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Medicare beneficiaries are facing greater access restrictions on their lifesaving medicines, according to a study by the Schaeffer Center at the University of Southern California recently published in Health Affairs. Looking at the Medicare Part D prescription drug benefit program, researchers found that health plans and pharmacy benefit managers (PBMs) are imposing more utilization management restrictions on prescription medicines or excluding the medicines from their formularies altogether. Here are some key findings:

• Part D plans and PBMs are steadily imposing more restrictions on formularies.
  • The total number of medicines, on average, that PBMs and health plans excluded from their prescription drug formularies increased from 20% in 2011 to more than 30% in 2020.
  • Nearly half (45%) of brand medicines and 22% of generic treatments were excluded from formulary coverage in 2020.
    
    
• The total number of medicines, on average, subject to access delays, such as “fail first” and prior authorization, also rose to 14% in 2020. Nearly one out of four (24%) brand treatments and 8% of generic drugs were subject to prior authorization and “fail first” requirements in 2020.
  
  
• Utilization restrictions were greater for brand medicines than generics. More than two-thirds (68%) of brand-name-only medicines — those without a generic alternative — were subject to either utilization management restrictions or excluded from formulary coverage in 2020.

At the same time, premiums charged by health plans are going up. As one of the study’s co-authors commented, “Plans are charging more and they’re covering less, so it’s a double whammy.”

This study builds on a previous report from the nonpartisan Government Accountability Office (GAO) showing patients in Medicare Part D paid billions more for medicines than insurers and PBMs.

When Congress passed the Inflation Reduction Act, it had an opportunity to fix these problems. Instead, the law’s price-setting provisions threaten to make these challenges even worse. The law does nothing to rein in abusive insurance and PBM practices. In fact, it does quite the opposite. The law creates perverse incentives for PBMs and health plans to make it even harder and more costly for patients to get their medicines.

As noted before, under the law, health plans can restrict patient access to certain treatments in favor of those that financially benefit insurers. They do this by imposing more utilization management rules on treatments, increasing patients’ out-of-pocket costs or refusing to cover other treatments on their formularies entirely.

Choice and access have long been hallmarks of the Medicare Part D program. It’s partly why the program has been so wildly popular with seniors. Congress must stop abuses of the program and protect seniors’ ability to get the treatments they need. They can start by requiring PBMs to share rebates with seniors at the pharmacy.  

Nicole Longo

Nicole Longo is Deputy Vice President of public affairs at PhRMA focusing on Medicare, 340B, importation and more. She previously worked for a D.C.-based public affairs firm where she assisted a wide range of clients with communications efforts on everything from trade policy to agriculture policy to health care policy. Outside the office, Nicole can be found trying new restaurants (usually Italian), taking an occasional barre class and cheering on the Cincinnati Bengals.

Nicole Longo

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