp et al evaluated the Medicare Part D formulary coverage of drugs for 6 common chronic diseases in the Medicare population.2 They found that for brand-name drugs with a generic alternative, MA-PD plans, on average, were more likely than S-PDPs to cover the drugs, were less likely to require prior authorization or step therapy, and charged a lower co-pay. These differences did not typically persist, however, when they evaluated only branded drugs without a generic equivalent.

The Medicare Part D coverage of branded drugs without generic equivalents is particularly relevant for chronic obstructive pulmonary disease (COPD). COPD accounts for about $20 billion of Medicare spending per year.13 As much as 70% of this spending is for COPD exacerbations, which frequently require hospitalization or an emergency department visit.14-16 One of the most effective methods for preventing COPD exacerbations is outpatient inhalers,17-19 which require good adherence to reduce the frequency and severity of exacerbations.20-24

There are evidence-based guidelines directing the outpatient management of COPD.25,26 These guidelines recommend the use of daily maintenance inhalers for chronic disease management and the use of short-acting rescue inhalers for intermittent symptom control. A stepwise increase in therapy is recommended as the severity of a patient’s COPD worsens.25 Prior to 2019, all maintenance inhalers were branded drugs without generic equivalents.27

In 2015, Tseng et al found that MA-PD plans covered maintenance inhalers more frequently than S-PDPs but that MA-PD plans required higher cost sharing for a majority of inhalers.4 This finding differed from those of Huskamp et al and aligned with findings from an evaluation of Medicare Part D plan coverage of disease-modifying antirheumatic drugs.3 However, Tseng et al calculated the cost-share attributable to coinsurance using the plan’s published price, which does not account for rebates, instead of the list price. This likely underestimated the effect of coinsurance and makes the comparison challenging to interpret.

The ability of maintenance inhalers to prevent expensive COPD exacerbations means that Medicare spending is lower when inhalers are covered and beneficiaries use them.This important question requires further analysis. In this study, we examine the coverage of guideline-recommended inhalers for COPD and barriers to accessing them in the Medicare Part D program, comparing between S-PDPs and MA-PD plans and across different severities of the disease.


Drugs of Interest: Defining the Study Cohort

Inhalers used for the management of COPD were identified using the 2017 Global Initiative for Chronic Obstructive Lung Disease (GOLD) guidelines.28 The FDA National Drug Code Directory provided unique identification codes (National Drug Codes [NDCs]) for all commercially available preparations of all inhalers listed in the GOLD guidelines.29 Each NDC uniquely identifies a product according to its active ingredient, dosage form, strength, labeler, and packaging.

Inhalers were grouped into 6 therapeutic categories by mechanism of action according to the GOLD guidelines: (1) short-acting bronchodilators, (2) long-acting β agonists (LABAs), (3) long-acting muscarinic antagonists (LAMAs), (4) LABA/LAMA combinations, (5) LABA/inhaled corticosteroid (ICS) combinations, and (6) ICS-only inhalers. One additional drug class (LABA/LAMA/ICS combinations) was not included in our analysis because it contained a single product that was approved in late 2017.30

Inhalers were also grouped according to the severity of the disease that they were recommended to treat based on the GOLD disease classification.28 Short-acting bronchodilators were classified as mild disease therapies (recommended for GOLD Group A disease). LABA and LAMA inhalers were classified as moderate disease therapies (recommended for GOLD Groups B and C disease). LABA/ICS combination and ICS-only inhalers were classified as severe disease therapies (recommended for GOLD Group D disease). All inhalers in the sample, with the exception of short-acting inhalers, were brand-name medications in 2017. Two independent adult pulmonologists with COPD expertise independently reviewed the list of drugs and the therapeutic classifications to confirm completeness and accuracy.

Data Sources and Variable Extraction

The Medicare Part D November 2016 Prescription Drug Plan Formulary, Pharmacy Network, and Pricing Information Files provide information on the plans and drug formularies offered by all S-PDPs and MA-PD plans operating in 2017. This database was used to extract all characteristics of the drugs of interest, identified by their NDCs. Plan enrollment information was obtained from the CMS Medicare Advantage/Part D Contract and Enrollment Data for the month of November 2016.31

The Medicare Prescription Drug Plan Formulary, Pharmacy Network, and Pricing Information Files were used to identify which drugs were covered by each plan, whether or not the drug had a prior authorization or step therapy requirement, and the cost-sharing burden associated with each drug.32 Patient cost-sharing burden was assessed in 3 ways. First, the lowest cost-sharing tier in which plans offered an inhaler from each therapeutic category was identified. Higher tiers are typically more financially burdensome to patients.33 Second, the frequency of coinsurance for products in the same therapeutic category was calculated. Third, the therapeutic categories were grouped by the severity of disease that they are recommended to treat, and the frequency of coinsurance for inhalers in the same disease severity was calculated. Patient-level data were not evaluated.

Coinsurance requirements were assumed to be more burdensome for patients than fixed co-payments because coinsurance amounts vary depending on the price of the inhaler. All cost-sharing information was obtained assuming a 30-day supply of the inhaler at the plan’s preferred pharmacies. Medicare Part D plans typically distinguish between preferred and nonpreferred pharmacies and offer lower cost sharing at the preferred pharmacies. For plans without cost-sharing information for preferred pharmacies, nonpreferred pharmacy cost-sharing data were used instead. Plans with missing cost-sharing information for both preferred and nonpreferred pharmacies were excluded from the cost-sharing analysis. The Medicare cost-sharing structure has different rates depending on how much the specific beneficiary has spent on drugs, beginning with the deductible period, then the coverage period, gap period (“donut hole”), and catastrophic period. For consistency, cost-sharing information was collected in the initial coverage period for all plans.

Statistical Analysis

Descriptive analyses were conducted separately for each of the 6 COPD inhaler therapeutic categories in terms of frequency of prior authorization and step therapy requirements, minimum cost-sharing tier, and frequency of coinsurance requirement. The characteristics were then compared between S-PDPs and MA-PD plans using χ2 tests for categorical variables and unpaired 2-tailed t tests for continuous variables. The characteristics were also compared by the 3 disease severity groups (mild, moderate, and severe) using simple linear regression models. A sensitivity analysis to test for the robustness of the results was performed by excluding plans that did not provide cost-sharing information for preferred pharmacies from the cost-sharing analyses. All statistical analyses were implemented using Stata statistical package version 15 (StataCorp). This project was approved by the internal review board at Johns Hopkins Bloomberg School of Public Health.


Coverage Overview

A total of 689 S-PDPs and 2578 MA-PD plans were offered to Medicare Part D beneficiaries in 2017. These plans covered 30.6 million Medicare beneficiaries, with 59% of enrollees covered by S-PDPs and 41% covered by MA-PD plans. A total of 117 (17.0%) S-PDPs and 1375 (53.3%) MA-PD plans did not provide cost-sharing information for preferred pharmacies and in this case, nonpreferred pharmacy cost-sharing information was used.34 Finally, 29 (1.1%) MA-PD plans provided no cost-sharing data and were therefore excluded from the cost-sharing analysis.

Part D plans, in aggregate, covered 70 different inhalers with 25 unique active ingredients or combinations of active ingredients in 2017 (Table 1). All S-PDPs and MA-PD plans covered at least 1 drug in each of the 6 therapeutic categories, except for LAMA/LABA combination inhalers: 6% of S-PDPs and 3% of MA-PD plans did not cover any drugs in this therapeutic category. All plans did cover at least 1 LAMA-only and at least 1 LABA-only inhaler. S-PDPS offered fewer short-acting (10.8 vs 13.0; P < .001), LAMA (3.3 vs 3.9; P < .001), LABA/ICS combination (9.3 vs 10.3; P < .001), and ICS-only (13.2 vs 14.5; P < .001) inhalers on average compared with MA-PD plans.

Utilization Controls: Frequency of Prior Authorization and Step Therapy

S-PDPs applied prior authorization less frequently than MA-PD plans for LABA (30.6% vs 35.9%; P < .001), LABA/LAMA (0% vs 1.1%; P = .005), and LABA/ICS (1.8% vs 3.1%; P < .001) inhalers (Table 2). S-PDPs applied prior authorization more frequently than MA-PD plans for ICS-only inhalers (22.2% vs 20.8%; P < .001). There was no statistically significant difference between S-PDPs and MA-PD plans in frequency of use of prior authorization for short-acting and LAMA inhalers. Both types of plans applied step therapy to less than 4% of inhalers per plan for all therapeutic categories, although MA-PD plans required step therapy more frequently than S-PDPs for short-acting (1.6% vs 0.3%; P < .001) and LABA/ICS (3.3% vs 1.6%; P < .001) inhalers.

Patient Cost Sharing: Tier Placement and Frequency of Coinsurance

The minimum tier of coverage for short-acting inhalers was either tier 1 or tier 2 for all S-PDPs and MA-PD plans (Table 3). MA-PD plans were more likely to use tier 1 compared with S-PDPs (45.8% vs 35.6%; P < .001). The most common minimum tier of coverage for all other therapeutic categories in both S-PDPs and MA-PD plans was tier 3. Similar to short-acting inhalers, S-PDPs were less likely to offer these inhalers in either tier 1 or tier 2 compared with MA-PD plans for all therapeutic categories (P < .001), as demonstrated in Table 3. Tier 4 was the minimum tier in 4 (0.6%) S-PDPs and 63 (2.4%) MA-PD plans for LABA inhalers and 145 (5.8%) MA-PD plans for LABA/LAMA combination inhalers.

On average, S-PDPs required coinsurance for a greater proportion of inhalers per plan than MA-PD plans for all 6 therapeutic categories (Table 4). LABA/LAMA combination inhalers had the narrowest difference (20.8% vs 10.5%; P < .001) and ICS-only inhalers had the widest difference (55.2% vs 11.1%; P < .001). A total of 3.8% of S-PDPs offered no short-acting inhaler without coinsurance compared with 8.7% of MA-PD plans (P < .001). For all other therapeutic categories, a greater proportion of S-PDPs required coinsurance for all inhalers in a therapeutic category compared with MA-PD plans. LABA/LAMA combination inhalers (18.1% vs 10.4%; P < .001) and ICS-only inhalers (21.9% vs 9.0%; P < .001) again represented the extremes of the difference. The mean coinsurance percentage for S-PDPs was also significantly higher across therapeutic categories compared with MA-PD plans (P < .001), as demonstrated in Table 4. In the sensitivity analysis, the exclusion of plans that did not provide cost-sharing information for preferred pharmacies did not change the results.

Coverage by Severity of COPD

S-PDPs placed inhalers in higher cost-sharing tiers than MA-PD plans for all disease severities (P < .001) (Table 5). S-PDPs subsequently required coinsurance for a higher proportion of inhalers per plan compared with MA-PD plans for mild (20.8% vs 11.4%; P < .001), moderate (40.0% vs 13.2%; P < .001), and severe (45.4% vs 11.0%; P < .001) disease therapies. In addition, the proportion of inhalers per plan that required coinsurance continued to rise with increasing COPD severity in S-PDPs but not among MA-PD plans.


This study examined Medicare Part D coverage of guideline-recommended COPD inhalers. It expanded previous investigations2-4 by identifying key differences in how S-PDPs and MA-PD plans constrained access to branded inhalers and potentially affected patient medication adherence. This information is important to providers and policy makers who are interested in assuring high levels of adherence to medications in the Medicare program.

This study had 3 main findings. First, we found that S-PDPs covered fewer inhalers per therapeutic category, on average, than MA-PD plans. This difference likely means that S-PDPs offer less choice to their beneficiaries and aligns with previous findings. This is a problem for patients who must switch between inhalers if they fail to clinically respond to one product or prefer another.35

Second, we found that S-PDPs required coinsurance more frequently than did MA-PD plans for all therapeutic categories. In some therapeutic categories, up to a quarter of S-PDPs offered no inhalers without coinsurance. This is important because the percent coinsurance of brand-name inhalers is likely to impose greater cost sharing than a fixed co-pay. This effect was likely underestimated in the study by Tseng et al.4 Increased cost sharing has been shown to decrease adherence to inhalers, with studies estimating that a 10% increase in patient out-of-pocket costs is associated with an average of 2% to 6% lower adherence, and a $10 increase in patient out-of-pocket cost is associated with 3.8% lower adherence, on average.5,6,10 A survey of Medicare beneficiaries found that 7% of Medicare Part D beneficiaries reported poor medication adherence due to cost.36

Third, we found that MA-PD plans required prior authorizations for inhalers more frequently than S-PDPs, especially for short-acting, LABA, and ICS-only inhalers. Prior authorization is a mechanism used to control demand, but whereas higher cost sharing places a financial burden on patients, prior authorization places a time burden on providers.

The incentives associated with the design of S-PDPs and MA-PD plans may have contributed to the differences that we identified. S-PDPs focus only on prescription drug spending, whereas MA-PD plans are concerned about the total cost of care. Therefore, it is not surprising that S-PDPs tend to control the demand for COPD inhalers by requiring higher patient cost sharing, which reduces the likelihood that patients will adhere to the inhalers they need. MA-PD plans, on the other hand, were more likely to implement prior authorization as a demand control mechanism, placing the burden on providers but not increasing the financial burden to patients.

Notably, the differences between S-PDPs and MA-PD plans expanded as the severity of a patient’s COPD worsened. The proportion of inhalers per plan that required coinsurance increased in both S-PDPs and MA-PD plans as inhalers’ therapeutic category advanced from mild to moderate disease, but only S-PDPs increased the proportion further when inhalers’ therapeutic category advanced from moderate to severe disease.


This study had 5 main limitations. First, we do not have access to patient-level data and cannot describe how Medicare beneficiaries with COPD are distributed across plans. Although many plans are regional and a beneficiary’s choice could be limited by their location, it is also possible that beneficiaries with COPD are more likely to seek out plans with good coverage and lower barriers to COPD inhalers. We also do not know the distribution of patients with mild, moderate, and severe disease. Future analyses examining patient-level data are warranted. To ensure comparability, future analyses of patient-level data should consider methodologies such as propensity score matching to compare similar patients in the 2 groups. Second, our analysis does not include utilization data and does not consider other coverage phases beyond initial coverage. We focused only on cost sharing in the initial coverage period because the deductible and donut hole periods do not provide coverage for COPD inhalers. Further investigations that use utilization data across coverage periods to identify the out-of-pocket costs according to plan type would help clarify these relationships. Third, our analysis does not account for the possibility that patients may use multiple inhalers simultaneously; for example, a patient who takes a LAMA/LABA inhaler could also take a LAMA inhaler and a LABA inhaler together. However, the patterns that we found were consistent across most therapeutic classes, so patients are likely to face the same barriers regardless of which specific product combinations they choose. Fourth, our analysis did not account for the summative effect across multiple barriers to use, such as cost sharing in conjunction with prior authorization or step therapy. Our interpretation is therefore limited in its ability to identify a plan’s most preferred inhaler, or the one with the fewest barriers to access, in each therapeutic category. Finally, these data predate the introduction of generic fluticasone/salmeterol in 2019.27 Although generic competition has been shown to reduce costs, resultant shifts in the market and any potential formulary-setting behavior that might have resulted would have affected only 1 of the 6 therapeutic categories examined in this study (LABA/ICS inhalers).


This study provides an important evaluation of the formulary coverage of guideline-recommended COPD medications in the Medicare Part D program. It used comprehensive information on all S-PDPs and MA-PD plans offered nationwide and demonstrated significant differences in formulary design between plans that are solely responsible for the pharmacy costs compared with plans that are also financially liable for the medical costs that might result from poor medication adherence. These findings suggest that patients and providers should carefully assess their needs for inhalers before selecting a plan. Congress should consider the effect that different incentive systems for the S-PDPs and MA-PD plans have on patient adherence, because the Medicare program is responsible for the medical costs in fee-for-service Medicare. Although our study focuses on COPD, the same financial incentives likely affect other diseases. Currently, the Medicare program requires that S-PDPs or MA-PD plans cover at least 1 drug option in each therapeutic category. The Medicare program should add minimum affordability requirements for the drugs offered by the Part D plans.


The authors would like to thank Dr Robert A. Wise and Dr Jeffrey Barry for their review of the guideline-recommended COPD inhalers for inclusion in the data set.

Author Affiliations: Department of Pediatrics, Johns Hopkins University School of Medicine (BW), Baltimore, MD; Department of Health Policy and Management, Johns Hopkins University Bloomberg School of Public Health (MPS, GA), Baltimore, MD.

Source of Funding: This research is generously funded by a grant from Arnold Ventures, which did not have any role in the design or analysis of the study. Dr Wormser is supported by Health Resources and Services Administration grant 6T32HP10025.

Prior Presentation: Partial findings from this research were presented as a poster presentation at the AcademyHealth Health Policy Conference, February 10, 2020.

Author Disclosures: The authors received an Arnold Ventures grant for this research, which was paid to the Johns Hopkins School of Public Health.

Authorship Information: Concept and design (BW, MPS, GA); analysis and interpretation of data (BW, MPS, GA); drafting of the manuscript (BW, MPS, GA); critical revision of the manuscript for important intellectual content (BW, MPS, GA); statistical analysis (BW, MPS); obtaining funding (GA); and supervision (GA).

Address Correspondence to: Benjamin Wormser, MD, Johns Hopkins University School of Medicine, 200 N Wolfe St, Ste 2088, Baltimore, MD 21287. Email: ben.wormser@jhmi.edu.


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