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HCV therapies may increase Medicare Part D spending by $5.8 billion in 2015

As a result of new drug regimens for hepatitis C virus infection, federal spending in Medicare Part D is projected to increase between $2.9 billion and $5.8 billion in 2015, according to a new report.

Actuarial firm Milliman, which filed the report, based its projections on the assumption that 15% to 30% of those infected with HCV with Medicare Part D prescription drug plans will pay $84,000 for a single treatment course. That is the price Gilead Sciences cited as the cost for therapy with its direct-acting antiviral agent sofosbuvir (Sovaldi).

“While most payers cover about 75% of an enrollee’s prescription drug costs, Medicare Part D covers 95% at high spending levels,” Mark Merritt, president and CEO of the Pharmaceutical Care Management Association (PCMA), said in a press release. “The study shows taxpayers will bear the lion’s share of the increased drug costs for Medicare Part D beneficiaries taking hepatitis C drugs.”

The PCMA retained Milliman to analyze the cost impact of HCV drugs on the Medicare Part D program.

The report suggests that average monthly premiums for Medicare prescription drug plans will increase 4.3% to 8.6% in 2015 as a result of high-priced HCV regimens — translating to an annual increase of $17 to $33 for each beneficiary. The majority of new federal spending will come from increased federal reinsurance subsidies.

The report only accounted for the effect of new HCV therapies on Medicare Part D spending, and not on other medical costs.