On July 16th I wrote a piece about hi-copay specialty tiers, and how insurance companies are using them to restrict access to specialty pharma. In the hi-copay specialty tier, instead of pay a flat fee for the medications, patients must instead pay for a percentage of the drug cost, anywhere from 20%-50%.
The therapies in the specialty pharma/hi-copay tiers, are usually the most innovative medicines for some of the most cronic conditions. These are life saving medicines, most of which do not have a generic alternative.
Specialty pharma only accounts for 4% of the prescriptions written, but 25% of all RX costs. And as the discussion about rising healthcare costs continue, biopharma companies are an easy target to point the finger at. After a five-year contraction in healthcare spending growth, medical costs are projected to climb another 6.8 percent in 2015, according to the Health Research Institute at PricewaterhouseCoopers. The high cost of specialty drugs is the main culprit here – these drugs account for 70 percent of all medication approvals by the FDA, the report said, with many more in the pipeline.
Just do a quick google search for Sovaldi, and you will see a almost never ending stream of news stories about how the drug is going to bankrupt states, patients and basically the whole medical system. But….
… it’s not all doom and gloom, according to the Medical Cost Trend: Behind the Numbers report. Here’s why:
“Over the long-term, these innovative new therapies may improve quality of life and reduce other medical costs. From an insurance perspective, the immediate cost spike should level off as patients are cured. Additionally, offsetting the spike in specialty drugs is about $17 billion less in spending as big-name branded drugs lose patent protection in 2015.”
This is even more reason to #reducethecopay, and support Illinois legislation SB3395 (Holmes) and HB6277 (Andrade) — which would amend the Illinois Insurance Code to limit a patient’s out-of-pocket cost for copayment and coinsurance costs for their prescribed specialty drugs.
Check out the snappy info graph PWC made to illustrate the economics: