Charitable patient assistance is a crucial safety net for millions, but it’s not enough

By Dan Klein, former President and CEO

For years, independent charities like the PAN Foundation have provided financial assistance to millions of Medicare beneficiaries to help cover out-of-pocket prescription drug costs. However, from time to time, some policymakers and researchers have suggested that charitable assistance may be an influencing factor on drug costs. Recently, the PAN Foundation sponsored a study to investigate the relationship between charitable assistance and drug costs. Read on for details about the research and key insights from the report.

Charitable assistance in Medicare Part D

A study by Avalere Health, which was sponsored by the PAN Foundation, examined trends in patient assistance provided by charitable organizations and the costs to Medicare Part D—the prescription drug benefit covering 45 million older adults and people with disabilities. For the purpose of this study, Avalere excluded those beneficiaries who qualify for a low-income subsidy program. The study considered the impact on those who don’t have other means to subsidize their out-of-pocket costs and turn to charitable organizations for relief

In the study, Avalere explored utilization and cost trends for 100 branded drugs, between 2014 and 2018. Over the five-year period, the data showed that:

  • Both drug costs and out-of-pocket costs increased over time, by 53 percent and 25 percent, respectively.
  • The amount of patient assistance trended down. In fact, during the same period, charitable assistance offset less than three percent of total out-of-pocket costs.

A key finding of the study was that charitable financial assistance has had “no meaningful influence on gross Part D costs.”

The necessity of addressing cost burden on patients

The rise in out-of-pocket costs confirmed by the study is troubling. Medicare Part D beneficiaries need meaningful policy change to limit what they spend out-of-pocket on their medications. A Medicare Part D cap would help people like Lynn Estep, who has benefited from financial assistance from the PAN Foundation. The Indiana resident had heard about the how expensive medications could be for those living with chronic conditions but didn’t truly understand until she was diagnosed with Parkinson’s disease.

“It was a roller coaster ride through one prescription after another, trying to find drugs that would work to control my symptoms. Each new prescription would eat through our savings until there was nothing left,” she said.

Receiving financial assistance through PAN has been “a blessing” that has allowed her to pay for her medications, and still afford groceries and gas.

Avalere’s research and Lynn’s story both demonstrate the importance of lowering out-of-pocket costs. At PAN, we continue to advocate for a Medicare Part D cap, as well as smoothing, a mechanism to evenly distribute out-of-pocket costs throughout the calendar year.

I encourage you to join us. Please consider visiting our Advocacy Action Center and using our easy tool to write to your members of Congress. It only takes a few minutes and a few clicks to ask them to support legislation that increases access and affordability.

Until there are policy solutions to lower out-of-pocket costs in Medicare Part D for people with life-threatening, chronic, and rare diseases, charitable patient assistance organizations, like the PAN Foundation, will remain a vital safety net for millions.

Editor’s note: This research was sponsored by the PAN Foundation, however Avalere Health maintained full editorial control.