CMS: Part D drug rebates/price concessions raise beneficiary costs, subsidies

Manufacturer rebates and other price concessions reported by Medicare Part D prescription drug plans after the point-of-sale grew about 22% annually between 2010 and 2015, contributing to higher beneficiary cost-sharing and Medicare subsidy payments, according to a report released last week by the Centers for Medicare & Medicaid Services. While this direct and indirect remuneration may hold down total program expenses and beneficiary premiums, it does not reduce the cost of drugs for beneficiaries at the point-of-sale, CMS said. “As the growth of rebates and other price concessions places more of the burden on beneficiary cost-sharing, Medicare’s costs for these beneficiaries also grow,” the agency adds. “Higher beneficiary cost-sharing also results in the quicker progression of Part D enrollees through the Part D drug benefit phases and potentially leads to higher costs in the catastrophic phase, where Medicare liability is generally around 80%.”