Insulin Costs and Coverage in Medicare Part D

Data and Methods
Our analysis of changes in list prices for insulin therapies covered by Medicare Part D is based on data from the CMS’s two most recent releases of the Medicare Part D drug spending dashboard (March 2019 and January 2020). Changes in list prices for insulin products available between 2013 and 2018 are measured by five-year (2013-2018) changes in average spending per dosage unit amounts reported in the dashboard. We compare these changes to the rate of increase in the Consumer Price Index for all urban consumers (CPI-U) over the same time period, based on the July 2013-July 2018 percentage change in the CPI-U.

Our analysis of out-of-pocket spending on insulin therapies covered by Medicare Part D, in the aggregate and average per insulin user and product, is based on 2007-2017 prescription drug event claims data from a sample of Medicare beneficiaries (5% sample for 2007-2016, 20% sample for 2017) from the Centers for Medicare & Medicaid Services (CMS) Chronic Conditions Data Warehouse.

Our analysis of formulary coverage of insulin products in Part D plans is based on data from the Q4 2018 Part D Prescription Drug Plan Formulary, Pharmacy Network, and Pricing Information Files, which includes formulary data for 2019 for 46 insulin products (see Table 2 for a complete product listing). Our analysis includes all Part D plans with a 5 or 6 tier formulary design, including stand-alone prescription drug plans and Medicare Advantage drug plans. We calculate out-of-pocket costs for covered insulin products based on the enrollment-weighted median cost sharing at pharmacies offering standard (non-preferred) cost sharing. To illustrate the impact of differences in tier placement and cost-sharing requirements for insulin products, we calculate the median total cost for a 30-day fill at standard cost-sharing pharmacies for several insulin therapies as reported in the pricing information file, and calculate the out-of-pocket cost based on different tier placement and cost-sharing requirements.

Estimates of the share of Medicare beneficiaries with diabetes is based on our analysis of 2000 and 2017 data from the CMS Medicare Current Beneficiary Survey (MCBS). The MCBS asks respondents whether they have ever had any of a series of illnesses or conditions, including diabetes. Their responses are coded affirmatively if the respondent had at some time been diagnosed with the condition, even if it had been corrected by time or treatment. The condition must have been reported by the respondent as diagnosed by a physician, and not by the respondent.

Issue Brief Tables

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