Coverage for High-Cost Specialty Drugs for Rheumatoid Arthritis in Medicare Part D

Management of many chronic conditions has improved dramatically in the last decade with the advent of novel specialty drugs, which are often both life-changing and costly. This is particularly true for rheumatoid arthritis (RA), a condition affecting 1.3 million people in the United States (1). Prior to the late 1990s, RA was among the most debilitating chronic conditions, with one in three patients permanently disabled within five years (2, 3). In 2014, disease control is possible for many patients with early and aggressive treatment using disease modifying anti-rheumatic drugs (DMARDs), now standard components of guideline-based care (4, 5). However, newer biologic DMARDs can cost over $20,000 annually, and even with insurance, many patients who require them after failing first-line drugs for disease control will face a significant financial burden for treatment (6–9). A national survey of 1,100 adults with RA found that 1 in 6 decreased medication use due to cost, potentially resulting in worse outcomes (10). Because biologic DMARDs are both efficacious and expensive, understanding how to cover and pay for them is an important policy issue. Since RA affects 2.3% of older persons and over 1 in 4 Medicare beneficiaries with RA receive biologic DMARDs, Medicare spending in this area is large, exceeding a billion dollars in 2009 (11, 12). Insurance coverage for biologic DMARDs by Medicare has grown increasingly complex. Biologic DMARDs were historically covered only under Medicare’s medical insurance (Part B) as physician-administered drugs. With the introduction of the Part D pharmacy benefit in 2006, coverage was significantly expanded to include self-administered biologic DMARDs dispensed through a pharmacy. Despite the projected growth in Medicare spending on biologic DMARDs in Part D, no studies have systematically examined how Part D plans nationwide cover biologic DMARDs or the financial implications of current coverage policies. To address this gap, we conducted a nationwide examination of 2013 Part D plans’ coverage of biologic and non-biological DMARDs. We investigate the level of cost sharing for patients and also analyze how Medicare Advantage versus stand-alone drug plans structure cost sharing by using prior authorizations (PA), specialty tiers, and coinsurance versus fixed dollar copayments. Our findings shed light on how Part D currently provides coverage for biologic DMARDs and the potential impact of Part D changes included in the Affordable Care Act.