How specialty drugs are acquired / Medicare

HCP role in the process

Out-of-pocket example

HCP roles in each process for patients with Medicare insurance


Buy-and-bill (Medicare Part B)1

Specialty pharmacy (Medicare Parts C and D)

ASP, average sales price; BI, benefits investigation; HCP, health care professional; MAPD, Medicare Advantage prescription drug plan; PA, prior authorization; PDP, prescription drug plan; SP, specialty pharmacy; WAC, wholesale acquisition cost.

*Patients with Medicare Advantage (Medicare Part C, Medicaid, or other public insurance coverage) may require precertification or prior authorization as conditions for coverage.

Timing approximate and may vary.

The HCP will need to store and track drug inventory.

§Sequestration applies. 2% reduction to the Medicare allowable.

Since the drugs will be labeled with the patient's name, a separate inventory to manage patient-specific treatments may have to be created and maintained.


Specialty pharmacy (Medicare Parts C and D)2

Specialty pharmacy (Medicare Parts C and D)

ASP, average sales price; BI, benefits investigation; HCP, health care professional; MAPD, Medicare Advantage prescription drug plan; PA, prior authorization; PDP, prescription drug plan; SP, specialty pharmacy; WAC, wholesale acquisition cost.

*Patients with Medicare Advantage (Medicare Part C, Medicaid, or other public insurance coverage) may require precertification or prior authorization as conditions for coverage.

Timing approximate and may vary.

The HCP will need to store and track drug inventory.

§Sequestration applies. 2% reduction to the Medicare allowable.

Since the drugs will be labeled with the patient's name, a separate inventory to manage patient-specific treatments may have to be created and maintained.


Patient out-of-pocket (OOP) costs

Medicare Part B – 20224,5

  • $233 deductible per year, 20% coinsurance cost

  • Supplemental insurance may cover some or all of the 20% coinsurance

MA plans5

  • 34% of Medicare patients have MA; co-pay and coinsurance vary based on the type of plan

  • OOP maximum limits ranged from $0 to $6700 in 2018

Medicare Part D – 20226

  • Up to $480 deductible

  • Co-payment or coinsurance

  • Coverage gap

    • 25% of costs if total drug costs are between $4430 and $7050 ("donut hole")

    • 5% of cost after

Extra Help (Low-Income Subsidy)6

  • Assistance for Medicare recipients below poverty line

  • Main benefit is low OOP costs

PDP or MAPD plans6

  • Co-pay and coinsurance vary based on the type of plan

  • May require high deductibles, co-pay/coinsurance

Click here to learn more about the programs some manufacturers may offer to support patients.

References: 1. Fein AJ. Accessed June 21, 2020. https://www.drugchannels.net/2016/10/follow-vial-buy-and-bill-system-for.html 2. McCain J. Biotechnol Healthc. 2012;9(2):8-13. 3. CSI Specialty Group. Accessed June 22, 2020. https://academynet.com/sites/default/files/csi2019spreport.pdf 4. Medicare.gov. Accessed June 3, 2021. https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance 5. Kaiser Family Foundation. Accessed June 21, 2020. http://files.kff.org/attachment/issue-brief-an-overview-of-medicare 6. Kaiser Family Foundation. Accessed June 2, 2021. https://www.kff.org/medicare/fact-sheet/an-overview-of-the-medicare-part-d-prescription-drug-benefit/

References: 1. Fein AJ. Accessed June 21, 2020. https://www.drugchannels.net/2016/10/follow-vial-buy-and-bill-system-for.html 2. McCain J. Biotechnol Healthc. 2012;9(2):8-13. 3. CSI Specialty Group. Accessed June 22, 2020. https://academynet.com/sites/default/files/csi2019spreport.pdf 4. Medicare.gov. Accessed June 3, 2021. https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance 5. Kaiser Family Foundation. Accessed June 21, 2020. http://files.kff.org/attachment/issue-brief-an-overview-of-medicare 6. Kaiser Family Foundation. Accessed June 2, 2021. https://www.kff.org/medicare/fact-sheet/an-overview-of-the-medicare-part-d-prescription-drug-benefit/


EXAMPLE

Out-of-pocket costs for patient with Medicare coverage

EXAMPLE DRUG WHOLESALE ACQUISITION COST (WAC) PER TREATMENT IS $1000


Buy-and-Bill icon

Buy-and-bill

under Medicare Part B
(fee-for-service)

Buy-and-Bill icon

Medical
benefit1

Example
based on
recent costs*

Benefit
coverage


Specialty Pharmacy icon

Specialty
pharmacy

under 2022 Medicare Part D benefit design

Specialty Pharmacy icon

Pharmacy
benefit2

$0-$233

Deductible

$480

20% ($200)

Coinsurance
(initial coverage + donut
hole)

25%†, ‡

n/a

Catastrophic coverage

5% of cost after total
OOP threshold is met

Supplemental
insurance
covering
50% of
coinsurance
(-$100)

Other coverage

n/a

$100-$333

Total patient OOP

$610

Data for benefit design based on 2022 Medicare cost data. This information is provided for educational purposes only and the costs presented are a hypothetical example based on the first prescription of a new benefit year. Coverage, reimbursement, and patient costs may vary significantly by payer, plan, patient, and setting of care.

*Supplemental coverage may cover up to 100% of the remaining OOP costs.

Coinsurance payment may need to be collected prior to administration.

Applicable to non–low-income subsidy patients only.

References: 1. Medicare.gov. Accessed June 3, 2021. https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance 2. Q1Medicare. 2022 Medicare Part D outlook. Accessed December 28, 2021. https://q1medicare.com/PartD-The-2022-Medicare-Part-D-Outlook.php.

References: 1. Medicare.gov. Accessed June 3, 2021.
https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance 2. Q1Medicare. 2022 Medicare Part D outlook. Accessed December 28, 2021. https://q1medicare.com/PartD-The-2022-Medicare-Part-D-Outlook.php.

EXAMPLE

Out-of-pocket costs for patient with Medicare coverage

EXAMPLE DRUG WHOLESALE ACQUISITION COST (WAC) PER TREATMENT IS $1000


Buy-and-Bill icon

Buy-and-bill

under Medicare Part B
(fee-for-service)

Buy-and-Bill icon

Medical
benefit1

Example
based on
recent costs*

Benefit
coverage


Specialty Pharmacy icon

Specialty
pharmacy

under 2022 Medicare
Part D benefit design

Specialty Pharmacy icon

Pharmacy
benefit2

$0-$233

Deductible

$480

20% ($200)

Coinsurance
(initial coverage + donut
hole)

25%†, ‡

n/a

Catastrophic coverage

5% of cost after total
OOP threshold is met

Supplemental
insurance
covering
50% of
coinsurance
(-$100)

Other coverage

n/a

$100-$333

Total patient OOP

$610

Data for benefit design based on 2022 Medicare cost data. This information is provided for educational purposes only and the costs presented are a hypothetical example based on the first prescription of a new benefit year. Coverage, reimbursement, and patient costs may vary significantly by payer, plan, patient, and setting of care.

*Supplemental coverage may cover up to 100% of the remaining OOP costs.

Coinsurance payment may need to be collected prior to administration.

Applicable to non–low-income subsidy patients only.

References: 1. Medicare.gov. Accessed June 3, 2021. https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance 2. Q1Medicare. 2022 Medicare Part D outlook. Accessed December 28, 2021. https://q1medicare.com/PartD-The-2022-Medicare-Part-D-Outlook.php.

References: 1. Medicare.gov. Accessed June 3, 2021.
https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance 2. Q1Medicare. 2022 Medicare Part D outlook. Accessed December 28, 2021. https://q1medicare.com/PartD-The-2022-Medicare-Part-D-Outlook.php.

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