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How Part D Plans' Preference for Higher Cost Hepatitis C Drugs Affects Medicare Beneficiaries

In 2019, Medicare Part D spent approximately $2.5 billion for hepatitis C drugs to treat 50,000 beneficiaries with the disease. Three drugs—Harvoni, Epclusa, and Mavyret—accounted for 93 percent of expenditures, with annual Medicare costs ranging from $28,000 to $77,000 per beneficiary. A portion of these totals was shared by Medicare beneficiaries who faced thousands of dollars in out-of-pocket costs for hepatitis C drugs under Part D. In early 2019, Gilead—the manufacturer of Harvoni and Epclusa—launched authorized generic versions of both drugs with the expressed goal of reducing patients' outofpocket costs. The retail price of authorized generic versions is $24,000, which is significantly less than the prices of Harvoni and Epclusa, and even less than Mavyret. These lower list prices should in turn lead to lower out-of-pocket costs, as authorized generics are as effective as branded versions but sell for only a fraction of the cost. However, a preliminary analysis indicates that Medicare utilization has not shifted from brandname versions of Harvoni and Epclusa to their significantly cheaper, authorized generic versions or to Mavyret. This study will examine the utilization of hepatitis C drugs under Part D and the financial impact on Medicare Part D and beneficiaries.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
April 2021 Centers for Medicare & Medicaid Services How Part D Plans' Preference for Higher Cost Hepatitis C Drugs Affects Medicare Beneficiaries Office of Evaluation and Inspections OEI-BL-21-00200 2022