POLICY ISSUES FOR PHARMACEUTICALS
`
`By Catherine I. Starner, G. Caleb Alexander, Kevin Bowen, Yang Qiu, Peter J. Wickersham, and
`Patrick P. Gleason
`
`
`Specialty Drug Coupons Lower
`Out-Of-Pocket Costs And May
`Improve Adherence At The Risk Of
`Increasing Premiums
`
`IO.I377/hlthaff.20I4.0497
`D OI:
`HEALI'H AFFAIRS 33.
`NO. IO (2014): I761 I769
`020] 4 Project HOPE
`The People to People Health
`Foundation. Inc
`
`ABSTRACT Expenditures for specialty drugs account for more than
`25 percent of total US drug spending and have been increasing at more
`than 13 percent annually. We examined insurers’ role in maintaining the
`affordability and accessibility of specialty drugs while maximizing their
`value. We conducted two analyses: one using an administrative claims
`database with information on more than ten million commercially
`insured patients and another using the same database combined with the
`drug prescription records from a specialty pharmacy. First, we examined
`the prevalence of specialty drug coupons and the degree to which these
`reduced patients’ out-of-pocket costs, focusing on 264,801 prescriptions.
`Second, we quantified the association between the magnitude of out-of-
`pocket costs for specialty drugs and patients’ abandonment of their new
`or restarted therapy, focusing on a group of nearly 16,000 patients. We
`found that drug coupons accounted for $21.2 million of patients’
`$35.3 million annual out-of-pocket costs. In the vast majority of cases,
`coupons reduced monthly cost sharing to less than $250, a point at
`which patients were far less likely to abandon therapy with biologic anti-
`inflammatory drugs or with drugs for multiple sclerosis. However, by
`reducing cost sharing, coupons may also circumvent efforts to encourage
`patients to use the most cost-effective drugs.
`
`Catherine I. Stamer is a
`senior health outcomes
`researcher at Prime
`Therapeutics LLC,
`in Eagan.
`Minnesota.
`
`6. Caleb Alexander is an
`associate professor of
`epidemiology and medicine
`and codlrector of the Center
`for Drug Safety and
`Effectiveness at the Johns
`Hopkins University, '11
`Baltimore. Maryland.
`
`Kevin Bowen is a senior
`health outcomes researcher at
`Prime Therapeutics.
`
`Yang Qtu is a data scientist at
`Prime Therapeutics.
`
`Peter J. Wickersham is senior
`vice president for integrated
`care and specialty at Pr'me
`Therapeutics.
`
`Patrick F. Gleason (pgleason@
`primetherapeutics.com) is
`director of health outcomes
`at Prime Therapeutics.
`
`pecialty drugs, which include most
`injectables and biologic agents, are
`used by fewer than 1 percent of pri-
`vately insured patients in the United
`States. However, these drugs cur-
`rently account for more than 25 percent of all
`drug expenditures, have an average monthly cost
`to payers and patients of $3,500, and have in-
`creased in cost by more than 13 percent annually
`for the past three years}
`Off-patent specialty drugs, or biosimilars, are
`expected to enter the US market within the next
`few years. However, the costs associated with
`specialty products are nevertheless forecast to
`exceed 50 percent of all drug expenditures by
`
`2020.“ In large part, this is because specialty
`drugs are becoming the standard of care for
`many chronic conditions.
`For example, drugs for multiple sclerosis and
`autoimmune inflammatory diseases, such as
`rheumatoid arthritis, are the top two specialty
`drug categories and in 2013 represented more
`than 45 percent of all specialty drug expendi-
`tures billed through patients' pharmacy bene-
`fits—that is, drug coverage.”
`Biologic anti-inflammatory drugs to treat au-
`toimmune inflammatory diseases cost payers
`and patients $2,500 a month on average; the
`figure for multiple sclerosis drugs is $4,100.“
`The cost of specialty drugs for less common con-
`
`I B
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`33:10 HEALTH AFFAIRS
`OCTOBER 2014
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`Argentum Pharm. LLC V. Alcon Research, Ltd.
`Case IPR2017-01053
`
`ALCON 2080
`
`

`

`POLICY ISSUES FOR PHARMACEUTICALS
`
`ditions can exceed $35,000 a month.5 These
`costs impose a growing burden on employers
`and federal and state payers alike.6
`Insurers can use a variety of tools to reduce
`specialty drug expenditures while helping
`maintain the drugs’ affordability, patients’ ac-
`cess to them, and patients' adherence to their
`use. These tools include formularies with pre-
`ferred drug lists, utilization management pro-
`grams, and care management provided to pa-
`tients by specialty pharmacies (Exhlbit 1).“1
`Two tools that have attracted particular inter-
`est and scrutiny are patient assistance pro-
`grams—specifically, coupons—and patient cost
`sharing for specialty drugs. As noted above, spe-
`cialty drugs are expensive, and cost sharing
`serves several important purposes. It tempers
`“moral hazard” by forcing patients to assume
`some of the costs, reduces costs for third-party
`payers, and acts as a pricing signal that encour-
`ages patients to choose the most cost-effective
`drug.
`However, there are limits to the costs that can
`be passed on to consumers because higherlevels
`of drug cost sharing are associated with higher
`rates of nonadherence. For example, studies ex-
`amining biologic anti-inflammatory drugs and
`
`those for multiple sclerosis‘“6 suggest that when
`monthly out-of-pocket costs for prescription
`drugs exceed $150-$200, rates of new therapy
`abandonment approximately double,”14 the
`odds of being adherent are reduced by 39 per-
`cent,15'16 and the risk of discontinuation in-
`creases by 27—58 percent.”"
`Manufacturers have increasingly relied upon
`drug coupons, processed through either the
`pharmacy or the medical benefit, to help offset
`patients’ cost share.‘”‘ The medical benefit is
`insurance for all medical care (for example, care
`provided in a doctor’s office or a hospital), in-
`cluding drugs administered or provided as part
`of medical care.
`
`As of early 2014 there were 561 coupon pro-
`grams for more than 700 brand-name drugs.17
`Most of these programs are for drugs that have
`either a chemical equivalent approved by the
`Food and Drug Administration or a within-class
`generic therapeutic alternative.18
`In conn'ast to many small-molecule therapies,
`many specialty drugs have no substantially
`lower-cost alternative. In these cases, drug cou-
`pons may make the therapies more affordable to
`patients and may increase adherence. However,
`the increased use of nonpreferred drugs can re-
`
`-—
`hsurers’ Tools To Help Reduce Specialty Drug Expenditures
`Tool
`
`Drug formdary
`
`Patient’s cost share
`
`Specialty pharmacy
`network
`
`Optimizing site of care
`
`Rebates
`
`Drug purchasing
`discounts
`Prior authorization
`
`Step therapy
`
`Quantity limits
`
`Care management
`Case management
`Coordination of care
`Patient assistance
`
`Explmation
`A list of pharmaceutical products that are considered to be preferred based on recommendations from the pharmacy benefit
`manager or health plan's pharmacy and therapeutics committee. Products are selected based on their safety, efficacy,
`uniqueness, and net cost. factoring in rebates.
`The final amount that the patient is responsible for paying for a prescription after all calculations have been applied, based on
`the insurer’s application of benefit design tiering to a drug forrnulary (for example, the patient’s cost share for preferred
`specialty drugs may be 5100 per prescription, and nonpreferred specialty drugs may have 20% coinsurance)
`A small network of pharmacies used to ensure access to limited-distribution drugs that may be unavailable in a retail pharmacy
`and to obtain the lowest costs for services and drug units
`The process of billing specialty drugs to the most cost-effective setting (specialty pharmacy, home. physician office or clinic,
`hospital. or outpatient facility)
`Discounts (primarily determined based upon volume and market share) that are contractually negotiated between the
`manufacturer and the insurer or the pharmacy benefit manager and that require the manufacturer to return to the purchaser
`some of the money paid for the product
`Discounts that are obtained through volume drug purchasing and applying fee schedules for both medical and pharmacy
`benefits.
`
`The requirement that patients meet certain criteria before the pharmacy or medical benefit will cover particular drugs
`A process that requires a patient to try certain drugs before trying other drugs, for quality and/or cost reasons; if a patient
`does not respond well to one drug, other therapies are progressively prescribed as needed.
`Setting a maximum or minimum quantity of a drug (defined by the number of days, quantity, orboth) that may be dispensed to a
`patient at each fill.
`Patient counseling services provided by a specialty pharmacy to ensure safe and effective drug use.
`Patient services provided by a health plan to ensure the use of preferred care networks and specialists.
`Communication between the patient. the health plan, and a pharmacy where the patient's prescriptions are processed.
`Financial aid (such as drug coupons) to reduce the impact of patient cost sharing on drug adierence.
`
`sou-Ic- Authors' analysis. no" Successful management requires coordination in the use of these tools.
`
`17")
`
`an”... AFFAIRS
`RIGHT! Liana)
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`

`

`Specialty drugs are
`expensive, and cost
`sharing serves several
`important purposes.
`
`sult in higher costs for the payer, after all nego-
`tiated price reductions are applied.18
`Studies have provided insights into the associ-
`ation between high cost sharing for specialty
`drugs and patients’ drug abandonment or non-
`adherence.13–16 However, these studies were con-
`ducted before drug coupons became widely
`available. In addition, the increasing use of high-
`deductible health plans19,20—both by people with
`commercial
`insurance and by those insured
`through the state or federal Marketplaces creat-
`ed by the Affordable Care Act (ACA)—raises con-
`cerns about how these deductibles will affect the
`use of costly specialty products, and the degree
`to which drug coupons will be able to buffer
`people from the economic impact of such cover-
`age designs.
`We conducted two analyses. One used a phar-
`macy benefit manager’s administrative claims
`data for more than ten million commercially in-
`sured patients in eleven health plans around the
`United States. The second used the same data-
`base and was combined with the drug coupon
`prescription records from a specialty pharmacy
`that served these patients.
`In the first analysis we examined all 264,801
`specialty prescriptions, both those with and
`without coupons, that were billed to a single
`pharmacy benefit manager by a specialty phar-
`macy in 2013. This was done to evaluate the
`prevalence of specialty drug coupons and the
`degree to which these reduced patients’ out-of-
`pocket costs. In the second analysis, which fo-
`cused on a group of nearly 16,000 patients, we
`quantified the association between the magni-
`tude of out-of-pocket costs for multiple sclerosis
`and biologic anti-inflammatory specialty drugs
`and primary nonadherence, defined as the aban-
`donment of new or restarted therapy with the
`drugs.
`Together, these analyses allowed us to consid-
`er the multifaceted relationship among patient
`cost sharing; the abandonment of specialty drug
`therapy; and the impact of drug coupons on the
`affordability of, and access and adherence to,
`specialty drugs.
`
`Study Data And Methods
`Prevalence And Impact Of Drug Coupons We
`searched a single specialty pharmacy’s prescrip-
`tions that were billed to a single pharmacy bene-
`fit manager serving more than ten million pri-
`vately
`insured patients, with 131,606,843
`member months of eligibility during 2013. We
`defined a specialty pharmacy as one that uses a
`comprehensive patient-focused model with sup-
`port services going beyond those of a retail phar-
`macy.21 We found 264,801 prescriptions that met
`our criteria, representing 42 percent of the spe-
`cialty prescriptions for the more than ten million
`patients served.
`We used data on all prescriptions from the
`single specialty pharmacy that were billed to
`the pharmacy benefit manager to obtain pre-
`scription counts, patient cost shares, plan
`shares, and total amounts paid. By linking data
`from the specialty pharmacy to the pharmacy
`benefit manager’s claim records, we were able
`to identify specialty drug prescriptions that had
`been filled with and without the use of a coupon.
`We then calculated each coupon’s value by
`comparing the patient’s cost share as defined
`by the insurer with what the patient actually paid
`at the pharmacy after the coupon was applied.
`Descriptive statistics were used to examine the
`proportion of patients who used drug coupons
`and how much these coupons reduced patients’
`cost share.
`Analysis Of Cost Sharing And Abandon-
`ment We also performed an observational
`cross-sectional analysis of more than ten million
`privately insured patients from eleven commer-
`cial health plans with 274,494,788 member
`months of eligibility during the period July 2010–
`December 2012.We found nearly 16,000 patients
`who met the criteria for this analysis.We defined
`a specialty drug as one that had a high cost to
`payers and patients (more than either $1,000
`per month or $5,000 per year or course of thera-
`py), had a nonoral delivery (such as injection) or
`special handling (such as refrigeration), or re-
`quired enhanced patient support (such as safety
`monitoring or training).
`We identified patients with an adjudicated
`pharmacy claim—that is, a claim with the pa-
`tient’s cost share amount and insurer’s amount
`assigned by the pharmacy benefit manager—
`for a biologic anti-inflammatory (abatacept,
`adalimumab, alefacept, anakinra, certolizumab
`pegol,
`etanercept, golimumab,
`infliximab,
`rituximab, tocilizumab, or ustekinumab) or
`multiple sclerosis (fingolimod, glatiramer ace-
`tate, interferon beta-1a, interferon beta-1b, or
`natalizumab) specialty drug in the period
`July 2010–December 2012. The date of the earli-
`est specialty drug claim was defined as the pa-
`
`October 2014
`
`33:10 Health Affairs
`
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`

`Policy Issues For Pharmaceuticals
`
`tient’s index date. To be included in our analysis,
`patients had to have been continuously enrolled
`in one of the eleven health plans for 180 days
`before their index date and 180 days after
`that date.
`To ensure that patients were attempting to
`newly initiate or restart the use of their specialty
`drug, we excluded patients who had a paid claim
`(that is, the patient obtained the prescription)
`for one of the specialty drugs during the 180 days
`before the index date via either the medical or
`the pharmacy benefit.14,15
`We defined abandonment as a patient’s having
`had a reversed claim—that is, an adjudicated
`claim for a prescription that the patient did
`not obtain, for which the pharmacy withdrew
`the claim—with no evidence of a paid claim in
`the following ninety days for any drug in the
`same class through either the medical or the
`pharmacy benefit. We repeated our analyses us-
`ing 180 days instead of 90 days as the period to
`define abandonment. These sensitivity analyses
`yielded substantively similar results and are not
`reported here.
`We performed separate analyses on the two
`groups of specialty drugs, biologic anti-inflam-
`matory therapies and multiple sclerosis drugs.
`Patients were placed into one of nine mutually
`exclusive categories according to the magnitude
`of their monthly out-of-pocket payment for the
`first specialty drug claim. The categories ranged
`from less than $50 to more than $2,000.
`Next, we calculated the proportion of patients
`who abandoned therapy in each category, along
`with 95 percent confidence intervals. We tested
`the trend in abandonment rates as the out-of-
`pocket expense increased. We also compared
`abandonment rates for each of the out-of-pocket
`expense groups, using the group with the lowest
`expense as a reference.
`Finally, we examined the multivariate associa-
`tion between out-of-pocket expense, patients’
`demographic and clinical characteristics (age;
`sex; education, income, and race at a ZIP-code
`level, derived from Census Bureau information;
`Optum pharmacy risk group score,22 which
`measures disease burden; and out-of-pocket
`cost for all drug claims other than biologic anti-
`inflammatory therapies or multiple sclerosis
`drugs during the 180 days before the index date),
`and abandonment rates of biologic anti-inflam-
`matory therapies or multiple sclerosis drugs.
`In models of abandonment of biologic anti-
`inflammatory therapies, we included a variable
`to capture patients with evidence of a pharmacy
`claim for methotrexate during the 180 days be-
`fore the index date.We did this because previous
`research has demonstrated a relationship be-
`tween prior methotrexate use and the abandon-
`
`ment of a biologic anti-inflammatory therapy.13
`We assessed the overall fit of the logistic re-
`gression models using the C-statistic and good-
`ness-of-fit p value. For all statistical tests,we used
`SAS, version 9.1.3, and considered p < 0:05 to be
`significant.
`Limitations Our study has several limitations.
`First, there are many reasons why patients may
`abandon medications, and our study was not
`designed to assess causality. Nevertheless, we
`found strong and consistent associations be-
`tween the levels of out-of-pocket spending and
`abandonment rates. In addition, our findings are
`consistent with those of other studies demon-
`strating that abandonment rates increase con-
`siderably when monthly out-of-pocket costs ex-
`ceed $150–$200 per specialty drug.13
`Second, our results are based on an analysis of
`data from one pharmacy benefit manager and
`one specialty pharmacy that provided services
`to commercially insured patients in the Midwest
`and South. Thus, our results might not be gen-
`eralizable to other geographic locations or to
`Medicare populations. The Centers for Medicare
`and Medicaid Services (CMS) considers a drug
`coupon to be an illegal kickback and has banned
`such coupons from federal health programs.
`Third, our analyses included patients insured
`by eleven commercial health plans. However, we
`were not able to evaluate differences in benefit
`design among the different plans.
`Finally, we did not assess how abandonment
`affects costs, health status, health care use, or
`health outcomes.
`
`Study Results
`Prevalence And Impact Of Drug Coupons In
`2013, expenditures for specialty pharmacy
`claims totaled $911.8 million, of which $35.3 mil-
`lion (3.9 percent) was paid out of pocket by pa-
`tients (Exhibit 2). Drug coupons were associated
`with 117,330 (44.3 percent) of 264,801 prescrip-
`tions and covered $21.2 million (60.2 percent) of
`patients’ out-of-pocket costs. On average, pa-
`tients who used one or more drug coupons saved
`$1,069 during 2013.
`More specialty prescriptions were written for
`biologic anti-inflammatory therapies than for
`any other class of specialty drug (Exhibit 2). A
`total of $337.8 million was paid for these prod-
`ucts. Of the $16.8 million that was the patients’
`share (5.0 percent), $12.9 million (76.8 percent)
`was offset by drug coupons. Multiple sclerosis
`drugs constituted the second-most-expensive
`category, with drug coupons offsetting $6.5 mil-
`lion (60.8 percent) of the patients’ share.
`Appendix Exhibit A123 shows patients’ out-of-
`pocket costs before and after the drug coupons
`
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`

`% S
`
`pecialty Drug Coipon Use And Savings Amory 10 Million Commercially hsrred Patients, By Type Of Specialty Drug Category. 2013
`Rx with or
`Paiert cost
`Plan cost
`Rx with
`Patients
`Reduction in out-
`
`Specialty drug category
`Biologic anti-inflammatory therapy
`Multiple sclerosis drugs
`Oral oncology agents
`Growth hormone drugs
`Hepatitis C thermy
`Cystic fibrosis therapy
`Fertility and pregnancy therapy
`Others”
`All
`
`without thug
`coupon
`125,459
`68,452
`15,050
`16,513
`7,071
`4,280
`11,485
`1 6,491
`264,801
`
`share
`(millions)
`$16.8
`10.7
`1.7
`23
`0.9
`0.4
`0.9
`1 .6
`353
`
`sha'e
`(millions)
`6321.0
`304.0
`86.8
`54.6
`229
`19.7
`17.1
`50.4
`876.5
`
`thug
`coupon
`60.9%
`46.0
`103
`19.5
`25.5
`20.0
`0.1
`1 1 .8
`443
`
`receivirg
`drug coupon
`12,425
`5,542
`392
`606
`311
`222
`11
`368
`1 9,862
`
`of-podret costs
`with coipon'
`76.8%
`60.8
`412
`15.6
`420
`282
`12
`17.4
`602
`
`counc- Authors' ana lysis of one specialty pharmacy's prescriptions billed to a pharmacy benefit manager sewing more than ten million commercially insured patients with
`131,606,843 men‘ber months of eligibility during 2013. non Specialty drug categories were defined by authors ’Drug cocpon amount divided by the patient cost share.
`I’lncludes pul'nonary hypertension drugs, hemophilia drugs, lung disorder therapy, immune globulin dmgs, enzyme deficiency therapy. HIV therapy, oncology injectable
`agents. anticoagulant drugs. and an anategorized gain of high cost specialty drugs
`
`were applied. The proportion of prescriptions
`for which the patient’s cost was more than $50
`was 57 percent before the coupons were applied,
`but only 3 percent afterward For prescriptions
`forwhich the patient’ 5 cost was more than $250,
`the proportions were 12 percent and 1 percent,
`respectively.
`ABANDONMINT RATIS FOR BIOLOGIC AN'I'I‘
`
`mrumnronv nouns For the period July
`2010—December 2012, we identified 12,644 pa-
`tients who met our study criteria of attempting to
`newly initiate or restart the use of a biologic anti-
`inflammatory agent. The characteristics of pa-
`tients by their out-of-pocket expense category
`are summarized in Appendix Exhibit A2.23
`The unadjusted abandonment rates for these
`therapies started at 5.2 percent for patients in
`the lowest monthly out-of-pocket expense cate
`gory and remained at less than 10 percent for all
`categories of less than $500 (Exhibit 3). The
`rates increased dramatically after that point,
`reaching 52. 3 percent for patients whose month-
`ly out-of-pocket expenses were $2,000 or more.
`The multivariate adjusted statistical models
`showed similar abandonment
`associations
`
`(Exhibit 4). There was a trend toward greater
`abandonment of therapies when out-of-pocket
`costs were $250 or more per month (p = 0.09),
`and significantly greater abandonment when
`out-of-pocket expenses were $500 or more per
`month (p < 0.001). Full models and results are
`provided in Appendix Exhibit A3.23
`ABANDONMINT RATIS FOR MULTIPLI SCLIRO‘
`
`sis nnuos For the period July 2010—Decem-
`ber 2012, there were 3,293 patients who met
`our study criteria and attemptedto newly initiate
`or restart the use of a multiple sclerosis drug.
`
`The characteristics of patients by their out-of-
`pocket expense category are summarized in
`AppendixExhibitA4.“The unadjusted abandon-
`ment rates for multiple sclerosis drugs started
`slightly higher than those for biologic anti-
`inflammatories, at 6.1 percent for patients in
`the lowest category (Exhibit 3). The rates in-
`creased to 10 percent or more when costs were
`$100 or more (p < 0.05).
`Similar to abandonment rates for anti-inflam-
`
`matory drugs, the rates for multiple sclerosis
`drugs increased dramatically at $500 or above.
`Six out of every ten patients with a monthly out-
`of-pocket expense of $2,000 or more abandoned
`their therapy.
`The multivariate adjusted statistical models
`showed that multiple sclerosis specialty drugs
`were significantly more likely to be abandoned
`by patients whose monthly out-of-pocket ex-
`penses were $100 or more, compared to patients
`with expenses of less than $50 (Exhibit 4). Full
`models and results are provided in Appendix
`Exhibit A5.23
`
`Policy Implications
`These findings have three main implications.
`First, our results demonstrate the important role
`that cost sharing plays in determining access to
`and affordability of multiple sclerosis and bio-
`logic anti-inflammatory specialty drugs. We
`found that when monthly out-of-pocket cost
`can be kept below $250 for an initial specialty
`drug prescription, patients are less likely to
`abandon therapy. Our study of drug coupon
`use was separate. Nonetheless, when we com-
`bine the data, the two analyses suggest that in
`
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`

`POLICY ISSUES FOR PHARMACEUTICALS
`
`——
`Unadjusted Abandonment Rats Of Specidty Drugs By 15.937 Patients Newly hitiating 0r Restarting Use
`70
`
`0 Multiple sclerosis drugs 0 Biologic anti-inflammatory therapies
`
`
`
`
`
`(96)WAU!01DOOOAbandonmentrate
`p—i O
`
`NO
`
`504550
`
`550-
`($100
`
`5100-
`<$150
`
`5150-
`<5250
`
`$250-
`<$500
`
`5500-
`<5750
`
`5750-
`€51,000
`
`51,000—
`<SZOOO
`
`$2.000
`or more
`
`Monthly out-of-pocket cost category for specialty drugs
`
`sounel Authors' analysis of a pharmacy benefit manager's adm'nistrative claims data for more than ten million commercially insured
`patients in eleven health plans around the United States in the period July 2010 December 2012. nuns 0f the patients newly initi
`ating or restarting the use of specialty drugs. 12.644 used a biologic anti inflammatory agent and 3.293 used a multiple sclerosis drug
`Bars represent the unadjusted percentages of patients who did not have evidence of a paid claim for a biologic anti inflammatory
`therapy or multiple sclerosis drug within ninety days after a reversed cla'm that is. a claim for a prescription that the patient did not
`obtain. for which the pharmacy withdrew the claim. Whisker marks represent 95 percent confidence intervals calculated using the
`Clopper Pearson exact method. The Cochrane Armitage test (p < 0.001) was used for the analyses of mult‘ple sclerosis drugs
`and biologic anti inflammatory therapies to identify significant trends "-1 abandonment as cost share increased. Differences between
`the lowest expense category (less than $50) and other categories were significant (p < 0.05) for multiple sclerosis drugs in all cate
`gories except the second lowest and for biologic anti inflammatory therapies in the five highest categories (starting at $250 to
`< $500).
`
`the vast majority of cases, coupons reduced pa-
`tients’ monthly cost to less than $250.
`Further research is needed to explicitly link
`coupons, cost sharing, and adherence. For pa-
`tients with a high deductible, coupons may be
`especially helpful: We found that more than
`half of the patients who were required to pay
`more than $2,000 per month abandoned their
`therapy.
`Second, our results suggest that specialty drug
`coupons may undermine pharmacy benefit man-
`agers’ attempts to keep premiums low. The cou-
`pons play this role by eliminating the cost shar-
`ing that is designed to temper moral hazard and
`encourage patients to use preferred formulary
`drugs. We found that drug coupons were ex-
`tremely effective in lowering patients’ cost to less
`than $50 per prescription, thus eliminating the
`incentive to select a preferred drug.
`Third, our results highlight the importance of
`pharmacy benefit management in maximizing
`the value that specialty drugs provide, while en-
`suring the selection and appropriate use of cost-
`
`effective drugs. For example, most coupons for
`multiple sclerosis and biologic anti-inflammato-
`ry specialty drugs can offset $5,000 or more of
`the patient’s copayment." Thus, insurers and
`employers should consider using prior authori-
`zation or step therapy that requires a patient to
`try the preferred specialty drug before a non-
`preferred drug is covered.
`An alternative is nonpreferred drug formulary
`exclusion”.16 Formulary exclusion means that
`the health plan does not cover the nonpreferred
`drug, and privately insured patients’ out-of-
`pocket cost does not apply to their deductible.
`In addition, the health plan will not process a
`prescription for the nonpreferred drug, which
`means that the patient cannot use coupons and
`insurance together.
`However, formulary exclusion makes the pa-
`tient responsible for the entire drug cost. prre-
`scribers are unaware of such exclusions or if
`
`patients require specific therapies, such exclu-
`sions may impose considerable costs on pa-
`tients.
`
`33:10
`on”... AFFAIRS OCTOBER 2014
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`

`-—
`Association Between Abandorlnent 0f Specialty Drugs And Patients' Out-Of-Pocket Expense
`
`Abandonment of multiple sclerosis
`dmzs
`
`Abmdorment of biologic anti-irfla'nmatory
`the"31,35
`
`Out-of-pocket expense
`50 to <50
`
`Odds ratio
`Ref
`
`$50 to <5100
`$100 to <5150
`$150 to <szso
`$250 to <5500
`$500 to <S750
`5750 to <51.000
`$1,000 to <SZOOO
`52.000 or more
`
`0.9
`1.9“
`22"
`3.0“
`29“”
`4.8“"
`8.4“
`260““
`
`95% Cl
`—F
`
`(0.6, 1.4)
`(1.0. 3.5)
`(1.1, 4.1)
`(1.5. 5.6)
`(1.6, 52)
`(26. 8.7)
`(5.5, 129)
`(15.6, 43.7)
`
`Odds ratio
`Ref
`
`1.0
`1.4”
`1.1
`13*
`27“”
`3.9”“
`52*”
`13.6””
`
`95% Cl
`—‘
`
`(0.8, 1.3)
`(1.0, 20)
`(0.8, 1.6)
`(1.0, 1.7)
`(20, 3.7)
`(3.0, 4.9)
`(4.3, 6.4)
`(103, 17.8)
`
`gouac- Authors‘ analysis of a phannacy benefit manager’s administrative cla'ms data for more than ten million commercially insured
`patients in eleven health plans aromd the United States 'n the period July 2010 December 2012. nor-s Patients were placed into one
`of nine mutually exclusive categories according to the magnitude of the'r monthly out of pocket payment for the first specialty drug
`cla’rn, either paid (that is, the patient obtained the prescription) or reversed (that is, the patient did not obtain the prescription and the
`pharmacy withdrew the claim). Logistic regression was used to test the odds of abandoning therapy and was adjusted for age, sex,
`proportions of whites and of those with a bachelor's degree in the patient's ZIP code of residence, ’ncome in the patient's ZIP code.
`Optum pharmacy risk grotp score (see Note 22 'n text), and patient's out of pod<et cost for all claims for ctugs other than multiple
`sclerosis or biologic anti inflammatory drugs du'ing the 180 days before the patient's 'ndex date. Mult’ple sclerosis C statistic = 0.90.
`goodness of fit p value = 0.6554. Biologic anti inflammatory therapy C statistic = 0.77, goodness of fit p value = 0.6969 Cl
`is
`confidence interval. 'Not applicable. *p < 0.10 ”p < 0.05 W"p < 0.001
`
`Health plans might also consider savings op-
`portunities that are available via dispensing
`channels, such as a preferred specialtypharmacy
`network. The Federal Trade Commission sup-
`ports preferred pharmacy networks}7 and two
`CMS studies have demonstrated that their use
`
`is associated with savings.
`Lastly, employers should consider implement-
`ing specialty drug preferred tiers in the policies
`that they offer employees, with patients’ month-
`ly out-of-pocket expense for a drug in such a
`preferred tier being $250 or less. In addition,
`employers should implement a nonpreferred
`cost-share tier that is high enough to prevent
`the cost share from being negated or lowered
`to an amount that is equivalent to the preferred
`tier by a drug coupon.
`Even with the application of specialty drug
`management tools, the value of specialty drugs
`in reducing present and future health care use
`needs to be weighed against the treatment costs.
`For many specialty drugs, including multiple
`sclerosis and biologic anti-inflammatory drugs,
`there is little high-quality evidence of reductions
`in nondrug health care expenditures associated
`with their use. For example, among patients who
`are using multiple sclerosis or biologic anti-
`inflammatory specialty drugs, the costs of those
`therapies exceed all of the patients’ other health
`care costs .9 Therefore, health plans and employ-
`ers should understand that increasing the use of
`these drugs will increase costs overall.
`
`Laws and regulations that govern access to and
`affordability of specialty drugs, including their
`pharmacy benefit management, are being debat-
`ed. For example, patients and advocacy groups
`have engaged lawmakers in at least twenty states
`to either ban specialty drug tiers or limit annual
`patient cost sharing for specialty drugs.”
`In 2010 New York passed the first law to ban
`the use of specialty drug tiers for health plans
`offered in