Over the past year, pharma has seen major shifts in how Medicare sponsors have changed their coverage methodologies. In addition, overall coverage of trending disease areas for Medicare formularies has shifted.
The Aging Baby Boomer Population
One of the main drivers affecting Medicare coverage is the aging Baby Boomer population. According to U.S. News, “By 2025, one in five Americans will be covered by Medicare, and its costs will reach $18,000 per enrollee per year.” This growth has incentivized the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) to make policy changes that affect Medicare physicians and payers.
Individual and Group Medicare Advantage Plans
One of Medicare’s recent policy changes provides reduced payments to employer-sponsored Medicare Advantage plans. These plans act as private, managed-care versions of Medicare.
According to Modern Healthcare:
“The CMS proposed terminating the bidding process for employers and unions that offer 2017 Medicare Advantage plans to their retirees. Instead of bidding, those plans would receive predetermined payments that would, in essence, lower their revenue.”
Medicare Coverage Varies by Disease Area
Last year saw both increases and decreases in coverage related to disease areas. For example, Medicare coverage became slightly more restrictive in the multiple sclerosis disease area in 2016. Based on market access data, 38% of lives are not covered by Medicare for the average MS drug.
However, in other areas, such as detoxification agents, Medicare restrictions actually decreased in 2016.
Understanding Coverage Shifts
As the Medicare market becomes more complicated, MMIT strives to understand and educate pharma, payers and prescribers on important coverage changes. Our experts manage Medicare formularies and analyze Medicare coverage to help pharma companies succeed.
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