Some Medicare enrollees can pay nearly $12,000 out of their pocket for specialty drugs, as protections from the federal government are largely ineffective.
An analysis from the Kaiser Family Foundation released Wednesday found that protections against catastrophic health costs aren’t enough for specialty drugs. High prices for such products have blossomed into a major concern for Americans.
Kaiser and Georgetown University looked at 12 specialty drugs used to treat four diseases: cancer, hepatitis C, multiple sclerosis and rheumatoid arthritis. Medicare classifies a specialty drug as any product that costs more than $600 per month.
Researchers discovered that in 2014, about 2 percent of Medicare Part D enrollees used specialty drugs. In 2013, the latest year available, about 39 million people were Part D beneficiaries.
Medicare has something called a “catastrophic threshold” to protect seniors against high costs.
When a senior reaches $4,700 in out-of-pocket costs for a year, he or she qualifies for catastrophic coverage and pays a small copayment for covered drugs for the rest of the year, according to Medicare.gov.
The limit for 2016 is $4,850.
But Kaiser said that the catastrophic threshold isn’t an absolute limit on out-of-pocket spending. By law, enrollees pay 5 percent of drug costs after exceeding the catastrophic limit, the analysis said.
“Therefore, despite having catastrophic coverage, Part D enrollees can face thousands of dollars in annual out-of-pocket costs if they take expensive drugs,” the analysis said.
Take the hepatitis C cure Sovaldi, which lists at $84,000 for an entire regimen. Sovaldi could cost a senior out of pocket about $7,153 in 2016.
Sovaldi’s manufacturer Gilead Sciences was the subject of a congressional investigation that discovered the company wanted to maximize profits when setting the price.
Cancer drug costs could cost even more. Take Revlimid, which is used to treat multiple myeloma and a form of lymphoma, which has an average cost of $11,538.
Kaiser said that not all Part D enrollees would face such high costs. However, the findings suggest the burden that people on Medicare could face.
Prescription drug prices have become a hot issue, as evidenced by several polls showing it a top policy concern for Americans.
Presidential candidates on both sides of the aisle have derided high prices, but a consensus on a solution appears to be elusive.
