More than 1,750 Medicare Part D prescription drug plans applied for a voluntary model that aims to lower out-of-pocket insulin costs for older adults, CMS said Tuesday.
CMS announced the Part D Senior Savings Model in March, saying it would cap beneficiaries' insulin copays at $35 for each 30-day supply during the benefit year. Plan sponsors, including standalone Part D prescription drug plans and Medicare Advantage plans with prescription drug coverage, will offer supplementary insulin coverage for older adults with diabetes.
"CMS is enabling and encouraging Part D plans to offer fixed, predictable copays for beneficiaries rather than leaving seniors paying 25% of the drug's cost in the coverage gap," the agency said in a statement.
Applications for the program were due May 1 for the 2021 benefit year.
The model has broad support from the insurance industry because pharmaceutical companies will pay larger discounts under the demonstration, which would lower costs for plans. When CMS announced the model, the agency estimated it would save the federal government more than $250 million over five years.
"Companies already provide deep discounts and rebates on insulin — often in excess of the net revenues retained by the manufacturer — but Part D plans and PBMs are not sharing those savings directly with patients, whose out-of-pocket costs continue to soar," said Stephen J. Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America, a trade group representing drugmakers.
According to CMS Administrator Seema Verma, all insulin manufacturers and plans can take part in the demonstration. That could eventually include generic insulin makers thanks to a new regulatory pathway for biologic drugs that went into effect earlier this year.
Congress mandated the Food and Drug Administration to create a new regulatory pathway for biosimilars like insulin or human growth hormone in the Biologics Price Competition and Innovation Act of 2009. Policymakers think that more competition from generics could rein in drug costs in the long term.
The Trump administration announced the Part D Senior Savings model more than two months ago, just as the COVID-19 pandemic began to take shape in the United States. News of the outbreak and the administration's response overshadowed CMS' effort to reduce insulin costs for Medicare beneficiaries. It was supposed to be part of the administration's focus on consumer issues ahead of November's election.
Now that plans have applied for the program, the administration has a second chance to tout that it's lowering drug costs for seniors. The news should play well with President Donald Trump's political base, which is older and more likely to be enrolled in Medicare than the broader electorate.
