CMS Finally Raises Part D Specialty Tier Threshold – But Not Much
This article was originally published in The Pink Sheet Daily
Executive Summary
Specialty tier threshold will be raised to $670 per month in 2017, CMS proposes in its draft call letter to Part D plans.
The Centers for Medicare and Medicaid Services proposes to increase the eligibility threshold for specialty tier drugs in Medicare Part D plans in 2017, a goal long sought by biopharma companies.
But the change may not make much of a difference in the number of drugs that plans may place on the specialty tier, where they can levy higher cost-sharing amounts and, manufacturers worry, reduce access.
In a draft Part D call letter for 2017, CMS said it would raise the threshold from negotiated drug prices that exceed $600 per month to those that exceed $670 monthly. The current $600 threshold was set in 2008, when it was increased from $500.
Manufacturers support higher thresholds, which translates into few drugs on the specialty tier, because higher cost sharing can mean reduced drug access and utilization. Part D plans generally require beneficiaries to pay coinsurance for specialty tier drugs that range from 25% to 33% of a drug’s cost. Beneficiaries are not permitted to request exceptions to specialty tier placement in Part D.
CMS says a review of 2015 claims data indicates a slight increase in the number of 30-day fills of specialty tier drugs that cost more than $600 and that finding, “coupled with the significant increase in the cost of Part D drugs since the last adjustment to the specialty tier threshold, supports an increase in the specialty tier threshold for [calendar year] 2017.”
As a result, “we propose applying the annual percentage increase used in the Part D benefit parameter updates to the existing $600 threshold. Thus, for CY 2017, the specialty tier cost threshold will be $670.”
CMS adds, “we may or may not increase the threshold on an annual basis moving forward. Annually, we will test the proposed increased threshold and continue to perform other analyses to assess whether threshold adjustments are necessary.”
The call letter, released Feb. 19, outlines requirements for health care plans that want to offer drug coverage or Medicare Advantage benefits for 2017. Public comments on the draft call letter are due March 4.