The Med Diva

An insider's guide to Medicare Part D and more

Archive for the category “Prescription drug costs”

Yes, you can switch your pharmacy at any time with Medicare Part D

Walgreens survey about Medicare Part D

This infographic from Walgreens explains some of the findings from a recent survey regarding beliefs about Medicare Part D.

Today I had an “ah ha!” moment at work.

For years I have been telling the over 2 million Medicare beneficiaries in my company’s Part D prescription drug plans that they can often save money by using a different pharmacy. Using a mail-order pharmacy almost always yields savings, as does switching to a preferred retail pharmacy that offers lower co-pays or moving to a pharmacy that simply charges less money overall for prescription medications.

And for years I have been wondering why so few Part D plan members are taking my advice and using a more cost-effective pharmacy. Why aren’t seniors taking advantage of these savings opportunities?, I have often asked my coworkers and friends.

This morning I came across the results of an April 2013 Walgreens survey that answered my question — or at least, provided one explanation.   According to the survey, almost 30% of the 1,000 beneficiaries surveyed did not know that they can switch pharmacies at any time during the year. These 300 Medicare enrollees falsely believed that they could only switch to a new pharmacy during Medicare’s annual Open Enrollment Period.  In other words, they thought that if they were using XYZ Pharmacy when they first enrolled in a plan, they’d have to stick with XYZ until Open Enrollment (October 15 to December 7 of each year).

Although many Medicare beneficiaries shun mail-order pharmacies, even though using mail order is one of the best ways to save, retail pharmacies in a preferred pharmacy network are a great alternative for some people. Using a preferred pharmacy — if the Part D plan offers a preferred pharmacy network and there is a preferred pharmacy close to home — can potentially save beneficiaries hundreds of dollars each year on prescription drug co-pays.

However, it looks as though few people are taking advantage of preferred pharmacies. In fact, only 21 percent of respondents switched to a pharmacy within their plan’s preferred network as a way to save. One-fourth (24 percent) said they were unaware of whether their plan offers a preferred pharmacy option.

The survey  “underscores the need to educate Part D beneficiaries about how they can save on prescription and other health care costs,” said Dan Luce, director of pharmacy affairs, Walgreens. Many more Medicare Part D plans are starting to offer preferred pharmacy networks, so I guess I have my work cut out for me.


Live in New York or New Jersey? Better speak up and ask for that generic drug.

Location generic drugsBritish real estate developer Lord Harold Samuel once said, “There are three things you need in property. These are location, location, and location.” Apparently the same is true when it comes to prescribing generic drugs for Medicare beneficiaries, too.

According to the Express Scripts 2012 Drug Trend Report, where you hang your hat will frequently determine how often your doctor will prescribe a generic drug for you: Medicare providers in New Jersey, New York, and southern states such as Texas and Louisiana prescribe fewer cost-saving generics than their counterparts in Midwestern states such as Ohio and Wisconsin.

“A prescriber’s geographic location is a strong predictor of the proportion of generic prescriptions they write,” says Sharon Frazee, vice president, Research & Analysis, Express Scripts. “Location encompasses many features that have a complex influence on prescribing and utilization.” Some of the regional features that influence the prescribing and utilization of generic drugs include income levels, the impact of media markets and advertising dollars, and the proximity to urban centers and healthcare services.

Here are some other interesting trends that can help predict which healthcare providers are more apt to prescribe generics:

• Younger, less tenured healthcare providers, including physicians, nurse practitioners and physician assistants, are more likely to prescribe generic medications to Medicare patients than older providers with more years in practice.
• Prescribers who care for a large number of Medicare patients are more likely to prescribe generics than those with fewer Medicare patients.
• Prescribers who practice in rural areas adjacent to large cities are more likely to prescribe generics than prescribers in metropolitan areas and urban centers.

One possible explanation for these findings has to do with habit and experience: Some healthcare providers have been practicing medicine longer than many generic drugs have been on the market. They may prescribe the brand drugs with which they are familiar and that have worked well for their patients out of habit, without giving any thought to the cost. If their patients don’t speak up and ask about generic drugs, they’ll immediately fill out the script for the brand-name drugs they know the best (this is especially true if the physician has pre-printed scripts for certain popular brands).

As I have mentioned in previous posts, brand-name drugs, especially “blockbuster drugs” like Lipitor® and Plavix®, are often a lot more expensive than their generic counterparts. And if pricing trends from 2011 to 2012 are any indication, I wouldn’t expect prices on brand-name drugs to come down anytime soon.

The increasing availability of lower-cost generic drugs offers significant savings opportunities for Medicare beneficiaries – but unless you speak up and specifically ask your healthcare provider to prescribe generics whenever possible, you may never enjoy these added savings. Especially if you live in New York or New Jersey.

Switching from Lipitor to a generic should be a no-brainer for Medicare members…or so I thought!

Brand drugs like Lipitor cost much more than genericsOn November 30, 2011, the first generic version of Lipitor® (atorvastatin) hit the market. A few months prior, my company asked me to write a letter to all the members in our Medicare Part D plans who were taking Pfizer’s top-selling cholesterol medicine. In the letter, I advised our members that less expensive generic versions of the drug would be soon be available. I also reminded them that not only do these generic drugs cost less than Lipitor, but copayments are also generally lower for generics than for brand-name drugs.

This is a no-brainer, I thought to myself. Everyone is going to take advantage of this savings opportunity, provided their doctors say it’s okay to switch to the generic.

I was wrong.

I just found out that less than 3 percent of the members who received this letter switched to a generic version of Lipitor. I find this very surprising.

Brand-name drugs, especially “blockbuster drugs” like Lipitor and Plavix®, are often a lot more expensive than generic drugs. And if pricing trends from 2011 to 2012 are any indication, I wouldn’t expect prices on brand-name drugs to come down anytime soon.

According to an Express Scripts report based on 2012 drug claims data, prices for brands increased 13.3 percent while generic drug prices decreased by 21.9 percent. The report states that the price differences between brand-name and generic drugs is more than 35 percent, which is “the largest widening of brand and generic prices since Express Scripts began calculating its Prescription Price Index in 2008.”

Granted, Pfizer did make a lot of efforts to hold onto its customers–for example, they offered insured patients a discount card to get Lipitor for $4 a month–but I know Pfizer didn’t reach everyone, because about 97 percent of our members are still getting Lipitor through their Medicare Part D plan. So about 97 percent of our members are not only paying more than they need to, but they are also approaching the Coverage Gap stage of their benefit a lot faster than those beneficiaries who switched to the generic drug.

Let’s compare Mr. Smith’s costs for Lipitor with Mrs. Johnson’s costs for the generic version of Lipitor as an example:

Mr. Smith always uses brand-name drugs
• During the Initial Coverage period, Mr. Smith has a 25 percent co-payment on brand-name drugs. He pays $32.25 for a 30-day supply of Lipitor. His plan pays the remainder, or $96.75.
• Mr. Smith always uses brand-name drugs, so he reaches the Coverage Gap in July. (Remember, it’s the total amount that both you and your plan pays that advances you to the Coverage Gap.)
• Now he has to fork over $61.25 for Lipitor (the full cost of the drug minus the
47.5 percent discount) for the rest of the year.
Mr. Smith’s total annual cost for Lipitor is $561.

Mrs. Johnson always uses generic drugs
•During the Initial Coverage period, Mrs. Johnson has a 25 percent co-payment on generic drugs. She pays $3.27 for a 30-day supply of atorvastatin, which is a generic version of Lipitor. Her plan pays the remainder, or $9.81.
• Mrs. Johnson always uses generic drugs whenever possible, so she never reaches the Coverage Gap.
Mrs. Johnson’s total annual cost for atorvastatin is $39.24.

I know I’d much rather pay $3.27 for a generic that’s just as safe and effective as a brand-name drug that costs 10 times more!

So is there anyone out there who can tell me why a large majority of Medicare beneficiaries are paying so much more than they have to for their medications? What am I missing? Surely not my brain!?

Don’t toss my work in the trash: Give your Part D mail-order pharmacy a try!

Part D Mail-Order Pharmacy

The other night at our holiday party, the VP of my department asked me if I was still writing my Medicare blog. I told him I had taken a hiatus because I was simply “swamped” at work with a major campaign to entice Medicare beneficiaries to use their plan’s mail-order pharmacy (we call it home delivery pharmacy service).

For the past few weeks, I have been writing several letters that tout the benefits of home delivery in order to convince people who take drugs on a regular basis to switch from their retail pharmacy to mail order. I know for a fact that my company’s Medicare Part D plan bombards our Medicare members with such letters every year. I apologize—it’s not my fault, I swear! I also know that many people are reluctant to switch to mail order—or absolutely refuse to try it—and toss all my hard work in the garbage.

I have to admit I put off using my plan’s mail-order pharmacy at first, simply because I didn’t want to deal with the paperwork involved. I thought it would be a hassle to switch my one prescription from my favorite retail pharmacy. But when I used my plan’s price comparison tool and discovered I would pay about $100 less every 90 days with mail, I immediately made the switch. 

Guess what? It wasn’t a hassle at all! The customer service rep did all the work for me–she even called the doctor to get my prescription–and in a few days my medication arrived in a secure package in my mailbox.

I can’t say anything bad about home delivery. I can order up to a 3-month supply of my medication for a lot less money than a 30-day supply at my pharmacy. My drugs arrive in my mailbox, so I don’t have to drive to the pharmacy when I don’t feel well or the weather is bad. And I never have to wait in line to pay because there’s never a line at my mailbox!

If I have to work late, I don’t have to worry about the pharmacy closing before I get home — after all, my mailbox never closes!  Best of all, my mail-order pharmacy sends me automatic refill reminders by e-mail, so I never forget when it’s time to refill. I can order refills online, which takes about 2 minutes.

If the above sounds like a pitch, you’re right. But I really believe in it, and know it could save you time and money.

I like to tell my friends and family that using mail order for our drugs is no different from using mail order for buying books (Amazon), DVDs (Netflix), or any other product we buy online. So please don’t throw my letter in the trash – give mail order a try. If you really don’t like it, you can always switch back.

Medicare Part D premiums not expected to rise in 2013

Today the Obama administration announced that the average premium for basic Medicare Part D drug coverage will stay the same next year, at around $30 a month. This makes three years in a row that the monthly Part D premium has stayed in the $30 range for Medicare beneficiaries.

Because we’re dealing with Medicare, there is, of course, a caveat. The $30 amount is just an average, so some beneficiaries may pay a higher premium amount in 2013, while others may pay less. That’s why it’s so crucial to check your plan during open enrollment season this fall (October 15 to December 7) and shop around if your costs go up too much or you’re just not satisfied with your plan.

Why it’s important to choose a plan with the lowest total cost

Although premiums are important, if you’re shopping around for a new Medicare Part D plan, you should look for a plan that offers the lowest total cost based on the medications you take. I really can’t stress this point enough.

All too often, Medicare beneficiaries will choose a plan with the lowest monthly premium, only to find out weeks or months later that they’re going pay more in the long run. It may be that the co-payments for their medications are higher in this “low-cost” plan, or they have a higher annual deductible. As I have mentioned before, remember to consider the monthly premium plus the annual costs for all your medications when making your decision.


Expect higher Medicare co-pays for brand-name drugs in 2012

I’ve said it once and I’ll say it a hundred times: Lower-priced, FDA-approved generic drugs are the best way to go if your doctor says they are right for you and your condition. Here’s just one more reason why.

Starting in 2012, your Medicare prescription drug plan co-payments for many brand-name drugs could go up significantly.*

According to a recent study by data analysis firm Avalere Health, co-payments (the portion of the prescription cost that you pay the pharmacy) for Tier 3 preferred brand-name drugs will increase by 40 percent on average next year, from $29.01 in 2011 to $40.60.  Preferred brands are those drugs for which your Part D plan has negotiated a discount with the manufacturer.

In addition, Tier 4 non-preferred brands will average nearly 30 percent more, from $71.52 this year to $91.67. You’ll also pay a bigger share of the cost of specialty drugs—about 32 percent compared to about 27 percent this year. That may not sound like much, but when you consider specialty drugs can cost $1,000 or more per prescription, a 5-point cost-share increase could be huge.


Co-pays for generics will remain stable or decline

Now for the good news. According to this same study, co-pays for preferred generics will remain stable (about $3.79 on average) in 2012 while co-pays for non-preferred generics will decrease to $9.90 on average. This drop is a 43 percent reduction from the current average cost of $17.29.

According to Avalere CEO Dan Mendelson, the study emphasizes how important it is for Medicare beneficiaries to review all of their Part D plan’s costs before Open Enrollment ends December 7.

As I’ve mentioned before, if you’re shopping around for a new Medicare Part D plan, you should look for a plan that offers the lowest total cost based on the medications you take. It doesn’t help to choose a plan with the lowest monthly premium, only to find out weeks or months later that you’re going to pay more in the long run because the co-payments for your medications are higher in this “low-cost” plan or the cost of your annual deductible has increased.

* Avalere figures shown are averages for the entire Medicare Part D program. Actual costs could vary markedly by medication, plan, and region of the country.

Popular brand-drug patent expirations represent $9 billion+ in savings for Medicare beneficiaries

You probably already know that the standard Medicare Part D benefit includes a 50% discount on most brand-name drugs during the Coverage Gap stage.  What you may not know is that even with the discount, lower-cost generic drugs could still help you save more all year long.

Using generic medications instead of brand-name drugs is one of the best ways to lower your overall costs. And here’s even better news: Frequently used brand-name drugs such as Lipitor®, Lexapro®, Seroquel®, and Singulair® are expected to come off patent in 2012. These drugs currently account for more than $31 billion in retail sales. The new generic versions of these drugs could represent more than $9 billion in incremental savings opportunities for Medicare beneficiaries.

Generics are a great choice for savings and quality 

If you’re like me, when you think “generic” you may not always think “quality.” Given the choice of my favorite brand of raisin bran cereal for $3.99 or the generic no-name brand for $2.99, I’ll pay the extra dollar any day. Same goes for brand-name yogurt, shampoo, bread, or body lotion. The brand-name product just seems to taste or work better than the no-name versions.

 But FDA-approved generic drugs have been tested for quality and strength, and are as safe and effective as their brand-name counterparts. Generic drugs look different, but you can expect them to provide the same health benefits as their brand-name counterparts—often at a lower cost to you.

 I always ask my doctor to prescribe the generic drug if it’s available, because I know it will work just as well but cost so much less. In fact, according to the Food and Drug Administration, generic drugs can cost 30 percent to 80 percent less than brand-name drugs.

So if you’re taking a brand-name medication, ask your doctor whether a lower-cost generic drug could work for you. Keep in mind there are two types of generic drugs:

• A generic equivalent contains the same active ingredients as its brand-name counterpart and works the same way in your body.

• A generic alternative may contain different active ingredients, but is used to treat the same condition.

Remember, your doctor wants to help keep your medications affordable, so it’s always okay to ask if the prescription can be written for a generic drug. You deserve to save money, so don’t be afraid to just ask!

Always Read the Fine Print When Comparing Medicare Part D Plans

On Tuesday, drugstore operator Rite Aid Corp. joined the prescription drug plan bandwagon by introducing a new Part D plan through a partnership with Envision Insurance. This announcement follows closely on the heels of new plans from CVS Caremark Corp. and Walgreens Co.—both introduced this month–and Wal-Mart Stores Inc., which launched its plan with Humana last year.

Like Humana has done with its low-cost Walmart-Preferred Rx Plan, big chains such as Rite Aid and Walgreens are trying to lure seniors into their plans by advertising either low monthly premiums, low co-payments, or even $0 co-payments for generic drugs. One of the reasons they can charge such low prices is because it’s a great way to fill as many prescriptions as possible and get more shoppers into their stores to buy other products.

The catch for the consumer, though—of course there’s a catch—is that these drugstore-sponsored plans have highly restrictive pharmacy networks. If you purchase your drugs from a pharmacy that is not in the network, you will more than likely have to pay more than what is advertised in the large print.

A $10 co-payment is not the same as a $1 co-payment.

For example, if you go to the website for Humana’s Walmart-Preferred Rx Plan, you will see that the plan offers a $1 co-payment for preferred generics. However, read the fine print, and you’ll discover that in order to pay only $1, you have to use a preferred pharmacy, which includes, surprise, surprise, pharmacies at Walmart, Walmart Express, Sam’s Club, and Walmart Neighborhood Market. The price jumps to $10 if you use any other pharmacy in the restricted network. For preferred brand-name drugs, you’ll pay a 20% coinsurance if you use a Walmart pharmacy, but almost double (37%) anywhere else within the network.

How close is a large chain pharmacy to your home?

Last year, despite my objections, a family member enrolled in the Humana plan. She loved the low monthly premium, but she hated that she would have to use a Walmart pharmacy to get the best prices for her medications. The closest Walmart is about 25 minutes from her home, so not only does she have to pay extra for gas, but it takes her more than an hour to get there and back by the time she parks and waits on line. (I’m still trying to convince her to switch to the mail-order pharmacy!)

The moral of this story is two-fold: Always read the fine print whenever you are comparing prescription drug plans, and make sure that your local or favorite pharmacy is a preferred pharmacy in the plan’s network. Large, national prescription drug plans from companies like Blue Cross Blue Shield, Medco, or Wellcare may have higher premiums, but if you prefer using a smaller retail pharmacy in your hometown, your total costs may even out in the end.

Reminder: Open Enrollment is now through December 7, 2011.

The Medicare Coverage Gap Discount Program:

What the Drug Makers Don’t Want You to Know, Part II

In discussing the Medicare Coverage Gap Discount Program yesterday, I explained why lower-cost generics are still the best way to lower your drug costs—even with the 50% discount on brand-name drugs in the Coverage Gap. Now I’ll share a little-known detail about the Discount Program that could affect you if you’re still using brand-name drugs.

Under the Discount Program, you’re entitled to a 50% manufacturer discount on covered Part D brand-name drugs when you reach the Coverage Gap (aka donut hole). So if the full cost of your brand-name drug is $130, for example, you’ll pay only $65 in the Gap, plus any nominal dispensing fee.

This all sounds wonderful, but we’re dealing with Medicare, so of course there’s a catch: The drug manufacturer has to sign an agreement with the Centers for Medicare & Medicaid Services (CMS) to participate in the program. And guess what? Not all manufacturers are participating in this program.

If a drug manufacturer does not agree to participate in the program:
• Its drugs will not be covered under Medicare Part D.
• Your plan cannot grant a coverage exception if you’re taking one of this company’s medications. 
• If you must take this particular drug, you’ll have to pay full price for it.  

Adding insult to injury

Here’s the real kicker: If you pay the full price for your drug because the manufacturer isn’t participating in the Discount Program, your out-of-pocket costs for this drug will not count toward getting out of the Gap and into the Catastrophic Coverage stage. So you could stay trapped in the Gap longer as you to continue to pay your monthly premium.

What drug manufacturers are participating in the Discount Program?

CMS has tried to be helpful by publishing a list of manufacturers that have agreed to participate in the program. But this listing doesn’t make a lot of sense unless you have a PhD in Med D. You can check it out by clicking here and then clicking on “2011 Labeler Code File” if you’re feeling adventurous. But if your doctor prescribes a new brand-name drug, I suggest you call your plan to make sure it’s covered. If it’s not, there may be a lower-cost generic that will work just as well for you.

Remember: Medicare Open Enrollment is now through December 7, 2011.

The Medicare Coverage Gap Discount Program

What the Drug Makers Don’t Want You to Know, Part I

Although the Coverage Gap Discount Program is no doubt very helpful if you reach the Coverage Gap (aka “donut hole”) and use brand-name drugs, what you may not know—and what the big drug companies hope you never figure out—is that even with the 50% discount on brand-name prescription drugs, lower-cost generic drugs are still the best deal in most cases.

For the past year, nonprofit groups and the media have all been touting the 50% brand discount as a great way to lower drug costs when you’re in the Coverage Gap. What they should be telling you, however, is although the discount is helpful, the real savings lie in generics, no matter what stage of the benefit you’re in. Generic drugs make the most sense in every benefit stage.

I’ve always recommended FDA-approved generic drugs as one of the best ways to lower your drug costs and delay entering the Coverage Gap. Not only do they generally cost up to 80% less than brands to begin with, but now you get an additional 7% discount on generics when you’re in the Gap. (In 2012, you’ll get a 14% discount on generic drugs in this stage.) 
 So even with the 50% discount on brand-name drugs, generics still make more sense.

With the generic version of Lipitor set to hit the shelves in November, let’s compare Mrs. Smith’s costs for Lipitor with Mr. Johnson’s costs for the generic version of Lipitor as an example:

Mrs. Smith Uses the Brand-Name Drug Lipitor
• During the Initial Coverage period, Mrs. Smith has a 25% co-payment on brand-name drugs. She pays $32.25 for a 30-day supply of her brand-name cholesterol drug, Lipitor.
• Mrs. Smith always uses brand-name drugs, so she reaches the Coverage Gap in July. Now she has to fork over $67.08 for Lipitor. This is the full cost of the drug minus the 50% discount!

Mr. Johnson Uses  Generic Drugs
• During the Initial Coverage period, Mr. Johnson pays $3.27 for a 30-day supply of simvastatin, which is a generic version of Lipitor.
• Mr. Johnson always uses generic drugs so he never reaches the Coverage Gap. But if he did, he’d pay only $13.11 for simvastatin. This is the full cost of the drug minus the 7% discount.

I know I’d much rather pay $13.11 for a generic that’s just as safe and effective as its $67.08 brand-name counterpart. I also know the big pharmacy companies are not happy I’m sharing this information with you, because they want you to buy their expensive brand-name drugs. They hope that by playing up the 50% discount, seniors will continue to stick with brands. I hope that having read this, you now know better.

In Part 2 of this series, I’ll share another little-known fact about the Discount Program that doesn’t make any sense at all.

Reminder: Open Enrollment for 2012 is October 15 through December 7, 2011.

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