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CMS Launches New Model to Lower Out-of-Pocket Costs for Insulin

By Kate Thomas posted 03-17-2020 13:57


In a week where the Nation’s attention was focused on the COVID-19 pandemic, CMS made a major announcement about a new voluntary pricing model that could cap insulin costs at $35 per month for certain Medicare beneficiaries. This new model, referred to as the Part D Senior Savings Model (“the Model”), seeks to lower out-of-pocket costs and provide beneficiaries with additional Part D prescription drug plan (PDP) choices during the coverage gap period.

Eligible pharmaceutical manufacturers and Part D sponsors (plans) are invited to participate in this voluntary model. Already, ADCES has seen a positive response from many of our industry partners who have indicated that they plan to participate. CMS estimates that the Model has the potential to impact approximately 1.3 million eligible beneficiaries.

Beginning January 1, 2021, Part D sponsors participating in the Model will offer beneficiaries plan choices that provide broad access to multiple types of insulin, marketed by participating pharmaceutical manufacturers, at a maximum $35 copay for a 30-days’ supply in the deductible, initial coverage, and coverage gap phases of the Part D benefit. As a result, beneficiaries who take insulin and enroll in a plan participating in the Model could save an average of $446 in annual out-of-pocket costs on insulin, or over 66 percent, relative to their average cost-sharing today.[1] The goal of this Model is to keep out-of-pocket costs low, consistent, and predictable. CMS hopes these efforts will result in improved access to and affordability of insulin to support Medicare beneficiaries with diabetes who require insulin as a part of their care.

The Model  applies to beneficiaries who receive Part D coverage through both standalone PDPs and Medicare Advantage (MA) plans that provide Part D prescription drug coverage (MA-PDs); specifically enrollees who do not qualify for the Part D Low-Income Subsidy (LIS) or employer group waiver plans (EGWPs).

CMS asked pharmaceutical manufacturers to apply by March 18 to participate in the Model. CMS also released an RFA for Part D Sponsors who may submit a letter of intent by April 10, 2020 and must apply by May 1, 2020 to participate in the Model.

ADCES appreciates CMS’ efforts to bring stakeholders together to lower costs for Medicare beneficiaries with diabetes. We will keep ADCES members informed with any developments related to this new model.