The $500 Threshold Under Medicare
This article was originally published in RPM Report
The federal government is allowing Medicare prescription drug plans to make aggressive use of four-tier formularies. A key detail is the definition of products that qualify for the fourth "specialty" tier. CMS' rules will affect price negotiations for high cost drugs.
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CMS is forcing Medicare drug plans to cover "substantially all" brands in six key classes through 2007. That's good for some big brands but it could hasten the end of the private market system for Part D. The decision means that drug marketers in the six protected classes--antipsychotics, antidepressants, anticonvulsants, antiretrovirals, antineoplastics, and immunosuppressants-will continue to hold the upper hand in discount negotiations with managed care plans for about eighteen months, until the wrangling for 2008 plan prices begins in mid-2007.
While not yet rivals to Big Pharma when it comes to clinical-stage licensing, spec pharmas have in some individual cases proven to be more favored partners than their Big Pharma competitors.
CMS and the Medicare private drug plans are using Medicare enrollment to teach seniors -- and their adult advisors -- about the cost savings from therapeutic interchange. Training patients to look for cost savings and to discuss costs with doctors is clearly a secondary objective of the Medicare enrollment process. The Medicare plan finder website and private plan sites carry frequent messages to alert beneficiaries cost savings. Pfizer responds with consumer-based pricing for Lipitor.