Planned reduction of Medicare drug costs could ease burden on cash-strapped seniors

Susie Bell of Penn Township dreads this time of year.

It’s not the hot weather that bothers her, but the fact that by early summer, she’s fallen into the “doughnut hole,” a colloquial term for the annual Medicare coverage gap — when the health care plan contributes far less toward her medications.

After she passes the “doughnut hole” threshold each year, Bell must begin paying more for her Eliquis, a blood clot medication she has taken for the past two years. She recently footed a bill of $454.20 for a three-month supply of Eliquis.

Before crossing that threshold each year, her three-month supply costs her $141. But, by June, the cost of Eliquis to Medicare itself — not the amount that Bell pays — pushes her over the edge of the doughnut hole threshold and more than triples the amount she pays out-of-pocket.

“You have to learn to budget for it,” she said, noting that sometimes means waiting to refill her medications until the Medicare cycle resets at the beginning of the year. “Last year, I was due to get refilled in December. I had to call them to ask them to hold off until January, because then the doughnut hole starts again, and you’re out of the doughnut hole. Then you run the risk of, are you going to get it in time?”

A new Biden administration initiative to negotiate the price of 10 expensive prescription drugs, including Eliquis, for people on Medicare could help ease Bell’s financial burden.

According to a White House statement, seniors nationwide paid $3.4 billion in out-of-pocket costs last year for the 10 drugs selected for negotiation: Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara and NovoLog.

The drugs treat relatively common but serious conditions, including blood clots, diabetes, heart disease and cancer. A Department of Health and Human Services report said more than 450,000 people enrolled in Medicare in Pennsylvania take at least one of the medications.

The negotiations, which are facilitated by the Inflation Reduction Act, will begin with participating manufacturers this year. The negotiated prices would take effect in 2026.

For Bell, reducing the price of Eliquis would be “a great thing,” she said.

“Of course, it would be nice if they did it faster,” Bell said. “You don’t want to be dead before they do it.”

Parts of the plan

Dr. Walid F. Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, says the initiative to negotiate lower drug prices is one of a host of other changes that accompany the Inflation Reduction Act and other Biden administration plans.

Among them is a cap of $2,000 on the total amount that people on Medicare will have to pay for prescription drugs, which goes into effect in 2025, and a cap of $35 on the monthly price of insulin for people on Medicare, which took effect this year.

Gellad was somewhat surprised about the insulin cap, but said it was no surprise that the other 10 drugs were chosen.

“They are used by a lot of Medicare beneficiaries,” he said. “They have certain criteria they have to follow for how they choose these drugs. Part of the criteria is that Medicare spends a lot of money on them. If they’re very expensive and a lot of people use them, then it’s going to fit that criteria.”

Medicare’s ability to put a cap on out-of-pocket costs is connected to the negotiation, he said.

“In some ways, the negotiation of these 10 drugs will have a direct effect in slightly reducing the costs that people have to pay, but it will also reduce the overall amount that Medicare has to pay, which will allow this cap,” he said. “I think that it will definitely help some people.”

The move is a “big deal,” Gellad noted, especially as medication costs have skyrocketed over the years.

“Medications have become much more expensive. It’s not necessarily to do with the inflation that we are all dealing with — the prices have gone up and up and up and up, and there’s been nothing to stop them from going up,” he said. “Because of the donut hole and the lack of any cap, patients have been exposed to that. It’s really just decades of increasing pricing of pharmaceuticals. This is a long-standing problem.”

Reactions from enrollees

For people who are enrolled in Medicare, reducing prices of prescription drugs could have a big impact. The news of the plan came as a pleasant surprise for Donna Adams of Tarentum.

She takes 11 medications a day, some of which are covered and others for which she pays out-of-pocket.

Gabapentin, used to treat diabetes, is a pill she has to take twice a day. Without coverage, it would cost Adams $800 a month, she said.

“They’re making it for less than a penny a pill and selling it for $20,” she said. “My elastic hose cost $75 a pair. It’s just crazy. The older you get, the more you have to do, and it just gets to be very expensive.”

Sue Dawson, also of Tarentum, said the process of wading through Medicare and prescription coverage is a difficult task for older people.

Since suffering twice from blood clots in her lungs, Dawson enrolled in Community Life, primarily for its prescription drug coverage.

“It was very hard to change plans and give up my doctor, but I take six pills a day,” she said. “One of them has to be a certain brand name because I have an allergy. When I saw the price of what I would have to pay, I almost fell over.

“I’d be all in for this lowering cost that they’re talking about because imagining all the people who don’t have insurance is really hard.”

Bill Barlock of Unity hopes future drugs that may be negotiated under the Inflation Reduction Act include Breo Ellipta, which he takes for chronic obstructive pulmonary disease. He pays $325 a month for the drug.

“Everything that I take has gone up dramatically in price,” he said. “It seems as if they know the ones they can make as much money off of, and they just raise the prices on those.”

Amy Barlock, Bill’s wife, noted that drug expenses can be particularly difficult to manage for patients on fixed incomes.

“It can be very disconcerting in our planning, even though we plan very well financially,” she said, noting that Bill has had to stretch his medications before. “You really make decisions on what you can and cannot do that month.”

Pat Wolfgang of Delmont said her cardiologist initially put her on Jardiance, a diabetes and heart failure medicine, but she had to stop after a month because the combined costs she and Medicare were paying would have put her in the donut hole. If the price of Jardiance was decreased, she would be able to take it again, she said.

“They don’t tell you that when you’re signing up for Medicare,” she said.

Katie Smith’s mother, Cathy Lankey, is being treated for cancer, and had to stop taking Eliquis when she switched to Medicare in April because of the expense.

“The price of everything, especially on a fixed budget, is really hard,” Smith said, noting that Eliquis would have cost her mother more than $700 a month. Her mother is now taking a different medication.

“(The negotiation) would really help if it went through,” Smith said.

Staff writer Tawnya Panizzi contributed to this story.