Providing Seniors Financial Relief for Medicines in the Post-COVID Dawn

COVID-19 has highlighted the health challenges of America’s seniors — hitting them harder than the rest of the population. But the pandemic obscured public policy reforms needed to help older adults afford the care they need, beyond the coronavirus. As we work together to make progress towards a post-pandemic dawn, it is time for Congress to address this irony and to ease the ongoing financial burden that many of our seniors face for the medicines they need.

Many low- and fixed-income seniors received the federal relief payments issued in the last year. At the same time, older Americans, like all of us, are benefiting from COVID-19 vaccines at no cost. Although retired adults may not have suffered the financial impacts of the pandemic as acutely as some younger people in the workforce, this may skew another reality, which is that too many seniors — especially those who are battling severe diseases — struggle to pay for their medicines.

Nearly 1 in 4 seniors said their out-of-pocket costs for medicines were a problem in a survey taken just before COVID-19 hit. More recent data show nearly a third of those on Medicare now worry about the total costs they will have to pay for their prescription drugs.

These costs take two major forms: First, beneficiaries in Medicare Part D often face significant cost sharing, particularly for specialty medicines that treat serious diseases and conditions. Second, the structure of the Part D program can concentrate large costs at the beginning of a plan year — a big problem for people living on fixed incomes. For example, studies found that Part D beneficiaries with rheumatoid arthritis, multiple sclerosis and chronic myeloid leukemia incur 25 to 40 percent of their out-of-pocket costs in the first month of treatment.

This is the real-world experience of seniors enrolled in Medicare Part D, which comes on top of managing the overall complexity of the health care system. Like many people, I did not fully appreciate this complexity — until my father received a head and neck cancer diagnosis several years ago and I became one of his caregivers. Coordinating and navigating his care was challenging given that there’s not a roadmap and support was limited. In a situation like my dad’s, the last thing anyone needs is to worry about how they will be able to afford their medicines.

Accumulating research shows that the financial burden makes health outcomes worse. High out-of-pocket costs are among the reasons people give for not taking prescribed medicines or for splitting doses. Such “adherence” failures lead to more than 125,000 deaths every year. In the words of a study by the National Bureau of Economic Research and Harvard University economists, “small increases in cost cause patients to cut back on drugs with large benefits, ultimately causing their death.”

These real-world perspectives are ones that policymakers should heed if they want to truly help seniors. Too often, policy discussions focus on the list prices of prescription drugs in the United States, which no Medicare beneficiary actually pays, or call for government price-setting of drugs that would disincentivize future research and development and limit access to new therapies.

Taking the patients’ view instead, three policy reforms could ease the financial burden substantially while preserving a system that values continued medical progress.

First, a legislated cap on annual out-of-pocket drug costs for seniors is an overdue improvement to the Part D program — serving to minimize the financial burden regardless of a patient’s health status. Second, it is time for what some call “smoothing” of costs evenly over the course of a year, most likely through the option of installment payments after beneficiaries have reached their deductibles and initial coverage.

Finally — and extending beyond seniors to all Americans — it is long past time that the rebates and discounts drug companies negotiate with insurers get passed along to lower patients’ costs.

Medicare Part D has been a tremendous success. However, when the benefit was created more than 15 years ago, it was designed to fit the drugs on the market at that time, which were mainly therapies for chronic conditions. We’ve since advanced the science and patients with serious conditions can now be treated with complex specialty medicines available at the pharmacy counter.

Part D needs to evolve to keep pace with today’s science — without sacrificing tomorrow’s advances. These policy changes would provide seniors financial relief that is tangible and targeted: qualities that have the potential to earn bipartisan endorsement.


Mark Reisenauer is president of Astellas Pharma US.

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