Out-of-pocket costs for Medicare beneficiaries taking oral chemotherapy drugs are high. Furthermore, despite changes in cost sharing due to the Affordable Care Act, those costs will remain high. These findings are reported in a study published online ahead of print in the Journal of Clinical Oncology.1

Oral chemotherapy drugs are among the fastest growing components of cancer care, but the innovative therapies represent a shift away from physician-administered medication. Insurers’ classification of these therapies has also shifted from medical benefits to outpatient pharmacy benefits, which has important cost implications for many patients, especially Medicare beneficiaries.

Medicare Part D is the prescription drug coverage arm of Medicare, and it is offered through private health insurance. Patients with these plans incur a prescription-drug coverage gap known as the doughnut hole. Beneficiaries are covered up to $2960 in prescription drug costs; then a cost sharing of 100% of drug costs goes into effect until they reach $4700 in out-of-pocket costs. The Affordable Care Act will close that coverage gap, reducing cost sharing to 25% in 2020; however, the impact of these changes on out-of-pocket costs is unclear.

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Using the Medicare July 2014 Prescription Drug Plan Formulary, Pharmacy Network, and Pricing Information Files from the Centers for Medicare & Medicaid Services (CMS) for more than 3000 prescription drug formularies (1114 stand-alone and 2230 Medicare Advantage), the researchers identified oral cancer therapies and summarized drug costs, cost-sharing designs, and estimated out-of-pocket costs for beneficiaries without low-income subsidies who take a single drug before and after the doughnut hole closes.

Across plans and products, the researchers saw little variation in the formulary design. Annual out-of-pocket costs for a typical treatment regimen ranged from $6456 for dabrafenib to $12 160 for sunitinib in 2010, with an average price of $10 060 for a 30-day supply of an oral anticancer medication. The study findings indicate beneficiaries’ costs will be approximately $2550 less after the ACA changes close the doughnut hole.

The researchers calculations for their base case analysis were made with the assumption that prices would not change from 2010 to 2020. To determine the potential impact of 2020 costs, they varied drug prices by ±50% to estimate 2020 drug prices. A 50% decline in prices would result in average out-of-pocket costs for beneficiaries of $3738, a savings of $4468 in 2020 compared with 2010 costs. However, if prices increase by 50%, average out-of-pocket costs would be $7584, a savings of only $621 compared with 2010 costs.

Almost no variation in plan costs and formularies translates to few options for patients to improve their financial burden should they need oral chemotherapeutic agents, especially Medicare Part D beneficiaries who are not eligible for low-income subsidies.

“Efforts should be made to improve affordability of specialty drugs for Medicare beneficiaries given that medication nonadherence and a forgoing of basic needs are associated with high out-of-pocket medication costs,” the researchers conclude.


Dusetzina SB, Keating NL. Mind the gap: why closing the doughnut hole is insufficient for increasing Medicare beneficiary access to oral chemotherapy [published online ahead of print December 7, 2015]. J Clin Oncol. doi:10.1200/JCO.2015.63.7736.