This paper outlines the key provisions of the proposal and considers the implications to the primary stakeholders in the Part D market: plan sponsors, beneficiaries, drug manufacturers and the federal government. We also explore which types of plan sponsors may benefit from this provision and what the potential downsides may be.
As prescription drug costs have continued to rise, Medicare Part D plan sponsors and the federal government have sought creative solutions to mitigate the financial impact. CMS recently brought forth a proposal in the “Contract Year 2021 and 2022 Medicare Advantage and Part D Proposed Rule” aimed at allowing plan sponsors greater flexibility to manage the cost and utilization of specialty medications. Specifically, the provision would permit plan sponsors to introduce a preferred specialty tier to their formularies starting in CY2021.