Insurance Industry, Consumers Join
Forces to Fight High Prices of Specialty Drugs
Crisis makes for strange bed fellows
– insurance companies, consumer advocates; cost sharing for some with
chronic diseases like cancer is over 40 percent in exchange plans, puts
pressure on Medicare drug plans
Gillespie, Kaiser Health News
13, 2014 - Here’s the next
salvo in the back and forth between
insurers and the drug industry over drug prices: the Pharmaceutical
Research and Manufacturers of America are pushing the Department of
Health and Human Services to take action to protect consumers who have
gained insurance via the health law’s online marketplaces from high,
out-of-pocket costs for specialty drugs.
Specialty drugs are most often
prescribed for complex, chronic and often costly health conditions like
rheumatoid arthritis and hepatitis C that require continuous monitoring
by a health care provider.
At a June 11 press event, PhRMA,
the drug industry’s trade association, and five patient advocacy groups,
ranging from the Colon Cancer Alliance to the Immune Deficiency
Foundation, pointed to an analysis by the consulting firm Avalere Health
— commissioned by PhRMA — as reason for worry regarding these medicines.
Avalere Study Did Not Include Medicare
Part D Drug Plans; May Impact Costs
The analysis by Avalere Health
found that the vast majority of plans in the Health Insurance
Exchanges require relatively high cost sharing for all medicines
in at least one class. The study did not include Medicare Part D
plans but did include Medicaid managed care plans
- See more at
“The issue of higher cost drugs,
especially “specialty drugs”, is only going to become more
critical to deal with in the coming years. One estimate notes
that by 2020, spending on specialty drugs will quadruple from
$87 billion to more than $400 billion. This continued growth in
spending will put significant upward pressure on premiums in the
private marketplace as well as in public programs like
study examined 123 formularies from
silver-level exchange plans — the
benchmark plan that will generally pay 70 percent of covered medical
expenses, leaving the consumer responsible for 30 percent – and found
that a fifth of them required cost sharing of 40 percent or more for
certain classes of specialty drugs used to treat HIV/AIDS, multiple
sclerosis, bipolar disorder, cancer and other illnesses.
Avalere also concluded that 60
percent of silver plan formularies placed all medications for multiple
sclerosis, Crohn’s disease, cancer and other illnesses in the plan’s
highest formulary tier. That means patients who need these medicines
would face the highest coinsurance percentage.
PhRMA President John Castellani
called on HHS to limit insurers’ ability to structure drug coverage in a
way that subjects patients with these types of chronic and severe
illnesses from these type of high out-of-pocket costs.
“Placing all medicines in the
highest cost-sharing tier makes the best treatments for patient outcomes
and overall value the most expensive and undermines the goal of the ACA.
Cost to the patient is determined by the insurance market,” Castellani
said during the event.
Insurers are currently submitting
exchange premium rates for 2015, and Castellani said HHS could take
action before those rates are finalized.
Others at the press event,
including Carl Schmid, deputy executive director at the AIDS Institute,
said HHS could redefine
essential health benefits
to stipulate that plans not include high cost-sharing for specialty
prescription drugs. Silver-level
plans mostly have an average of $70
for tier 3 drugs, and $270 for tier 4, according to a presentation to a
recent meeting of the International Myeloma Foundation, one of the
groups at the event.
“Certain plans are singling out
medications — it’s not all plans or the majority — and those plans are
fooling patients by putting every single drug in the highest tier,”
The groups, however, did not
address issues related to the drugs’ actual price tags — only coverage
costs to patients. But America’s Health Insurance Plans, the trade group
for insurers, said in a
blog post that PhMRA is trying to
distract attention from drug pricing.
Meanwhile, these recent comments
come amid growing debate on the issue.
The National Coalition on Health
Care launched in May the
Campaign for Sustainable Rx Pricing,
which includes more than 80 organizations that represent employers,
disease advocacy groups, providers and consumers.
John Rother, president and CEO of
the NCHC, said though the concern about patients paying large
coinsurance percentages is a valid one, it’s not the real problem —
instead it is the overall cost of specialty drugs.
“Putting a limit on coinsurance
probably would require legislative action, whereas reducing price is
something companies could do tomorrow,” Rother told Kaiser Health News.
“All we’re arguing about here is whether you pay out of one pocket or
another. The real problem is the total price they have to pay. It’s not
a poor industry — they can make it up on volume particular in the
AARP, which is a member of NCHC,
also said if insurers were to eat the cost of specialty drugs without
some amount of cost sharing, premiums would rise.
“Talking about high levels of
cost-sharing without talking about the high levels of costs is
disingenuous — they wouldn’t be so high if the prices of drugs weren’t
so high,” said Leigh Purvis, senior strategic policy advisor at AARP’s
Public Policy Institute.
This entry was posted Thursday,
June 12th, 2014 at 3:56 pm. on Kaiser Health News. Go to
original posting for comments and updates
You may be eligible for money damages if you owned or leased one of these VW, Porsche or Audi vehicles.
In the major scandal of 2015, Volkswagen cheated you and the world. They rigged diesel emission controls so you, nor regulators, would know how much pollution their cars were adding to our environment.
They were caught and have reserved $7.3 billion to help "make it right" with victims.
If you owned or leased one of these vehicles, contact us now.
Janicek Law attorneys are actively pursuing these cases against VW. Do Not Wait...