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Examination of Medicare Part D and the HIV Drug Market Open Access

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Medicare Part D is an optional prescription drug coverage plan offered through private insurers to Medicare beneficiaries in two forms: 1.) A stand-alone prescription drug plan, and 2.) A set of benefits included in a Medicare Advantage plan. Every Part D plan covers a different list of drugs (formularies), of which must include a list of six protected drug categories. HIV/AIDS medications are one of the protected classes (KFF, 2018). But, with the existence of drug tiers (lower tiers/ generic brands being least expensive), the out-of-pocket expenses for different medications vary. Presently, the two largest market suppliers of antiretroviral drugs are Gilead Science Inc. and Viiv Healthcare, who have drastically increased prices from 2012-2016 (Stein, 2018). As the first generation of AIDS survivors from the epidemic in the 1980s turns 65 in the coming years, we will see a large increase of demand for coverage. With regard to Part D, Medicare beneficiaries receiving HIV medication often exceed the coinsurance level of $3700 coverage early on and fall into the "donut hole" due the nature of treatment (drug combinations), the lack of generic brands, and drug tiers (KFF, 2018). From a policy perspective, we will conduct an economic analysis on the potential effects of this new wave of Medicare beneficiaries against the continuous rising costs of HIV medication given the presence of patents and federal regulations.

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