Medicare Part D Prescription Drug Cost Analysis: Shocked and Disillusioned (Part 2) – TheStreet

What happens when you have a specialty drug? And what are the differences between a brand-name drug versus its generic version?
Referring back to Part 1 of this Medicare Part D analysis, you saw how wildly the cost of generic drugs could swing based on the pharmacy you use. If you don’t know your pharmacy is OON (out-of-network)—and how would you know?—you might not think to check other options in your area.
Marcia Mantell
That is a critical misstep that’s easy to make when you’re getting into Medicare. Or when re-shopping your drug plan every year between October 15th and December 7th.
Continuing the analysis in this Part 2 article, let’s look at what happens when you have a specialty drug added to the mix as well as differences between a brand-name drug versus its generic version.
Case 2: Adding a specialty, tier 5 drug
With so many drug ads running on TV, you know the specialty drugs by name. Dupixent is one of the names that sticks with me. (I do not use, nor have ever used this drug. I have nothing against this or any brand-name, heavily advertised drug. They are important for those who need them to manage a health issue. For this analysis, I was simply looking to add a specialty drug to see the implications to cost. Dupixent was the first heavily advertised drug that came to mind.)
Dupixent is prescribed for those with moderate-to-severe atopic dermatitis (eczema), asthma, and chronic rhinosinusitis with nasal polyposis (CRSwNP). It is an additional medication prescribed to improve these conditions.
Using the exact same generic blood pressure medications as in Case 1, and “adding another drug” in Medicare’s plan finder tool, the following topline results pop up with Dupixent in the mix:
Looking at the details, three shocking situations revealed.
It is critical to look into the plan details, even if you think you will select the first Part D plan in the list. That one is the overall lowest cost option for your prescriptions plus premium. But there is more to the story:
With these two generics in the lowest cost tier 1, these cost swings are a red flag. They highlight the gamesmanship going on behind the scenes.
If the cost of a generic drug can increase 10x at the same preferred, in-network pharmacy, what else is going on that a consumer can’t see?
Case 4: Brand-name vs. generic
Due to the way drug patents work, new drugs come out with an exclusive brand-name. It takes years before a generic can be offered as an alternative. One such example is Lipitor and its generic twin, Atorvastatin. I did further analysis to determine if there is much of a difference between the same drug that carries two different names.
Turns out, in Plymouth County, MA, it makes a $3,314 per year difference. You can pay $12 for the year for generic Atorvastatin or $3,326 for brand-name Lipitor at a preferred, in-network pharmacy.
But, with more digging for information in the tool I found that if your favorite pharmacy is classified as a standard, in-network, Lipitor costs two dollars ($2) more, at $3,328. But Atorvastatin has jumped from $12/year to $228/year.
And, if your pharmacy of choice is out-of-network, you wouldn’t know it by the price of Lipitor. It’s the cheapest option available at $3,322. But, your $12 Atorvastatin is now a walloping $2,035!
None of the pharmacies cover Lipitor, so you are paying the retail price. The generic twin is the only covered option.
Surprisingly, it turns out this cost story is not about brand vs. generic. It’s really about the hidden cost of your generic drug based on the pharmacy’s status. And, you won’t know the status unless you know to look. There is nothing about choosing Part D plans that makes sense for consumers.
Tips for navigating consumer-driven health insurance
The bottom line with this analysis: I was looking for reasonable rules of thumb or guidelines to offer when slogging through the Medicare maze. Or even some directions we could follow to figure out consistently the best Part D plan offering the lowest costs. Consumers are supposed to own their health care costs in this consumer-driven health environment, but complexity and opacity prevent success. There is nothing about choosing Part D plans that makes sense for consumers. However, here are five helpful hints to ease the frustration:
Sadly, I come away from this stage of the analysis more disillusioned than ever. While it is up to each individual to get involved with their health plans and find the lowest costs of drugs, I didn’t expect to have to dig so deep. It’s easy to miss important facts. Thankfully, Medicare’s plan finder is an excellent tool. Unfortunately, the results are unexpected, unexplainable, and costly.
In Part 3 of this series, you’ll get a look into the costs of heavily advertised drugs. Sticker shock is the name of the game.
Marcia Mantell, RMA® is the founder and president of Mantell Retirement Consulting, Inc., a retirement business development, marketing & communications, and education company supporting the financial services industry, advisors, and their clients. She is author of “What’s the Deal with Retirement Planning for Women,” “What’s the Deal with Social Security for Women” and blogs at BoomerRetirementBriefs.com.

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