the medicare part d program: a record of success · the medicare part d program: a record of...

SEPTEMBER 2016

The Medicare Part D Program: A Record of Success

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KEY TAKEAWAYS

More than 41 million Medicare beneficiaries receive their prescription drug coverage through the Medicare Part D program.

Part D beneficiaries can choose from a range of coverage options. Beneficiaries’ long-standing satisfaction with the program demonstrates the continued success of this approach.

Greater use of Part D plan management tools has proven effective at promoting the use of clinically appropriate, cost-effective medications and is critically important to maintain affordable coverage for beneficiaries. These practices are particularly important because of the increasing use of high-cost drugs, which threatens the continued affordability of the program for beneficiaries and taxpayers.

Summary Medicare Part D, the prescription drug program for Medicare beneficiaries, covers most medications – including biologics and vaccines – that are not otherwise covered by the Medicare Part A hospital benefit or the Medicare Part B benefit for physician services and supplies. Over the past 10 years, Part D has improved access to prescription drugs and reduced out-of-pocket costs for millions of beneficiaries. Today, more than 41 million seniors and individuals with disabilities are covered by private plans participating in the program, and enrollees are overwhelmingly pleased with their coverage and benefits. In a recent survey, nearly 90 percent of seniors said they were satisfied with the Part D program.1

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Program Basics

Enrollment

Enrollment in Medicare Part D is voluntary. Beneficiaries may elect Part D coverage when they become eligible for Medicare Part A or enrolled in Part B and change plans during the annual election period.2

Beneficiaries have several options to receive prescription drug coverage. They can choose to enroll in stand-alone prescription drug plans (PDPs) that only provide drug coverage or receive their prescription drug benefit through Medicare Advantage coverage or another private option. More than 60 percent of Part D beneficiaries are enrolled in stand-alone prescription drug plans. Almost 40 percent of Part D enrollment is in Medicare Advantage plans providing prescription drug coverage (MA-PD plans). The remaining Part D beneficiaries are enrolled in other types of

private plans – Cost Plans, Program of All-Medicare-Medicaid Plans for dual eligible.

16.8 17.4 17.4 17.6 18.6 19.822.5 23.4 24 24.7

7.1 8 9.1 9.810.5

11.5

12.613.8 14.7 15.7

0

5

10

15

20

25

30

35

40

45

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Enrollment in Part D by Plan Type (mil.), 2007-2016

PDP MA-PD Other

60.2%

38.2%

1.7%

Percentage of Part D Enrollees by Plan Type, July 2016

PDP MA-PD Other

Source: AHIP analysis of CMS enrollment data.

Source: AHIP analysis of CMS enrollment data.

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Part D enrollment has grown steadily during the past several years, from 24 million in 2007 to more than 41 million today. The number of beneficiaries enrolling in the Part D program now outpaces growth in the Medicare program as a whole. However, Part D enrollment has likely been affected by the growing number of beneficiaries in Medicare Advantage plans and a shift in coverage from employer-sponsored, non-Part D coverage into the program.3

Choices

Medicare beneficiaries are able to choose from an array of PDPs and MA-PD plans to help meet their specific health and financial needs. PDPs must offer coverage in all geographic areas within one or more of 34 Part D regions, which are no smaller than statewide and often include multiple states. With the exception of the territories, beneficiaries in all areas have at least 17 PDPs from which to choose (Appendix A)4, and 11 organizations operate national plans offered in nearly every state.5 MA-PD plans are also available to 99 percent of all Medicare beneficiaries as an option for Part D coverage.

Beneficiary Premiums

Premiums for the basic benefit are determined by the difference between the beneficiary’s plan bid and the national average monthly bid.

Beneficiaries enrolling in plans bidding below the national average pay lower premiums. Plans may also charge supplemental premiums for additional benefits, which may include lowering deductibles and/or other required cost sharing (including in the coverage gap). MA-PD plans may reduce Part D premiums with rebates from bidding below benchmarks for medical benefits.

Premiums are also means tested, meaning higher income beneficiaries pay more in premiums. Most individuals electing Part D coverage after the initial opportunity to enroll face penalties if they were not continuously enrolled in coverage with at least the same actuarial value as the Medicare Part D benefit prior to opting in to the program.

Scope of Benefits

Part D plans are required to provide coverage that is identical or at least actuarially equivalent to the “defined standard Part D benefit” consisting of:

• A deductible ($360 in 2016). • 25 percent cost sharing when the individual’s

total prescription drug spending (including out-of-pocket and covered costs) is between $360 and $3,310 (also known as the initial coverage limit).

• The so-called coverage gap (also known as

Year API Deductible Initial Coverage Limit

Catastrophic Threshold

2012 3.34% $320 $2,930 $4,700

2013 1.40% $325 $2,970 $4,750

2014 1.96% $310 $2,850 $4,550

2015 4.02% $320 $2,960 $4,700

2016 11.76% $360 $3,310 $4,850

2017 11.75% $400 $3,700 $4,950

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the “donut hole”) between the initial coverage limit and the catastrophic threshold (in 2016, when beneficiary out-of-pocket spending reaches $4,850). Initially beneficiaries were required to pay 100 percent cost sharing in the gap, but as noted below, the Affordable Care Act (ACA) and other legislation are phasing in changes that will eliminate the coverage gap.

• The higher of either 5 percent coinsurance or minimum copayments for generic ($2.95 in 2016) and brand-name ($7.40) drugs after beneficiaries reach the catastrophic threshold.

The thresholds for the deductible and the initial coverage limit and cost-sharing amounts in the catastrophic phase of the benefit increase annually by the percentage increase (API) in average expenditures for Part D drugs per beneficiary.6 The API has skyrocketed during recent years (see chart on previous page), a

period that corresponds with the introduction of new, high-cost medications. The large increases in the benefit thresholds, which cause beneficiaries to pay more out-of-pocket unless Part D plans provide supplemental coverage, are therefore directly related to the drug manufacturer pricing practices raising national concerns.

The ACA and other legislation close the coverage gap over several years such that the coinsurance rate will be 25 percent throughout the coverage gap by 2020. Prior to the ACA, beneficiaries were responsible for 100 percent of the costs incurred between the initial coverage limit and the catastrophic threshold. After the coverage gap is closed, beneficiaries will have a seamless coinsurance rate of 25 percent between their deductible and the catastrophic threshold (rather than having a higher coinsurance rate between the initial the coverage limit and the catastrophic threshold).

25%

30%

35%

40%

45%

45%

47.5%

47.5%

50%

50%

100%

25%

20%

15%

10%

5%

5%

2.5%

2.5%

50%

50%

50%

50%

50%

50%

50%

50%

50%

50%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2020

2019

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2017

2016

2015

2014

2013

2012

2011

2010

Closing the Coverage Gap: Brand-Name Drug Cost Sharing 2010-2020

Enrollee Plan Manufacturer

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The ACA also established the Coverage Gap Discount Program (CGDP) requiring drug manufacturers to fund a 50 percent discount for brand-name drugs in the gap.7 When fully implemented, the defined standard Part D benefit will provide seamless coverage after beneficiaries meet the deductible (see chart on previous page).

As noted above, Part D plans must offer benefits with an actuarial value of no less than the defined standard Part D benefit. Instead of offering the defined standard Part D benefit, plans generally provide “basic” Part D benefits (actuarially equivalent coverage) and many also cover supplemental benefits in addition.

Low-Income Subsidies

Medicare beneficiaries with incomes below 150 percent of the federal poverty level (FPL) pay reduced premiums and cost-sharing. Each year, CMS calculates an average bid amount for each Part D region. Individuals with incomes at or below the FPL are eligible for the Part D low-income subsidy (LIS) and are not required to pay premiums. CMS assigns beneficiaries at this income level to a PDP bidding below the regional benchmark if the individual has not elected a plan bidding above the benchmark. Since plan bids and regional benchmarks vary from year to year, it is possible an enrollee’s plan may fall below the benchmark in one year and above the next. CMS automatically reassigns beneficiaries facing this situation if an individual does not make an affirmative choice to remain in the plan and has not made an affirmative choice in the past.

The agency has taken several steps to mitigate the need for reassignment and permits Part D plans bidding within a de minimis amount ($2.00 in 2016) to retain LIS-eligible enrollees upon agreeing to accept the benchmark-based subsidy amount as reimbursement in full from the federal government.

The federal government also supports additional

coverage for low-income beneficiaries to defray Part D cost-sharing requirements. Medicare beneficiaries requiring an institutional level of care and eligible for full Medicaid benefits (“full dual eligibles”) do not pay Part D cost sharing, and others with incomes up to 150 percent of the FPL receive assistance with premiums and/or cost sharing on a sliding scale.

Federal Funding

The federal government provides several different types of payments to Part D plans.

• Direct Subsidy: Medicare Part D plans submit bids to CMS on an annual basis estimating costs of providing the basic benefit. By law, the federal government covers 74.5 percent of the national average bid amount for the basic benefit through “direct subsidy” payments. The direct subsidy is provided to Part D plans on a prospective, capitated basis each month. CMS operates a risk adjustment system to adjust direct subsidy payments to Part D plans for enrollees’ health care conditions.

• Reinsurance: The Medicare program covers 80 percent of all beneficiary costs after meeting the catastrophic threshold. CMS provides Part D plans with monthly amounts for reinsurance based on estimated costs included in plan bids, which are later reconciled to enrollees’ actual experience.

• LIS: Low-income Part D beneficiaries may not be required to pay premiums and cost sharing, or pay lower amounts. Similar to reinsurance, CMS provides plans with prospective subsidy payments to cover these costs based on plan estimates, which are later reconciled for actual experience.

• Risk Corridors: CMS and Part D plans share risk above or below specified thresholds to limit plans’ gains and losses. Federal law

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provides CMS discretion to set these thresholds. In 2016, Part D plans will remit to CMS amounts when gains are more than 5 percent and receive payments from the agency when losses are more than 5 percent. In recent years, Part D plans have generally remitted back to CMS more than amounts they received as a result of the risk corridors program.

Demonstrating Success

The Part D program is unique in that it relies solely upon private plans operating in a competitive market to lower costs and promote beneficiary satisfaction. The program’s track record demonstrates the success of this approach. Since its inception in 2006, Part D has proven to be extremely popular with enrollees and effective in improving affordability and access to the medications beneficiaries need. Evidence of this success includes:

• Low Beneficiary Premiums: Beneficiary premiums in the Part D program are demonstrating low rates of increase in recent years. According to CMS, the average Part D premium for basic Part D coverage is estimated to be $32.50 in 2016, very similar to 2015.8 CMS recently projected the average monthly premium would increase about $1.50 to $34 in 2017.9

• Better Health Outcomes: A 2014 study finds beneficiaries with Medicare Part D coverage on average experienced 8 percent fewer hospital admissions, incurred 7 percent lower Medicare expenditures, and used 12 percent fewer total resources than beneficiaries without Part D coverage, which is reducing costs to taxpayers by approximately $1.5 billion each year.10 The authors conclude, “In summary, our estimates suggest that gaining prescription drug insurance through Medicare Part D significantly reduced hospital admissions and hospital expenditures.”

$28.00 $30.00 $30.00 $30.00 $30.00 $31.00 $32.00 $32.50

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

2009 2010 2011 2012 2013 2014 2015 2016

Estimated Average Part D Premiums, 2009-2016

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• High Rates of Generic Utilization: Part D plans have effectively encouraged the use of clinically appropriate, low-cost generic drug products. The generic utilization rate increased from 61 percent in 2007 to 84 percent in 2013.11

• Beneficiary Satisfaction: Beneficiaries are highly satisfied with the Part D program and their Part D plan. A recent survey found that 88 percent of respondents were satisfied with the Part D program, 92 percent reported that their Part D plan is convenient to use and the program gives them peace of mind, and 86 percent said their Part D plan works well for them.12 High levels of satisfaction have been reported by low-income beneficiaries, dual eligibles, and beneficiaries with disabilities.

Use of Management Tools to Improve Care and Reduce Costs

Part D plans use tools and techniques that have proved successful in the commercial marketplace to provide clinically appropriate, cost-effective prescription drugs. These tools may include:

• Negotiation with Network Pharmacies: Most Part D-covered prescriptions are purchased by beneficiaries at pharmacies. Part D plans establish networks with community and mail-order pharmacies based upon payment terms and other conditions negotiated by the parties. Federal law requires Part D plans to allow “any willing pharmacy” accepting these terms and conditions to join the network. However, plans may provide beneficiaries with incentives (e.g., lower cost sharing) to go to pharmacies in preferred networks negotiating more competitive terms. A 2013 CMS report found preferred pharmacy networks significantly reduce costs for beneficiaries and taxpayers.13 The Kaiser Family Foundation found use of these networks by Part D plans has increased significantly, from plans enrolling 6 percent of PDP enrollees in

2011 to 81 percent in 2015.14

• Negotiation with Pharmaceutical Manufacturers: Part D plans also negotiate rebates and discounts with brand-name pharmaceutical manufacturers to reduce costs for beneficiaries and taxpayers in return for favorable placement on formularies (see below). The 2016 Medicare Trustees Report found Part D plans are negotiating significantly higher rebates now than at the program’s inception and are expected to continue to do so for the foreseeable future.15

• Other Tools and Techniques: Part D plans employ additional tools including formularies, step therapy, and tiered pharmacy benefit designs, to promote the use of the most appropriate, cost-effective medications. These plans rely on Pharmacy & Therapeutics (P&T) Committees consisting of physicians, nurse practitioners, pharmacists, and other experts that develop the clinical foundation for these management tools. Plans are required to have formulary and tiering exception processes in place to which a beneficiary can appeal to obtain a Part D drug not on the formulary, or obtain a formulary drug without regard to a utilization management restriction or at a lower tier, based on the medical necessity of the drug for that beneficiary. CMS also requires Part D plans to provide 90-day “transition fills” to new enrollees and individuals taking medications that are removed from the formulary or require a new prior authorization or step therapy process.

Section 1860D-11(h)(i) of the Social Security Act – the “non-interference” clause – prohibits CMS from dictating the terms of plan negotiations with manufacturers and pharmacies. The non-interference clause is crucial to the continuing success of the Part D program by permitting competitive market forces, instead of federal regulation and price controls, to reduce costs for beneficiaries and taxpayers.

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Key Issues and Challenges

These findings demonstrate the Part D program is fulfilling its promise to beneficiaries. However, more can be done to utilize Part D plan management tools that have proven effective in the private sector at promoting the use of clinically appropriate, cost-effective medications and maintaining affordability. These solutions are particularly important in the context of the increasing market presence of high-cost prescription drugs, which threaten the continued affordability of the program for beneficiaries and taxpayers.

Barriers to Expanding Use of Plan Tools to Increase Access and Reduce Costs

There are several barriers to expanding the use of health plan tools in the Part D program. For example, CMS has interpreted the statute to require Part D plans to cover at least two drugs in each pharmaceutical class, which limits the ability of Part D plans to negotiate larger rebates with pharmaceutical manufacturers in classes with multiple products of similar therapeutic value. Part D plans are also required to cover “all or substantially all” drug products in six classes of clinical concern, which include medications where plan management techniques could be better utilized to improve care and reduce costs. Part D plans must cover off-label drug uses determined appropriate by specified prescription drug compendia, even though these entities – with the exception of compendia for oncology drugs – are not required to meet conflict of interest and transparency standards. Elimination of these and other barriers described below, especially in the context of the new influx of high-cost drugs in the market, would support the continued affordability of the Part D program.

High-Cost Drugs

Spending on prescription drugs continues to accelerate as a result of drug manufacturer

pricing practices. The impending threat to the continued affordability of the Medicare Part D program for beneficiaries and taxpayers is clear. According to the 2016 Medicare Trustees Report:

For 2015, per capita benefits increased faster than they had historically because of price increases for brand-name drugs and the significant amount of 2014 reconciliation payments by Medicare for the unexpected use of the new hepatitis C drugs. These per capita benefits are projected to remain high in 2016 due to the continuing growth in cost for specialty drugs… In the future, the per capita drug cost growth rate is expected to exceed the rate of increase in other categories of medical spending due to an expected slowing of the trend toward greater generic usage and a continuing increase in the use and price of specialty drugs.16

Other research is finding similar results. A bipartisan report from the Senate Finance Committee found Medicare Part D costs for hepatitis C drugs have increased “more than six-fold” since the introduction of new high-cost, breakthrough drugs on the market.17 A recent Avalere study18 finds Medicare spending on just 10 drugs is estimated to reach more than $30 billion in the next 10 years.

CMS Acting Administrator Andy Slavitt recently stated he is “increasingly concerned about the rising cost of drugs, especially high-cost specialty drugs, and the impact of these costs on the Medicare program.”19 Action is needed to ensure the Medicare Part D program remains sustainable for years to come. A recent AHIP letter to Sens. Grassley and Wyden provides a blueprint to better leverage private plan techniques to keep the program affordable, as summarized below:

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• Part D Plan Tools: As noted above, additional flexibility is necessary to allow Part D plans to make formulary changes during the plan year as new information becomes available. Existing CMS policies permit these changes when they are “positive,” or adding to the scope of coverage, but limit Part D plans from establishing additional management tools during the plan year except when safety issues are identified. Part D plans should be able to use techniques proven effective in the commercial market when new information on the value of prescription drugs is uncovered.

• Compendia Reform: Part D requires coverage for medically acceptable indications of prescription drugs supported by one or more citations included or approved for inclusion in specified compendia. However, conflict of interest limitations only apply to compendia reviewing anti-cancer drugs. Standards are not in place for compendia determining appropriate uses for other Part D drugs or for the organizations setting guidelines for off-label use on which these compendia often rely. These compendia should disallow individuals that have financial relationships with a pharmaceutical manufacturer or other relevant party from participating in decisions involving that entity. The decision-making processes for these organizations should be public and include opportunities for outside entities to provide input.

• Value-Based Arrangements: CMS should identify and address potential barriers to establishing value-based arrangements between plans and manufacturers. For example, we understand many of these arrangements include rebates for performance over a multi-year period. However, the Part D plan bidding tool does not permit the reporting of multi-year rebates to determine allowable costs, and the application of Medicaid Best Price rebate requirements may also dampen rebates

necessary to develop these arrangements. CMS, Part D plans, and other stakeholders should engage in a collaborative process to identify barriers to value-based arrangements and steps to address them.

• Increased Transparency: We also strongly support increased transparency by pharmaceutical manufacturers to promote a greater understanding of their true costs. This could include requiring manufacturers to report their research and development costs for each individual prescription drug product on www.medicare.gov as a condition of coverage in the Part D program.

Other Issues

There are a number of other issues of importance to Part D plans, which include:

• Reinsurance: The federal government funds 80 percent of all Medicare Part D costs for beneficiary expenses above the catastrophic thresholds through reinsurance payments to Part D plans. The Medicare Payment Advisory Commission (MedPAC) has found these federal reinsurance payments are increasing by more than 15 percent per year and suggested the reinsurance percentage could be reduced to as much as 20 percent with plans taking on greater risk for these costs. AHIP is concerned this proposal would likely increase beneficiary premiums without addressing the real reason for the growth in federal reinsurance costs: drug manufacturer pricing practices and the increasing use of high-cost drugs. The solutions cited above are more likely to be effective while continuing to take advantage of the private plan practices that have kept beneficiary premiums under control.

• Medication Therapy Management: Federal law requires Part D plans to operate medication therapy management (MTM)

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programs targeted at beneficiaries with monthly prescription drug costs above a specified threshold. Part D plans strongly support MTM programs, which have been commonly used in the commercial marketplace and public programs to promote better compliance with prescription drug therapies. A new demonstration project to begin in 2017 in several states will promote greater Part D plan flexibility to focus these programs on beneficiaries most in need of additional assistance complying with their prescription drug regimens. AHIP supports the expansion of this flexibility nationwide to ensure beneficiaries across the country can best take advantage of these reforms.

• Prescriber Enrollment: A CMS rule originally released in 2014 allows Part D plans to cover drugs only when prescribed by health care professionals who have enrolled with the agency as Medicare participating providers (or who have formally opted out of the Medicare program). CMS has delayed the requirement several times, most recently until February 2017, to allow for the development of technical guidance and processes as well as accommodate significant CMS and plan outreach efforts designed to increase prescriber enrollment. While AHIP understands CMS’ goal to promote better oversight and less fraud in the program, we continue to have concerns about this rule, including: 1) the administrative complexities for accurately applying this requirement at point of sale, and 2) the likelihood of

beneficiary confusion and denials of covered drugs given that substantial numbers of professionals have yet to enroll despite outreach efforts. We believe it is very unlikely these concerns will be adequately addressed by the February 2017 deadline.

• Administrative Simplification: Part D plans have raised concerns about the dizzying pace and array of ongoing changes by CMS affecting plan operations. The agency issues new directives to plans on an almost daily basis requiring action from plans and diverting attention from care delivery and improvement. AHIP will be working with member plans to develop proposals to simplify the program without reducing CMS’ important oversight role.

• Part D Employer Group Waiver Plans (EGWPs): PDPs may develop benefit packages tailored to employer groups and limit enrollment to retirees associated with these groups. As of May 2016, 4.6 million beneficiaries were enrolled in Part D EGWPs, approximately 11 percent of all Part D enrollees and almost 19 percent of PDP enrollment. The number of beneficiaries in Part D EGWPs has declined slightly, by about 2 percent, since May 2015. Unlike non-EGWP Part D plans, Part D EGWPs do not submit bids. Instead these plans receive federal direct subsidy and reinsurance payments and negotiate beneficiary premiums with contracting employer groups.

Conclusion

The Medicare Part D program is demonstrating the success of relying on private plans to promote better access to affordable health care services. Policymakers should focus on changes to the program that would take better advantage of private plan techniques responsible for this success while working with plans to address drug manufacturer pricing policies threatening the continued affordability of Part D coverage for beneficiaries and taxpayers.

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Appendix A:

State Number of PDP Options in 2016 Alabama 25 Alaska 17 Arizona 24 Arkansas 24 California 26 Colorado 24 Connecticut 24 Delaware 22 Florida 20 Georgia 25 Hawaii 19 Idaho 26 Illinois 26 Indiana 26 Iowa 24 Kansas 23 Kentucky 26 Louisiana 23 Maine 25 Maryland 22 Massachusetts 24 Michigan 26 Minnesota 24 Mississippi 22 Missouri 26 Montana 24 Nebraska 24 Nevada 26 New Hampshire 25 New Jersey 23 New Mexico 25 New York 20 North Carolina 24 North Dakota 24 Ohio 25 Oklahoma 25 Oregon 24

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State Number of PDP Options in 2016 Pennsylvania 27 Puerto Rico 6 Rhode Island 24 South Carolina 25 South Dakota 24 Tennessee 25 Texas 26 Utah 26 Vermont 24 Virginia 26 Washington 24 Washington D.C. 22 West Virginia 27 Wisconsin 25 Wyoming 24

Related Topic

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1 Morning Consult for Medicare Today, “Ten Years After Implementation,

Nearly Nine in 10 Seniors are Satisfied with Part D” (July 2016).

2 Beneficiaries may also be allowed special enrollment periods under

specific circumstances (e.g., loss of employer-sponsored care, change in

residence).

3 See the 2015 Medicare Trustees Report, page 140.

4 AHIP analysis of CMS data. Does not include plans under sanction.

5 Kaiser Family Foundation, “Medicare Part D: A First Look at Plan

Offerings in 2016” (October 2015).

6 The out-of-pocket threshold also increases by the API except in years

2016-2019, when it grows by the lower of the API or two percentage

points plus the annual percentage increase in the consumer price index.

7 The Social Security Act does not subject biosimilar products to the

CGDP.

8 CMS Press Release, “Medicare drug premiums projected to remain

stable” (July 29, 2015).

9 CMS Press Release, “Medicare projects relatively stable average

prescription drug premiums in 2017” (July 29, 2016).

10 Kaestner, Robert et. al. “Effects of Prescription Drug Insurance on

Hospitalization and Mortality: Evidence from Medicare Part D.” National

Bureau of Economic Research Working Paper 19948. Found at:

http://www.nber.org/papers/w19948

11 Medicare Payment Advisory Commission, Report to the Congress:

Medicare Payment Policy (March 2016).

12 Morning Consult for Medicare Today, “Ten Years After Implementation,

Nearly Nine in 10 Seniors are Satisfied with Part D” (July 2016).

13 CMS Part D Claims Analysis: “Negotiated Pricing between Preferred

and Non-Preferred Pharmacy Networks,” April 30, 2013.

14 The Kaiser Family Foundation, “Fact Sheet: The Medicare Part D

Prescription Drug Benefit” (October 2015). Found at:

http://kff.org/medicare/fact-sheet/the-medicare-prescription-drug-benefit-

fact-sheet/

15 See 2016 Medicare Trustees Report, Table IV.B8, p. 147.

16 2016 Trustees Report, p.108.

17 The Price of Sovaldi and Its Impact on the U.S. Health Care System.

Prepared by the Staffs of Ranking Member Ron Wyden and Committee

Member Charles E. Grassley (December 2015), p. 92.

18 Avalere, “The Future Cost of Innovation: An Analysis of the Impact of

Breakthrough Therapies on Government Spending”, June 2015.

19 CMS Press Release, “Medicare projects relatively stable average

prescription drug premiums in 2017” (July 29, 2016).

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