In-gap discounts in medicare Part D and specialty drug use

Jeah Jung, Wendy Yi Xu, Chelim Cheong

Research output: Contribution to journalArticlepeer-review

8 Scopus citations


OBJECTIVES: Specialty drugs can bring significant benefits to patients, but they can be expensive. Medicare Part D plans charge relatively high cost-sharing costs for specialty drugs. A provision in the Affordable Care Act reduced cost sharing in the Part D coverage gap phase in an attempt to mitigate the financial burden of beneficiaries with high drug spending. We examined the early impact of the Part D in-gap discount on specialty cancer drug use and patients' out-of-pocket (OOP) spending. STUDY DESIGN: Natural experimental design. METHODS: We compared changes in outcomes before and after the in-gap discount among beneficiaries with and without low-income subsidies (LIS). Beneficiaries with LIS, who were not affected by the in-gap discount, made up the control group. We studied a random sample of elderly standalone prescription drug plan enrollees with relatively uncommon cancers (eg, leukemia, skin, pancreas, kidney, sarcomas, and non-Hodgkin lymphoma) between 2009 and 2013. We constructed 4 outcome variables annually: 1) use of any specialty cancer drug, 2) the number of specialty cancer drug fills, 3) total specialty drug spending, and 4) OOP spending for specialty cancer drugs. RESULTS: The in-gap discount did not influence specialty cancer drug use, but reduced annual OOP spending for specialty cancer drugs among users without LIS by $1108. CONCLUSIONS: In-gap discounts in Part D decreased patients' financial burden to some extent, but resulted in no change in specialty drug use. As demand for specialty drugs increases, it will be important to ensure patients' access to needed drugs, while simultaneously reducing their financial burden.

Original languageEnglish (US)
Pages (from-to)553-559
Number of pages7
JournalAmerican Journal of Managed Care
Issue number9
StatePublished - Sep 2017

All Science Journal Classification (ASJC) codes

  • Health Policy


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