Step Therapy: Huge Change to Medicare Advantage Prescriptions

step therapy: how it could affect Medicare Advantage; three tiers of drugs with a hand reaching to tier three

The Centers for Medicare and Medicaid Services (CMS) have recently taken action in an attempt to lower the price of prescription drugs. This new policy (set to go into effect January 1, 2019) would allow Medicare Advantage plans to use a protocol called step therapy. The protocol would determine which medications doctors can prescribe to patients. So far, it has been controversial.

What is step therapy?

Step therapy is a protocol in which patients must first try the cheapest version of a drug before trying more expensive options. If the cheaper version doesn’t work, the patient may move up the ladder of drugs until they find one that does work. However, this is only true for patients trying new drugs. The step therapy protocol will not affect people who are already taking expensive prescription drugs, even if there are cheaper versions available.

The goal of step therapy is to lower prescription drug prices. If doctors prescribe more generic versions of a drug, the logic is that drug manufacturers will lower the price of the expensive versions in order to be more competitive. While step therapy has been shown to lower drug prices, some experts worry that the protocol is a bad idea. 

This protocol would be implemented with physician-administered drugs covered under Medicare Part B, like cancer drugs and other drugs administered in an outpatient setting. According to CMS, Medicare Advantage plans spend nearly $12 billion on Part B drugs every year. The goal is to drastically reduce that number, but it may be at the expense of the patient.  


The following are some complaints against step therapy:

  • It is a “fail first” system, meaning a patient must fail on one drug before being prescribed one that could work better. This could compromise the health of the patient.
  • It ties the hands of the doctor and may prevent them from prescribing more expensive drugs that would work better for the patient.
  • It would increase the administrative burden, creating more oversight and paperwork for providers.
  • It might discourage people from buying Medicare Advantage plans.
  • It could be illegal by preventing Medicare Advantage plans from offering the same coverage and care as Original Medicare.

David Daikh, PhD, MD, and President of the American College of Rheumatology called the new protocol “a gross affront to America’s sickest Medicare patients.” He argues that it will prevent doctors from prescribing the best medication for people who need it most, like people with cancer or inflammatory arthritis.

What does CMS say?

Despite all of the controversy, CMS still thinks step therapy will benefit patients in the long run.

Seema Verma, CMS administrator, said “For too long, Medicare Advantage plans have not had the tools to negotiate a better deal for patients. Today we begin lifting those barriers so plans can use private-sector tools to drive down the cost of expensive drugs while also offering new care coordination and drug adherence programs, to ensure that patients are getting high quality care at lower cost.”

Alex Azar, Secretary of Health and Human Services said, in reference to patients being opposed to this protocol, “If they don’t like their [Medicare Advantage] plan, they don’t have to keep it.”

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