Background: Nirmatrelvir-ritonavir is an approved treatment for mild to moderate COVID-19 in adults who are at high risk for progression to severe COVID-19, including hospitalization or death. Age is the leading risk factor for severe COVID-19, making treatment access particularly important for the Medicare population. Part D plans must include COVID-19 antivirals on formularies. However, unlike Medicare Advantage prescription drug (MAPD) plans, which assume risk for both medical and pharmacy costs, standalone prescription drug plans (PDPs) have a financial disincentive to cover them in the preferred tier. As reimbursement transitions to Part D plans in 2025, it is important for plans to understand the budget impact of providing treatment access at different formulary tiers.
Objective: To examine challenges to preferred tier access to nirmatrelvir-ritonavir in Part D and their impact on COVID-19 treatment abandonment and hospitalization rates.
Methods: Using a combination of actuarial and budget impact models, we estimated the potential impact of Part D formulary tier placements of nirmatrelvir-ritonavir on plan budgets, therapy abandonment, and hospitalizations using real-world prescription data from Milliman's Prescription Drug Consolidated Database. Potential impacts were summarized separately for PDP, MAPD, and the Medicare fee-for-service program in 2025.
Results: Specialty tier placement of nirmatrelvir-ritonavir resulted in savings to the Medicare program of $2.14 billion compared with $2.22 billion for preferred tier placement. Compared with placement in the specialty tier, nirmatrelvir-ritonavir positioned at the preferred brand tier saves the Medicare program an additional $80.7 million by reducing patient abandonment by 62% and COVID-19-related hospitalization costs by $2.14 billion after accounting for the increase in net Part D plan liabilities. These savings consist of (1) a net cost reduction, after accounting for medical cost offsets, of $65.1 million for MAPD plans, (2) an increase in net Part D liability of $710.9 million for PDPs, and (3) cost savings to Medicare fee-for-service from reduced COVID-19-related hospitalizations of $726.5 million.
Conclusions: Coverage of nirmatrelvir-ritonavir, on any tier, is cost-saving for the Medicare program overall. Preferred coverage with lower patient cost-sharing results in additional savings and improved patient outcomes from lower hospitalizations and mortality rates. Individual Medicare plans should consider the overall clinical and cost impacts of nirmatrelvir-ritonavir on the health system when determining formulary tier placement. Better alignment of incentives for PDPs is needed to address the financial barriers to expanding access for therapies that can improve clinical outcomes and produce savings to the Medicare program.
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