Oct 2, 2023 - Health

Medicare Advantage plan slashes drug co-pays ahead of negotiations

Illustration of a red cross spinning to reveal money

Illustration: Rebecca Zisser/Axios

Medicare Advantage insurer SCAN is getting ahead of the program's planned drug price negotiations by offering seniors free or $11 monthly co-pays for 13 name-brand drugs, the carrier told Axios first.

Why it matters: The nonprofit will make the changes for the 2024 plan year — two years before the first negotiated prices are supposed to take effect.

  • "We don't have to wait for the government. We can have the rigor and figure out additional ways ourselves," Sharon Jhawar, SCAN's chief pharmacy officer, said in an interview.

Details: Six drugs on SCAN's new formulary tier are also on Medicare's list of drugs slated for price negotiation, including the blood thinners Eliquis and Xarelto and the diabetes medicine Jardiance.

  • SCAN chose cardiovascular and diabetes drugs with no generic alternative, which make them extra costly to insurers and, ultimately, patients.
  • Beneficiaries eligible for both Medicare and Medicaid, along with those in plans targeted to patients with diabetes and heart failure, will have no co-pay for the drugs, Jhawar said. Consumers in other offerings will pay $11 out of pocket.
  • None of the drugs will be subject to prior authorization or similar strategies.
  • Currently, SCAN members see co-pays ranging from about $30 to $50 for these drugs.
  • SCAN is using money that otherwise would have been booked as profits to offer the lower co-pays. Jhawar said the discounts won't require the insurer to cut back other benefits.

Of note: SCAN's policy will take effect even if the courts halt the Medicare drug price negotiation process.

  • "We feel strongly that these are medications that we should help older adults have better access to," Jhawar said.

The big question: Will lowering consumer costs for blockbuster heart and diabetes drugs end up lowering SCAN's total costs?

  • More than 20% of American seniors last year reported not taking their medication due to cost concerns. SCAN will measure how the total cost of care and outcomes change when price concerns are mitigated, Jhawar said.
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