Prasanna Parthasarathy is the CEO of Medvantx, a non-commercial dispensing pharmacy.
The cost of healthcare, and especially the cost of prescription medications, has long been a political lightning rod with many reform proposals and industry wrangling.
Despite various reform initiatives, including the passage of the not-yet-fully-implemented Inflation Reduction Act (IRA) in 2022, 28% of U.S. adults have difficulty affording prescription medications. Additionally, 31% of U.S. adults reported that in the past 12 months, they hadn’t taken their medications as prescribed due to cost, and 82% of U.S. adults believe that the price of prescription drugs is unreasonable.
The IRA aimed to improve medication affordability.
Drug pricing-related provisions in the IRA are concentrated on reducing costs to the Medicare population. However, this attempt to curb rising prices has potential implications for future pharmaceutical innovation, and some pharmaceutical manufacturers and other opponents of the legislation have expressed concerns about increasing government regulations in healthcare.
One change, coming in 2025, is the second phase-in of a reduced out-of-pocket maximum for prescription drug costs within Medicare Part D plans from up to $7,500 in 2023 to $2,000 in 2025. In addition, Medicare beneficiaries will have the option to reduce the effect of the so-called “donut hole” and spread out-of-pocket cost across the calendar year (rather than incurring the full out-of-pocket cost early in the year).
Another change will enable CMS (the government agency that oversees the Medicare program), to negotiate the prices of popular drugs directly with manufacturers, potentially reducing the price the government and Medicare patients pay for these medications. The program will start with 10 drugs in 2026 and expand in the following years.
While these changes have the potential to make medications more affordable for Medicare patients, they do nothing to reduce costs for non-Medicare patients. In fact, some patients who are currently low-income subsidy (LIS) beneficiaries may face higher out-of-pocket costs. Additionally, continued squeezing of payers in the Medicare PDP market will likely have downstream consequences in broader commercial plans.
Collectively, these policies could reduce research and development investment focusing pharmaceutical manufacturers’ interest on high-value indications (over niche products, such as treatments for rare diseases that sometimes win approval as follow-on indications). Some industry watchers see these changes as having negative consequences for innovation and vulnerable patient populations.
How can pharmaceutical manufacturers facilitate patient access?
These changes mean that pharmaceutical manufacturers may need new models to maintain sustainable businesses and support patients who cannot afford their medications (both Medicare beneficiaries and others). Patient assistance programs, bridge or quick start programs and cash pay models may offer avenues to achieve these objectives. (Disclosure: My company specializes in these programs, as do others.)
According to Census Bureau data, 36.8 million Americans lived in poverty in 2023. For these patients, out-of-pocket costs for prescription drugs may be out of reach. Even for patients in this group enrolled in Medicare Part D, reduced out-of-pocket costs may still be too high.
The corporate foundations of many major pharmaceutical companies offer patient assistance programs to provide free medications to some in these populations, but learning about and enrolling in these programs can be a barrier for some patients. (Some organizations are focused on connecting patients with such programs, but the industry could do more to fund and build awareness of patient assistance programs’ ability to support uninsured patients and insured patients who still can’t afford their medications.)
For insured patients whose insurance does not cover their medication, pharmaceutical manufacturers can offer bridge or quick start programs to bridge the gap while patients wait for prior authorization or appeal noncoverage decisions. Such programs can be a lifeline for patients who don’t have the funds needed to pay for prescriptions out of pocket while waiting for coverage to kick in.
Finally, pharmaceutical companies looking to serve a broader range of patient situations can consider leveraging cash pay models to smooth the path for patients to access medications, potentially at a discount from list-prices.
In the highly regulated pharmacy space, implementing such programs requires robust regulatory compliance and medical affairs capabilities to be able to administer compliant patient assistance, bridge, quick start and cash pay programs, as well as digital and supply-chain infrastructure needed to support evolving regulations and patient expectations.
What best practices should companies follow?
When implementing patient assistance, access and discounting programs, pharmaceutical manufacturers must work with their pharmacy partners to scope programs with clear priorities about which patient populations they want to serve. Pharmaceutical manufacturers should also have long-term intention, ensuring that patients being treated with medications made available to them through a patient assistance program don’t have gaps resulting from programmatic changes.
Mail order pharmacies and the pharmacists who staff them are subject to the same quality, safety and compliance regulations as other pharmacies, and have the same responsibility to provide medication-related counseling and service.
For cash pay products, understand that patients often expect an “omnichannel” portal experience, with easy clinician telehealth interaction, secure payment, clear communication and rapid medication delivery. Such programs can also help patients whose medications aren’t going to be covered by insurance (such as weight loss medications, sexual health products, and dermatological care) access these medications more quickly and easily.
All changes to health policy create market disruption. Focus on creating robust programs to support patients who fall through cracks in the healthcare system in order to facilitate patient access amid times of change.
Change is afoot in healthcare policy.
The health policy landscape is always shifting, and with a new administration coming to power in January 2025, more changes may be coming to patients and the pharmaceutical industry. This year will be a year of change and education of all stakeholders—patients, providers, manufacturers and payers.
Amid this changing landscape, new models of serving patients can help vulnerable populations continue to access medications and can support pharmaceutical manufacturers looking to accelerate product adoption. Further, pharmacies will continue to play a critical role as an intermediary between patients, their healthcare teams and the pharmaceutical industry, helping to fill prescriptions and promote patient access.
