In late September, CMS released their plan landscape files which suggested that beneficiary drug coverage and access will not worsen under Part D in 2025, and this week the agency released Part D plan formularies. However, the information provided by CMS does not provide a complete picture of the ways the price setting in IRA likely will make it harder for beneficiaries to access the medicines they need under Part D.
Now that the CMS formulary files are publicly available and researchers are starting to evaluate them, here are four important things to keep in mind:
1. Part D formularies have grown increasingly restrictive, and plans confirm that this will grow worse in the coming years because of the IRA.
- Health plan directors and pharmacy managers confirm that the IRA will lead to restricted treatment options for beneficiaries, with 78% reporting that they plan to “limit therapeutic options in response to” government price setting in Part D.
- 9 in 10 payers say they expect to increase formulary exclusions and utilization management restrictions because of the IRA’s Part D reforms more broadly.
2. Beneficiaries often face delays in access to needed medicines in Part D.
- According to a study by IQVIA, nearly 20% of Medicare patients who experienced an initial rejection for their cancer medicine waited four weeks or longer before initiating therapy.
- Assessing the impact of IRA’s MFP price-setting and benefit design changes on patient access will require looking beyond traditional formulary analyses, which examine metrics like the average rates of utilization management (UM) and total drug exclusions, and instead examine how plans’ policies impact patient access in real life like the length of time it takes patients to fill a prescription after they experience an initial rejection at the pharmacy counter.
3. Part D plans employ formulary-based access restrictions that are not readily apparent in the review of the formularies themselves.
- In a recent payer survey, more than one third of payers acknowledge they plan to apply “novel UM tools” like delaying approval of prior authorization and using AI to make coverage decisions, which will not show up in the formulary files plans submit to CMS.
- Recent research found that plans may embed multiple step therapy requirements within a single formulary “prior authorization” policy, which can prevent or delay beneficiaries from accessing the clinically appropriate medicine they need.
4. CMS admits that because of government price setting and other major changes to Part D under IRA, further careful monitoring of formularies is needed.
- In CMS’ own words, “Part D sponsors may be incentivized in certain circumstances to disadvantage [price-set] selected drugs by placing selected drugs on less favorable tiers compared to non-selected drugs, or by applying utilization management that is not based on medical appropriateness to steer Part D beneficiaries away from selected drugs in favor of non-selected drugs.”
- IRA also made unprecedented changes to Part D’s benefit design, including significantly increasing the liability of Part D plans beginning in 2025. As a result, Part D plan sponsors are likely to expand upon current trends toward relying on more UM, increasing the number of drugs subject to maximum coinsurance requirements, increasing the number of drugs placed on non-preferred and specialty tiers, or excluding from the formulary some medicines altogether.
- A recent analysis by Avalere finds that 4.8 million Part D patients taking anticoagulants, 4.1 million taking medicines that treat diabetes, and almost 550,000 patients taking heart failure agents are at risk of formulary disruptions due to the IRA.
Bottom line: The plan coverage and UM policies described in Part D formulary files don’t tell the full story of the growing access barriers that Medicare patients are likely to face under IRA. Part D beneficiaries deserve continued access to the medicines they need without insurance companies and PBMs standing in the way. CMS should take steps to strengthen patient access protections in Part D and should begin gathering better data to track real-world beneficiary access to medicines under Part D.
