Specialty Drug Costs Higher for Americans Enrolled in Exchanges

Despite having lower overall drug-spending averages, people enrolled in exchanges were found to have higher out-of-pocket expenses for specialty drugs when compared with Americans enrolled in employee-sponsored insurance plans, according to data collected by Express Scripts, the largest pharmacy benefit manager in the country. Moreover, investigators also determined that Marketplace enrollees were more likely to use high-cost specialty medications than those enrolled in employee-sponsored commercial insurance plans, particularly in the case of medications to treat hepatitis C and HIV. For HIV specifically, four times more Marketplace enrollees than comparison group members require specialty medications for the treatment of HIV, the report concluded.

The study, published in Health Affairs, included data on more than one million Marketplace enrollees during a nine-month study period. While the authors of the study note that Express Scripts Marketplace enrollees are not necessarily representative of all Marketplace enrollees on other plans, the study was able to capture results from 14% of all exchange enrollees in the country.

Although overall prescription drug spending among Marketplace enrollees was lower than in the comparison group with employer-sponsored health coverage-$72 versus $93 per month, respectively-out-of-pocket expenses for specialty medications were 36% higher in the group with Marketplace insurance. Elements related to benefit plan design under the exchanges, such as higher deductibles and cost-sharing rates for prescription drugs under the exchanges, could be the source of higher out-of-pocket expenses for specialty medications in this group, the authors suggest.

States with the highest Marketplace enrollment rates-the top five being California, Florida, Texas, New York, and North Carolina, according to data from the Kaiser Foundation-may therefore also have higher numbers of patients on specialty medications. It is likely that a larger number of specialty patients in the aforementioned states are paying significantly more for their life-saving therapies than they would if they were in employer-sponsored plans.

Thus, to keep specialty costs affordable for the exchange members in states with the highest Marketplace enrollment rates, these states may benefit from the introduction of legislation that will create a pathway for the substitution of interchangeable biologic medicines-especially since the Congressional Budget Office expects the approximately 7.3 million Marketplace enrollees to swell to 22 million by 2016.

According to the National Conference of State Legislatures, 39 bills or resolutions have been filed in 23 states related to biologics or biosimilars as of March 20, 2015. Currently, eight states-Delaware, Florida, Indiana, Massachusetts, North Dakota, Oregon, Utah, and Virginia-have enacted laws that limit biosimilar substitution to drugs deemed interchangeable by FDA.

Of the top five states with the highest number of patients in exchanges, only Florida has enacted legislation on the substitution of biosimilars. California and North Carolina are among the states that have recently proposed biosimilar bills to allow retail pharmacies to substitute interchangeable biologics. The action in California follows a bill that was previously vetoed by the state’s governor. In Texas, legislation was filed but did not pass. So far, New York has not filed any state legislation related to biologics and biosimilar substitution.

Of course, the legislation is somewhat meaningless in terms of the practice of pharmacy until FDA grants a biologic an “interchangeable” status. State Boards of Pharmacy so far have no products on their so-called “current list of interchangeable products” that is described in much of the proposed legislation. Until then, biosimilars will not be substituted as therapeutically equivalent products in any of the states.

Meanwhile, Express Scripts recently proposed an indication-specific, performance-based pricing system for oncology medications, wherein oncology drugs will be rated and priced based on their efficacy for certain indications. In short, the less effective a drug is shown to be in clinical trials for a certain indication, the less it would cost under the PBM’s proposed scheme.

Sources:
Health Affairs
National Conference of State Legislatures