Archive: Who is really paying for the discount on drugs purchased in the Coverage Gap?

Archive: Closing the Coverage Gap · updated Jul 7, 2019

The discount on brand-name drugs purchased in the Coverage Gap is broken into two components, 70% is paid by the drug manufacturer and 5% is paid by your Medicare Part D plan.

Medicare (that is, the Center for Medicare and Medicaid Services) will provide monthly payments to the Part D plans for the manufacturer discounts made available to their enrollees under the Discount Program.

These payments will be calculated based on projections of non-LIS enrollees and medication use. After the end of the contract year, CMS will reconcile the payments made against the purchases and final payments will be distributed to the plans.

Please note that the discount on generic drugs is paid by your Medicare Part D plan.

The Explanation of Benefits (EOB) document that is periodically sent to you from your Medicare Part D plan provider will clearly show your drug discount in the Coverage Gap and who is paying for the discounts.