Medicare Part D and Cost-Sharing for Antiretroviral Therapy and Preexposure Prophylaxis

IMPORTANCE The 2019 federal Ending the HIV Epidemic initiative requires a vast expansion of access to antiretroviral therapy (ART) and preexposure prophylaxis (PrEP) for HIV treatment and prevention. However, high prices for ART and PrEP can reduce their affordability and use. Medicare covers 1 in 4 persons living with HIV, and the Medicare Part D drug benefit imposes complicated cost-sharing between patients and other stakeholders. OBJECTIVE To determine how the Medicare Part D design distributes the cost burden for ART and PrEP between patients, insurance plans, manufacturers, and Medicare. DESIGN AND SETTING Nationwide cross-sectional analyses of first quarter 2019 Medicare formulary and pricing files for 3326 Part D plans were performed. These files contain drug benefit data, including prices and cost-sharing requirements. MAIN OUTCOMES AND MEASURES For 18 ART and 2 PrEP regimens, the out-of-pocket costs for patients and the cost borne by plans, manufacturers, and Medicare were projected for 1 year of treatment or prevention under a 2019 standard Medicare Part D insurance plan. Analyses assumed that patients used the ART or PrEP regimen and no other medications. RESULTS In 2019, ART prices ranged from $24010 to $46770 annually (median price, $35780), with patients projected to pay 9% to 14% of the cost ($3270-$4350), insurance plans 18% to 24%


Introduction
2][3] The 2019 federal Ending the HIV Epidemic initiative seeks a 75% reduction in new HIV infections by 2025 and a 90% reduction by 2030. 4 The program's success requires a rapid and substantial increase in the use of ARVs.Suppressive ARV therapy (ART) for persons with HIV is associated with undetectable virus levels, thus preventing transmission to others, and preexposure prophylaxis (PrEP) for persons at risk for HIV may be associated with a more than 90% lower risk of infection. 5][8][9][10][11] Furthermore, ARV prices continue to increase steadily, 7,[12][13][14] with a 34% price increase between 2012 and 2018. 7High ARV prices also affect taxpayers.Historically, many people with HIV relied on Medicaid (federally or state-subsidized health coverage for lower-income persons) owing to disabilities from HIV prior to the availability of effective ART. 15 15 Most Medicare beneficiaries with HIV qualify for coverage on disability alone (79% in 2014).However, an increasing number of individuals with HIV enter Medicare by reaching 65 years or older (13% in 2014) because ART enables people with HIV to live longer and age in a healthy manner. 15 this study, we examined cost-sharing for ART and PrEP under Medicare Part D, the drug benefit that covers 70% of Medicare beneficiaries. 16Medicare beneficiaries with HIV are even more likely to have Part D coverage because dually eligible individuals (Medicare and Medicaid) automatically receive Part D benefits. 15,16By federal mandate, Part D must cover all ARVs as 1 of 6 specially protected drug classes. 16However, as designed, Part D also imposes cost-sharing among patients, insurers, manufacturers, and Medicare that varies throughout the year. 16Studies for other conditions, such as cancer and rheumatoid arthritis, have shown that Part D enrollees can face substantial out-of-pocket costs for expensive drugs even when these drugs are covered by Part D. 17,18 Patients must pay an initial deductible, followed by a coverage phase (insurance plans pay most of the cost, but patient cost-sharing is required), then a coverage gap (costs are shared between the patient, the insurance plan, and the manufacturer), and finally a catastrophic coverage phase (Medicare pays 80% of the cost, with the remainder shared by the insurance plan and the patient). 16r individuals with qualifying low income and assets and for dually eligible enrollees, Medicare provides a full or partial low-income subsidy (LIS) that covers all or part of the out-of-pocket costs. 16 2014, 77% of Medicare beneficiaries with HIV received an LIS. 15 This complicated Part D cost-sharing structure obscures who carries the cost burden for highpriced ART and PrEP.However, the way in which Part D distributes the high cost of ART and PrEP to its enrollees and to taxpayers may affect how much patients and society pay to prevent or control HIV.We analyzed how cost is shared between patients, insurance plans, manufacturers, and Medicare for 1 year of ART or PrEP, and how this cost-sharing would differ for patients qualifying for full taxpayer subsidies.

Methods
We analyzed the first quarter 2019 Medicare formulary and pricing files for 3326 Part D insurance plans nationwide. 19 coinsurance cost-sharing on a drug's full list price, which excludes rebates and discounts to plans. 21r each monthly prescription, we prorated the proportion of drug price falling into each Part D phase and calculated cost-sharing accordingly.We also considered a full LIS scenario, in which Medicare absorbs virtually all of a patient's out-of-pocket costs for ART and PrEP throughout the year. 22alyses were based on patients using the specific ART or PrEP regimen and no other drugs.We used simple descriptive statistics to present mean monthly prices and out-of-pocket cost requirements across all plans, rounded to the nearest $10.
During the coverage phase, insurance plans almost universally structured patient cost-sharing as a coinsurance (ie, a percentage of a drug's list price [range, 28.1%-30.8%]rather than charging a fixed dollar copayment).This cost-sharing structure parallels the coinsurance required in the coverage gap (25%) and catastrophic (5%) phases.For ART, the monthly out-of-pocket costs after the deductible were high in the coverage phase (mean (3) coverage gap: starts at $3820 in total drug cost, brand-name drug cost is shared between the patient (25%), manufacturer (70%), and insurance plan (5%), and generic drug cost (lamivudine and abacavir-lamivudine) is shared between the patient (37%) and insurance plan (63%); and (4) catastrophic coverage: starts at $5100 in out-of-pocket costs (including manufacturer contribution during the gap), with costs shared by the patient (5%), insurance plan (15%), and Medicare (80%) for the rest of the year.
b Patients may start the month in one phase, but end the month in a different phase.
c Out-of-pocket costs in the gap phase equals 25% of drug price and in the catastrophic phase equals 5% of drug price.As such, SDs are not presented.and higher ARV prices will lead to greater out-of-pocket costs. 16In addition, Part D varies cost-sharing in each coverage phase-deductible (100% coinsurance), coverage phase (median coinsurance of 29% for ART and 28% for PrEP), coverage gap phase (25%), and catastrophic phase (5%). 16This variation causes sizable month-to-month fluctuation in patients' out-of-pocket costs.Beneficiaries  have high copayments (Ն$500) during the first few months of each year and still face monthly copayments of $100 to $195 even during catastrophic coverage.Consideration should be given to redesigning Part D to focus on patients' out-of-pocket costs in predictable and stable dollar terms rather than as a changing percentage of drug price; this new design should also include a ceiling for patient out-of-pocket expenses.
Out-of-pocket costs for ARV will become even more important as more HIV beneficiaries age into Medicare, rather than qualifying based on disability, which often brings support through LIS.In 2014, of the Medicare beneficiaries 65 years or older with HIV, two-thirds initially qualified for Medicare based on age. 15Nearly half of people with HIV are 50 years or older, and Medicare will be a critical source of coverage for this population in the decade ahead. 15,23,With the aging HIV population comes the need for PrEP access for older patients.In 2018, approximately 17% of new HIV infections in the United States occurred in persons 50 years or older, 3 and in 2016, 7% of individuals using PrEP were 55 years or older. 24Over time, these individuals with indications for PrEP will increasingly enter Medicare owing to their age, without necessarily qualifying for LIS.
For beneficiaries with HIV who qualify for LIS, out-of-pocket costs are lower.Beneficiaries with dual eligibility with Medicaid or who have low income and assets qualify for full LIS, and cost-sharing is limited to a few dollars for drugs. 22However, beneficiaries with only partial LIS due to higher income (between 135% and 150% of the federal poverty level) are required to pay 15% of drug costs.
These individuals may still receive low-income subsidies from other federally or state-funded programs, such as the Ryan White AIDS Drug Assistance Program, which further subsidizes out-ofpocket costs for HIV care not covered by other insurance. 25In either case, the cost burden of ART and PrEP shifts further to the taxpayer.For patients with full LIS, Medicare contributes up to threefourths of annual ARV cost under a 2019 standard Part D benefit.Even for patients without LIS, Medicare pays half to two-thirds of ARV cost because high prices push patients quickly into catastrophic coverage, in which Medicare assumes 80% of the cost burden.Federal law prohibits Medicare from negotiating directly with manufacturers for lower drug prices. 21[28] Thus, as drug prices continue to increase, the cost assumed by patients and Medicare (taxpayers) will increase correspondingly.In 2017, Part D expenditures for ARVs exceeded $4 billion, 14 which could increase substantially as efforts to expand the use of ART and PrEP proceed.
As currently designed, Part D insurance plans would cover less than one-fourth of the cost of ART and PrEP.These calculations exclude rebates and discounts from manufacturers and pharmacy benefit managers.Insurance plans' actual contributions are likely lower, although their exact magnitude remains unknown because rebate information is proprietary.For manufacturers, their 70% price discount during the coverage gap represented only a modest contribution (Յ$2750) and was frequently 10% or less of ARV prices.
7][28] Others advocate shifting a greater proportion of cost away from Medicare during the catastrophic coverage phase and onto insurance plans (50%) and manufacturers (30%). 26,27However, there is concern that doing so may increase premiums and may increase drug prices further.Thus, we believe that there is a need to address ART and PrEP price directly, such as allowing Medicare to negotiate drug prices, imposing penalties if drug prices increase beyond the general inflation rate, 13,16 setting US prices based on lower prices in other countries, and recouping government-funded research support in the case of PrEP development. 29Our findings suggest that current ART and PrEP costs fall largely on patients and taxpayers, which is not conducive to the success of the Ending the HIV Epidemic initiative.It seems to be apparent that achieving a 90% incidence reduction in HIV by 2030 will require legislation to manage the price of these drugs.

JAMA Network Open | Health Policy
R37 AI093269 from the National Institutes of Health (National Institute of Allergy and Infectious Diseases) and the Steve and Deborah Gorlin MGH Research Scholars Award.
Role of the Funder/Sponsor: The funding sources had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.

Disclaimer:
The results and views expressed in this manuscript are those of the authors and do not necessarily represent the views and policies of US Preventive Services Task Force.
Additional Contributions: Anandi Sheth, MD, Emory University School of Medicine, provided feedback during the study design.She was not compensated for her contribution.

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Files contain drug benefit data for each insurance plan (formulary coverage, JAMA Network Open | Health Policy Medicare Part D and Cost-Sharing for Antiretroviral Therapy and PReP JAMA Network Open.2020;3(4):e202739.doi:10.1001/jamanetworkopen.2020.2739(Reprinted) April 14, 2020 2/From: https://jamanetwork.com/ on 09/18/2023 30-day list prices for drugs, and copayments and coinsurance requirements) and not patient claims.We averaged prices and the out-of-pocket cost requirements for 18 first-line ART regimens based on US Department of Health and Human Services recommendations and 2 US Food and Drug Administration-approved PrEP regimens. 20This study was approved by the University of Hawaii Institutional Review Board and the Massachusetts General Hospital Partners Human Research Committee.The databases contain insurance plans' drug benefit design information (no patient data), and therefore this study did not require informed consent.For each regimen, we projected the proportion of annual treatment cost paid by the patient, insurance plan, manufacturer, and Medicare under a standard 2019 Part D insurance plan consisting of the following 4 phases 16 : (1) the patient deductible phase, fixed at $415; (2) the covered phase, in which patients pay part of the drug price (set as mean cost-sharing requirements by Part D plans nationwide), with the remaining cost paid by the insurance plan; (3) the "donut hole" or coverage gap: once total drug costs reach $3820, brand-name drug costs are shared by the patient (25%), manufacturer (70%), and insurance plan (5%), while generic drug costs are shared by the patient (37%) and manufacturer (63%); and (4) catastrophic coverage: after out-of-pocket costs (including manufacturers' discounts for brand-name drugs during the gap) total $5100, costs are borne by the patient (5%), insurance plan (15%), and Medicare (80%) until the end of the year.Part D bases all

d
For regimens allowing either TAF and FTC or TDF and FTC, data are presented for TAF and FTC.JAMA Network Open | Health Policy Medicare Part D and Cost-Sharing for Antiretroviral Therapy and PReP JAMA Network Open.2020;3(4):e202739.doi:10.1001/jamanetworkopen.2020.2739(

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Figure.Part D Cost-Sharing Between Patients, Insurance Plans, Manufacturers, and Medicare for Median-Priced Antiretroviral Therapy (ART) and Preexposure Prophylaxis (PrEP) However, Medicare, which covers persons aged 65 years or older or younger persons with permanent disabilities, has played an increasingly important role in federal funding for HIV care.In 2006, the Patient Protection and Affordable Care Act began automatically enrolling Medicaid beneficiaries with Social Security Disability Insurance into dual coverage with Medicare after 2 years. 15By 2014, approximately 1 in 4 persons with HIV who received care were insured in part through Medicare.
For all ART regimens, patients were projected to reach catastrophic coverage between February and May.For PrEP, monthly out-of-pocket costs were high in the coverage phase (mean [SD], $480 [$70]) and gap phase (mean, $430) before reaching the catastrophic phase (mean, $90) in May.