PoundsPunch Periodical October 2024

Medicare’s Lower Drug Premiums, Lilly’s Shortage Supply Resolved While Compounding Pharmacies Still in Play

Welcome to PoundsPunch’s Periodical of October   2024. In this month, you will find:

• Medicare 2025: Lower Premiums and Caps Aim to Ease Beneficiaries' Out-of-Pocket Costs

  
  

• Eli Lilly’s Weight Loss Drug Shortage Eased While Novo Nordisk Still Facing Challenge

 1   Insurance & Employer

Medicare 2025: Lower Premiums and Caps Aim to Ease Beneficiaries' Out-of-Pocket Costs

In 2025, Medicare beneficiaries can anticipate several changes aimed at reducing healthcare costs, particularly concerning Medicare Part D (prescription drug coverage) and Medicare Advantage plans.

Medicare Part D:

• Out-of-Pocket Cap for Drug Coverage: A new annual out-of-pocket maximum of $2,000 will be established for prescription drug expenses. This cap includes deductibles, copayments, and coinsurance, providing significant relief to beneficiaries who previously faced higher out-of-pocket costs.

• Premium Reduction: According to CMS, the average monthly premium for standalone Part D plans is projected to decrease to $46.50 in 2025, down from $53.95 in 2024, representing a reduction of approximately 13.8%.

Medicare Advantage Plans (with Part D coverage):

• Premium Decrease: For beneficiaries enrolled in Medicare Advantage plans that include prescription drug coverage (MAPD), average monthly Part D premiums are expected to decline to $13.50 in 2025, a 13.2% decrease from $15.56 in 2024.

• Out-of-Pocket Limits: The maximum allowable out-of-pocket limit for Medicare Advantage plans will increase to $9,350 in 2025, up from $8,850 in 2024. This limit encompasses all Medicare-covered services, including prescription drugs.

PoundsPunch Comments:

Potential Cost Shifts: The introduction of the $2,000 cap on out-of-pocket drug expenses is a significant benefit for those with high medication costs. However, this change may lead to cost-shifting, where drug manufacturers and insurers adjust their pricing structures, potentially affecting premiums or other cost-sharing elements. According to some analyses, while the cap benefits about 10% of beneficiaries, others might face higher costs elsewhere as plans compensate for the capped spending.

Plan Availability and Network Changes: Some insurers are modifying their plan offerings, which could result in the elimination of certain Medicare Advantage plans or changes in provider networks. According to Wall Street Journal, approximately 1.5 million people may lose their Medicare Advantage plans, and another 3.5 million could lose current Medicare Part D drug policies.

Also, watch out for the increase in the maximum out-of-pocket limit for the entire Medicare Advantage plan, not just the drug coverage, which is capped. Dental and vision charges will also very likely not count toward accumulating to the maximum limit.

 2   Regulatory & Government Updates

Eli Lilly’s Weight Loss Drug Shortage Eased While Novo Nordisk Still Facing Challenge

Eli Lilly's Tirzepatide: The U.S. Food and Drug Administration (FDA) initially declared that Eli Lilly's tirzepatide, marketed as Mounjaro for diabetes and Zepbound for weight loss, was no longer in shortage 

Credits: FDA.gov https://dps.fda.gov/drugshortages

This decision would have limited the ability of compounding pharmacies to produce their own versions. However, following a lawsuit from the Outsourcing Facilities Association, the FDA agreed to reconsider its decision, temporarily allowing compounders to continue producing tirzepatide while the review is underway.

On the contrary, Novo Nordisk's semaglutide—sold as Ozempic and Wegovy—saw some supply improvement in August, yet shortages persist, keeping it on the FDA shortage list as of late October. The company is investing in expanding production capacity to meet the high demand for these medications.

 Credits: FDA.gov https://dps.fda.gov/drugshortages

PoundsPunch Comments:

The FDA's temporary reversal on tirzepatide compounding is a dramatic twist. Initially, declaring the drug no longer in shortage would have tightened Eli Lilly’s control over Mounjaro and Zepbound by blocking compounding pharmacies from producing their own versions. But legal pressure from the Outsourcing Facilities Association forced the FDA to reconsider, keeping the door open for compounders—for now.

While this decision means more options for patients, it also brings a risk: compounded versions can vary significantly from one pharmacy to another, leading to inconsistencies in quality and dosing. Meanwhile, Novo Nordisk’s ongoing struggle with Ozempic and Wegovy supply shows how quickly demand can outstrip supply, making these drugs a hot commodity. Eli Lilly's better inventory management has kept tirzepatide flowing, but if semaglutide shortages persist, more customers might be tempted to try compounded tirzepatide, despite its risks.