Drugmakers are facing a torrent of criticism from healthcare providers, patient advocates, politicians, and insurers over the high prices of their prescription drug products. And those high drug prices are being blamed for a good chunk of the resurgent U.S. healthcare spending growth.
But largely overlooked in the legitimate uproar over high drug prices is the pharmaceutical industry's valid counterattack against insurers. The industry says policymakers should focus their scrutiny on insurers that are designing benefit plans with high deductibles for prescription drug coverage. Drugmakers argue that such plans make essential medications unaffordable for Americans of modest means.
“It's new for patients, and that's been a big shock to them,” a spokesman for the Pharmaceutical Research and Manufacturers of America told the Wall Street Journal.
“In current high-deductible plans, if patients now have to face the cost of those meds, that could very well lead patients to reduce their use,” Dr. Niteesh Kumar Choudhry, an associate professor at Harvard Medical School who studies the impact of cost-sharing on medication adherence, said in an interview with Modern Healthcare. “But there is a basket of evidence-based medications that are life-saving. When we reduce copayments, people use them more and are better off.”
Last year, PhRMA commissioned a study by Milliman showing that 46% of silver plans sold on the Affordable Care Act exchanges apply the plan deductible to prescription drugs, while 12% of employer-sponsored plans use this type of combined deductible. Enrollees in silver plans with deductibles that apply to drugs face cost-sharing for drugs that's 130% higher than in a typical employer-sponsored plan.
“We believe the findings from this study demonstrate how critical it is to put patients first and not burden them with high cost-sharing that creates barriers to maintaining their health,” PhRMA said in a news release accompanying the Milliman study.
The drug industry isn't alone in decrying stiff cost-sharing for prescription drugs. The American Cancer Society Cancer Action Network recently reported that most health plans in six states that it studied placed all or nearly all of the 22 cancer drugs studied, including some generics, into benefit tiers requiring the biggest out-of-pocket spending by patients. Putting the drugs in the highest tier means patients must pay a coinsurance percentage for these expensive products, rather than a flat-dollar copay.
The cancer group urged HHS and state regulators to stop insurers from charging consumers a percentage of the cost for prescription drugs, a move insurers strongly oppose.
Nevertheless, some states already have taken action to restrict health plans from imposing high out-of-pocket costs for drugs. At least seven states have implemented rules to reduce the out-of-pocket financial burden on consumers for prescription drugs both inside and outside the ACA exchanges. Four states, including California and Louisiana, cap the monthly amount individual and group plan members must pay for drugs. In addition, seven state-run exchanges require insurers to offer plans that place limits on drug cost-sharing.
Meanwhile, Democratic presidential candidate Hillary Clinton has proposed a $250 federal cap on monthly out-of-pocket spending for prescription drugs. Experts warn, however, that capping out-of-pocket drug costs will prompt insurers to hike premiums or increase cost-sharing for other benefits.
Some major insurers, including Aetna, Anthem and Humana, have offered group plans that reduce patient cost-sharing for preventive drugs. The rationale is that lowering cost-sharing can boost patient compliance with drug therapies, improve outcomes and cut the total cost of care. This is consistent with the concept of value-based benefit design, which reduces out-of-pocket costs for services that have proven clinical value and increases cost-sharing for services of marginal or unproven value.
An analysis published in the Annals of Internal Medicine in 2012 found that 20% to 30% of prescriptions are never filled, up to half of medications are not taken as prescribed, and that cost was a major reason for non-adherence. It also found that reducing patient out-of-pocket costs for drugs prescribed to prevent heart attacks in patients with diagnosed heart disease decreased the rate of heart attacks by 14%.
Another study published in the New England Journal of Medicine in 2011 found that the medication adherence rate among recent heart attack patients insured by Aetna was significantly higher for study participants who had their drug copays waived than for the control group of Aetna members whose copays were not waived. For the patients with no drug copays, there were fewer readmissions and emergency room visits, and Aetna saved an average of more than $6,000 on their care.
Harvard's Choudhry, the lead author of the NEJM study, said he would like to see more payers offering this type of value-based benefit design, and that there may be ways to combine value-based designs with high-deductibles to achieve both improved patient outcomes and cost savings. But he's seen a dropoff in payers' interest in value-based benefit design as the drive to control healthcare spending in the short term has taken precedence.
“I'm not trying to defend insurers, but to the extent these high-deductible plans exist, it's in response to a demand from employers to curb spending,” Choudhry said. On the other hand, he said, “The cost of drugs for people with lower incomes who may opt into high-deductible plans is very relevant, particularly when they are taking five or 10 medications. The high deductible may reduce spending, but at what cost?”