Impacts of Vertical Integration in Medicare Part D on Sponsors’ Drug Costs, Pharmacy Reimbursement, and Enrollee Cost Sharing
Article Publication Date
Summary
The Department of Health and Human Services’ Office of Inspector General has released a new report examining the growing role of vertical integration, the consolidation of Part D sponsors with pharmacy benefit managers, in Medicare Part D.
The analysis found that overall, the net cost of drugs was similar for vertically integrated Part D sponsors and other Part D sponsors for select drugs. However, the approaches used by Part D sponsors to reach the net costs of drugs differed. While overall drug costs were similar across sponsors, vertically integrated plans offered substantially lower monthly premiums but nearly 40 percent higher out-of-pocket costs for select drugs among enrollees without financial assistance.
The analysis found that overall, the net cost of drugs was similar for vertically integrated Part D sponsors and other Part D sponsors for select drugs. However, the approaches used by Part D sponsors to reach the net costs of drugs differed. While overall drug costs were similar across sponsors, vertically integrated plans offered substantially lower monthly premiums but nearly 40 percent higher out-of-pocket costs for select drugs among enrollees without financial assistance.