Speciality Tiers Restrict Access to New Medicines and can Endanger Lives

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Next Friday I will be hosting a roundtable discussion with the Arthritis Foundation, the American Liver Foundation; and the Leukemia and Lymphoma Society on the importance of innovation and patient access to new medicines. It is a free event and I would encourage you to attend. Also there will be an iBIO BBQ immediately following the event. 

New Medicines have improved the quality and length of life for millions of patients and enhanced public health in the US and the world.

  • Cancer: Since 1980 there has been a 83% life expectancy gain for cancer patients attributable to new therapies
  • Cardiovascular disease: according to the AHA death rates for Cardiovascular disease have dropped by 39% over the past 10 years.
  • HIV/AIDS: death rate has dropped by more than 80%, providing a life expectancy close to that of the general public.

These life  enhancing medicines not only help improve healthcare quality and outcomes, they help control health care costs by reducing the need for hospital stays and surgeries.

But Patients struggling with chronic, debilitating and life-threatening diseases must have access to these cutting-edge drug therapies to stay alive.

Unfortunately, many insurance plans now place these drugs, most of which do not ahve generic equivalents, on specialty tiers. These specialty tiers require patients to pay a percentage of the cost of the drug, (i.e., co-insurance) rather than the lower, fixed co-payment amount required for the drugs placed on lower tiers.

This can cost patients thousands of dollars per treatment which can lead to insurmountable medical debt or non-adherance which can raise the cost of healthcare and endanger the patient.

The CMS has allowed Medicare Part D plans to create and use formulary tiers dedicated exclusively to specialty drugs. By placing medicines that exceed an established dollar amount per prescription on a specialty tier, Part D plans shift a substantial portion of the cost of these less- frequently used treatments to enrollees, permitting the plans to reduce overall premiums and to offer lower flat-dollar cost sharing for preferred generic and brand drug therapies used by the majority of patients enrolled in their plans.

The Kaiser Family Foundation reported that 87 percent of stand-alone Medicare Part D Prescription Drug Plans and 98 percent of Medicare Advantage-Prescription Drug Plans employed specialty tiers.

Patients who need such specialty drugs typically have no generic alternative, and many will go into medical debt in order to continue their life-saving treatment. Medical expenses are contributing factors in more than 62% of bankruptcy filings.

In a 2011 study published in the Journal of Oncology Practice, researchers found that patients taking oncology medications with an OOP cost greater than $200 are at least three times more likely to choose not to fill their prescriptions than those with OOP costs of $100 or less.

Researchers estimate that non-adherence to medication regimes contributes $100 billion in annual direct costs to the United States health care system and costs the United States over $2 billion per year in lost patient earnings and lost productivity.

Legislators have introduced bills at the state and federal level to limit patient out of pocket costs for specialty tier drugs. Earlier this year Illinois State Senator Linda Holmes Introduce SB 3395, which would ensure that a health plan that provides coverage for prescription drugs copayment or coinsurance applicable to drugs on a specialty tier does not exceed $100 per month for up to a 30-day supply and required copayment or coinsurance for drugs on a specialty tier does not exceed $200 per month per enrollee. Unfortunately to date SB 3395 does not look like it will pass through Springfield, and there is no immediate hope at the federal level for a similar bill.

I hope that you will join me next Friday, July 25th, to continue this discussion, and keep your eyes out for a podcast on this topic to hit the web in the next couple weeks.

– John Conrad