Adam Fein, with Drug Channels, recently posted an excellent analysis of the Kaiser/HRET 2016 Employer Health Benefits Survey. His analysis addresses, among other things, cost-shifting in the employer/commercial prescription insurance realm. See Employer Pharmacy Benefits in 2016: More Specialty Drug Cost-Shifting Means More Problems for Patients for his discussion. It is a worthwhile read.
Often, the analysis of Drug Channels is focused on the distribution chain in the pharmaceutical markets and only pays cursory attention to the end of the chain: providers and patients. But in the article above, Adam makes some great points about the impact of this cost-shifting trend as it applies to patients. Adam observes:
…employers continue shifting the cost of specialty prescriptions to their beneficiaries. Patients taking specialty drugs face economically-debilitating coinsurance—in some cases with no limit on out-of-pocket expenses. These benefit designs essentially discriminate against the very few patients undergoing intensive therapies for such chronic, complex illnesses as cancer, rheumatoid arthritis, multiple sclerosis, and HIV. But isn’t insurance supposed to help when things go really wrong?
In addition to the cost-shifting implications made by Adam, the employer or plan’s classification of many of these medications as specialty drugs forces the patient to use a very narrow pharmacy network that often includes a specialty pharmacy owned and operated by the plan. One might also presume, based on the lack of competition given by the specialty designation, the inclusion of a drug on the specialty list could also be motivated by the profit these drugs might generate for the specialty pharmacy.
Another important distinction is that cost-shifting has not been leveraged solely on high-priced medications. This same strategy is also routinely leveraged with less expensive maintenance medications. In both commercial and Medicare Part D plans, a very large number of generic maintenance medications are dispensed to patients for less than $4 per month. This is often lower than the copay the plan might have for the medication. At this point, the plan has essentially cost-shifted the entire prescription to the patient. The plan contribution for the medication is often near, or even equal, zero. During the course of the year, many patients taking only a few of these low-cost maintenance medications will not even satisfy their plan deductible, further minimizing the plan’s risk exposure. All the while, the plan continues to charge the member a monthly premium for the plan.
The implications of this trend are far-reaching. The focus of many plans is now squarely on low price. There is absolutely no focus on outcomes and patient care. This, in my opinion, is the biggest problem with the cost-shifting phenomena.