CMS launches Medicare Coverage Gap Discount Program

A key provision of the Affordable Care Act kicked in January 1 when Medicare beneficiaries who have Part D but don’t get the low-income subsidy “Extra Help” began receiving a 50% discount under the Medicare Coverage Gap Discount Program on applicable drugs at point of sale. Seniors with Medicare also saw a 7% increase in coverage for all other covered Part D drugs (e.g., generic drugs and supplies associated with the delivery of insulin) while they are in the coverage gap.

Applicable drugs are Part D prescription drugs approved under new drug applications (NDAs) or licensed under biologics license applications (BLAs). These are generally covered brand-name Part D drugs, including insulin and Part D vaccines. Applicable drugs also include Part D prescription drugs that are commonly considered generic but have been approved by FDA under NDAs.

CMS has published a list of drug manufacturers who have signed an agreement to participate in the program, along with the associated 5-digit labeler codes, at

http://www.cms.gov/PrescriptionDrugCovGenIn/05_Pharma.asp#TopOfPage

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Pharmacies should do the following to prepare for the program:

• Manage supply chain. Pharmacies should work with Part D contractors to review the list of labeler codes on CMS’ website to determine whether their inventories have applicable drugs.

• Educate staff. Pharmacy employees should be knowledgeable about the program, and they should be prepared to answer patient’s questions.

During the next 10 years, the benefits will increase for all covered drugs, so seniors with Medicare will pay less in the coverage gap. By 2020, the coverage gap will close and seniors will pay only 25% for their covered brand-name and generic drugs, from the time they meet the deductible (if applicable) until they reach their out-of-pocket limit.