Radar on Drug Benefits

Stand-alone Medicare Part D Prescription Drug Plans (PDPs) significantly increased their use of coinsurance for popular branded medications between 2020 and 2024, leading to much higher out-of-pocket costs for beneficiaries, according to an analysis published on Feb. 14 in JAMA. Erin Trish, Ph.D., the study’s lead author, tells AIS Health that the results indicate the PDP market “is exposed to inflated list prices through coinsurance” and adds, “if we don’t address PBM reform, you’re leaving beneficiaries in the dust.” 

Meanwhile, an Avalere analysis of Part D formulary files found that 63% of Medicare Advantage Prescription Drug (MA-PD) plans this year have at least two coinsurance tiers, up from 18% last year, and that 83% of PDPs have three coinsurance tiers this year, up from 57% last year. Kylie Stengel, an Avalere associate principal, tells AIS Health that the shift from flat copayments to coinsurance is a “cost-management tool” that payers are using due to Inflation Reduction Act (IRA) provisions that went into effect this year, including a $2,000 out-of-pocket maximum for drugs that led to Part D plans “taking on a lot more liability” for pharmacy spending among its members. 

While the federal government has already set negotiated prices for the first round of drugs subject to the Medicare Drug Price Negotiation Program, states that have the authority to set upper payment limits (UPLs) for medications are inching toward doing so — despite a variety of complications. 

On the state level, the authority to set UPLs for select drugs is wielded by prescription drug affordability boards (PDABs), which states across the country have created in recent years amid mounting frustration over rising drug costs. Not all PDABs are authorized to set UPLs, but among the five boards that do, Colorado and Maryland are the furthest along in the process. 

Some Blue Shield of California says members may not see lower drug prices in the near term under its new unbundled pharmacy care program. The insurer moved away from a single PBM approach to contract with five companies to manage various aspects of pharmacy care in an effort to create more transparency and save money for enrollees in the long run. Matt Gibbs, Blue Shield of California’s chief pharmacy officer, wrote in a Feb. 19 article that the model “won’t always mean lower prices for each specific prescription drug, at least not immediately.” The model will allow employers and members to “gain true insight” into the cost of medications and “make informed decisions in their best interests,” he wrote. But some members might see cost increases for specific medications. “A medication that once cost $1-2, for example, may now be $10-15,” Gibbs wrote. “The reality is, that medication was never truly $1 to begin with.” 

The Federal Trade Commission’s (FTC) lawsuit against the “Big Three” PBMs can move forward, a federal judge ruled. The PBMs — CVS Health Corp.’s Caremark, The Cigna Group’s Express Scripts and UnitedHealth Group’s Optum Rx — asked the court to halt the FTC’s lawsuit, claiming that it was unconstitutional. Judge Matthew Schelp of the U.S. District Court for the Eastern District of Missouri ruled that the case could proceed, stating insufficient evidence warranting an injunction at this time and that it would be “against the public’s interest.” The PBMs have appealed the ruling to the 8^th Circuit Court of Appeals. 

When it comes to how the country’s three dominant PBMs cover the blockbuster drug Humira (adalimumab) and its many biosimilars, one year has made a major difference.  

As of 2025, AbbVie’s Humira either “has or will vanish from PBMs’ standard formularies,” Drug Channels CEO Adam Fein, Ph.D., wrote in his annual post analyzing which drugs were excluded on the standard commercial formularies offered by The Cigna Group’s Express Scripts, CVS Health Corp.’s Caremark and UnitedHealth Group’s Optum Rx, as of January 2025. 

One of the most notable drugs missing from the three largest PBMs’ standard commercial formularies this year is Humira (adalimumab), AbbVie’s blockbuster drug for treating autoimmune conditions that has seen significant biosimilar competition in the U.S. since 2023.

Overall, The Cigna Group's Express Scripts removed 21 medications from its 2025 National Preferred Formulary, while CVS Health Corp.’s Caremark and UnitedHealth Group’s Optum Rx cut 16 and 12 drugs from their Standard Control Formulary and Premium Standard Formulary, respectively, according to Pharmaceutical Strategies Group’s analysis.