Biologics, gene therapies, and precision medicine are words that represent hope for millions of chronically ill people in America, but access to these medications may be stymied by the decisions of payers to cover these specialty medications. Fortunately, new research sheds light on this previously murky topic.

Specialty pharmaceuticals hold much promise for treating chronic diseases, including Crohn disease, cancer, hemophilia, and HIV. For payers, employers, and health systems, spending on specialty medications and the spending trend remain common concerns.

Specialty medications accounted for 46% of total pharmaceutical spending in the United States in 2017.1 This spending is unlikely to abate, as roughly half of all new treatments approved by the FDA in recent years are considered specialty medications.2

Insurance coverage of specialty drugs is vital to making the crucial connection between patients and therapy. However, inconsistency in coverage decisions combined with churn in the US insurance marketplace threatens the care coordination and continuity that renders these treatments most effective. After all, specialty medicines are often used to treat chronic conditions. Disruption in a patient’s care could worsen the progression or severity of the disease.

Results from recent research3 show that coverage of specialty medications by major US health plans varies widely. The study authors, investigators from the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center and the National Pharmaceutical Council (NPC), sought to understand how and when health plans cover specialty drugs, the evidence cited in their policies, and what kinds of restrictions they imposed.

In a systematic review of more than 3400 coverage decisions by 17 of the top 20 payers, the investigators found that uniformity was elusive: Only 3 of 5 (60%) specialty pharmaceutical coverage decisions were consistent across the majority of health plans. Only 16% of the 302 drug indication pairs were covered the same way by all health plans, and 48% were covered the same way by 75% of plans.

Because health plans provide health care coverage for different beneficiary populations, have dissimilar budgets, and negotiate independently with pharmaceutical companies, some differences in coverage across plans are expected. For example, a certain plan may cover a specific medication that another may exclude, and 2 plans may cover a medication but for different populations.

These findings come at a time when more Americans have health insur- ance coverage than they have had in a decade—a very good thing. In 2017, 9.1% of the population was uninsured.4 Yet estimates also show that 1 in 8 Americans changes health insurance plans each year, which presents another threat to care coordination, continuity, and appropriate care for patients with chronic diseases.

Payers even self-report some consternation about making these coverage decisions. In a 2018 survey conducted by the EMD Serono Specialty Digest, 71% of private payers ranked “determining the value of specialty drugs” and “ensuring clinically appropriate use” as top challenges.5

The Tufts/NPC findings demonstrate that payers routinely consider whether specialty medicines are of value for different conditions and patient populations as they determine coverage. The investigators found that 38% of cover- age decisions either did not cover or were more restrictive than the FDA indications for these medications. Coverage was consistent with the FDA- labeled indication for 52% and less restrictive for 9% of all decisions.

The most common restriction types were step edits, in which a prior treatment must be proved ineffective before the plan will cover a different drug (73%); limitations on the types of physicians who could prescribe the medication (31%); and restrictions to certain patient subgroups (16%). Multiple coverage restrictions were required for 22.5% of coverage policies.

The findings also reveal where payers look for clues about value. Payers were more likely to be restrictive when the annual cost of the medication and the budget impact to treat patients with the condition was high and when treatment alternatives were available. The availability of evidence, such as the number of randomized controlled trials, real-world evidence studies, and other clinical studies had no significant effect on coverage, suggesting that other factors influence these decisions.

Coverage was less restrictive for medications indicated for a pediatric population, an orphan disease, or a cancer-related indication than those indicated for other diseases. Treatments had fewer coverage restrictions if they were administered by physicians, were approved under an expedited FDA review program, had no safety warnings, or were approved not as recently.

In this time of enormous development of specialty pharmaceuticals, reimbursement and patient access are crucial to achieve the treatment benefits. Yet this research has important implications for patients and providers. For individuals looking to change health plans or employers, what is covered on one plan may not be covered by another plan. The switch in plan coverage may affect access to treatment and cause care disruption. Further, it places pressure on physicians, who must tailor care not just to the patient’s clinical presentation but also to the patient’s insurance coverage.

The variation in commercial health plans’ coverage policies highlights the uncertainty of how the market may respond to the same evidence base and a lack of clarity to inform specialty pharmaceutical development. Clarity in the evidence requirements not only for approval by the FDA, but also in the requirements for insurance reimbursement, is critical for the many patients whom specialty medications may cure, treat, or even prevent health conditions.

References

1. IQVIA Institute. Medicine Use and Spending in the U.S. A Review of 2017 and Outlook to 2022. April 2018.
2. Trends in FDA Approval of Specialty Drugs 1990 Through 2017. RJ Health Systems website. http://rjhealthsystems.com/2017/12/15/trends-fda-approval-specialty-drugs-1990-q3-2017/. Accessed June 27, 2018   
3. Chambers J, Kim D, Pope E, et al. Specialty Drug Coverage Varies Across US Commercial Health Plans. Health Affairs, July 2018.
4. Cohen R, Zammitti E, Martinez M. Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, 2017. Division of Health Interview Statistics, National Center for Health Statistics.
5. EMD Serono Specialty Digest, 14th edition. Managed Care Strategies for Specialty Pharmaceuticals. 2018 edition.