Exchange Formularies: Cracks in the Coverage

The American Journal of Pharmacy Benefits, September/October 2013, Volume 5, Issue 5

People with chronic conditions need effective and affordable drugs to live longer and better lives. Unfortunately, regulations covering plans in state exchanges may impede access.

The readers of The American Journal of Pharmacy Benefits certainly understand the importance of patients having access to effective and affordable drugs in order to live longer and better lives. Unfortunately, the regulations that will guide health plans available in the state exchanges may actually impede access to essential medicines.

In February 2013, the Centers for Medicare & Medicaid Services (CMS) issued its fi nal rule defining essential health benefi ts (EHBs).1 The rule requires health plans to cover at least the number of medicines in each United States Pharmacopeia (USP) category and class as the state’s selected benchmark. The CMS counting methodology was designed to be an initial test for adequate coverage of prescription drugs. It was not intended to be the only mechanism to ensure appropriate access or nondiscrimination. Reliance on this overly simplistic counting approach will allow plans to limit patient access to medications and yet still be deemed adequate.

Limiting Access to Innovative Medicines

The counting methodology has several inherent flaws that impede its usefulness as an indicator of formulary adequacy. For example, this approach does not account for combination therapies, leaving plans with less incentive to cover these products. For people with human immunodeficiency virus (HIV), this oversight could have devastating impact. The National Institutes of Health recommends that all people infected with HIV undergo antiretroviral therapy involving a combination of medications.2

The rule is silent on the coverage requirements for drugs provided under a plan’s medical benefit, such as intravenous (IV) or injectible drugs, with no standards to ensure adequate coverage of these medical-benefi t drugs. The CMS requirements also do not account for products with time-release technology, which are the standard of care for various mental health conditions. In addition, there are no specific guidelines on how to treat new drugs that enter the market in the middle of the benefit year. Patients want assurances that new drugs are considered in an appropriate and timely manner to ensure access to better treatments.

The patient advocacy community believes 2 specific action steps need to be taken by the federal and state entities responsible for approving qualified health plans (QHPs) that will be offered through the exchanges. Regulators must:

  • Set additional QHP coverage requirements for drug types that are not adequately protected by the CMS counting methodology, such as combination products, physician-administered and medical-benefi t drugs, and time-release products;

  • Require health plans to establish a process to review new drugs that come to market during a benefit year, including a set time frame and transparent method for making coverage decisions.

Coverage Does Not Always Ensure Access

Factors such as tiering, cost sharing, and utilization management have an enormous influence on whether patients can actually get the medications they need. Currently, there are no standards for how plans should place drugs from a single class of medications across tiers and no requirements that a covered class have even a single “preferred” drug. Additionally, the cost sharing assigned to each tier is not limited, so plans may have cost sharing at or above 50% coinsurance for higher tiers.

There also are no restrictions on the use of utilization management strategies, such as prior authorization, step therapy, and quantity limits. For someone with epilepsy, it may take trial and error using several of the more than 20 antiepileptic drugs in succession to come up with the right treatment plan.3 Even when plans meet the standard established by the counting methodology, a plan’s tiering, cost sharing, and utilization management rules are likely to result in insured patients who cannot access their necessary prescribed medications. More intensive reviews of these elements of benefi t design could ensure that plan enrollees have appropriate access to those medications that are covered by their QHP’s formulary.

Federal and state entities responsible for approving QHPs must:

  • Review the combination of coverage, cost sharing, and utilization management when reviewing plan formularies;

  • Require coverage of at least 1 preferred brand per class on a preferred tier; and

  • Establish maximum cost-sharing levels for higher formulary tiers.

Our country needs stronger benefi t requirements and better review of the formularies for QHPs to ensure that they provide appropriate and cost-effective patient access to medications.

State and federal overseers should look beyond a simplistic counting methodology for drugs and review formularies in their totality, taking into consideration a combination of factors, including coverage, cost sharing, and utilization management. Concrete actions, such as those listed above, will results in formularies that meet the needs of all enrollees, especially those of people livingwith chronic diseases and disabilities.