Issues in Drug Benefit Management: Have We Pushed Member Co-payments Too Far?

Debi Reissman, PharmD



In one of my columns (Drug Benefit Trends, December 1999), I predicted a return to pharmacy benefit coinsurance, assuming that cost sharing by a plan member would approximate 30% of the drug cost. The thinking behind this shift back to coinsurance was that a percentage copayment, rather than a flat copayment, keeps pace with rising costs and better educates the consumer/member on the cost of prescribed medications. Many employers had also expressed interest in a more open benefit with fewer restrictions and higher employee cost sharing, leading to the dramatic shift during the past year to a 3-tier benefit structure.

In a review of new benefit designs for the current year, plans may be taking the coinsurance concept a bit too far. Several pioneering plans, both smaller local ones and major national players, have introduced a pharmacy benefit design with a 50% copayment on their third- and/or fourth-tier product lists. While this copayment level may not be such a big issue when the agent is solely enhancing lifestyle or when it offers no additional medical benefit over agents in the lower copayment categories, it could be a major issue when the product is medically necessary for a specific patient or when there are no available alternatives.

The first area of concern is the newer injectable biotech agents, which are commonly self-administered and have found themselves in the third tier of many pharmacy programs. These agents carry price tags of close to $1000 per month, which could cost members about $500 under the new 50% copay programs. While many can argue that the plan that pays half the cost of these agents still provides a significant benefit, how many patients can afford this level of copayment month after month? And what happens if they can't? These agents include Avonex, Betaseron, Ceredase, Enbrel, Epogen, Leukine, and Neupogen.

Many plans are likely to discover that patients forego treatment because they can't afford the copayment. The plans can then end up paying more in hospital care, surgery, and other medical expenses than if the agents had initially been covered at a lower copayment. This is especially true if we enter a period of economic downturn, as many predict.

The second concern involves patients who have tried and failed agents in the lower copay tiers and have found that they must take 1 or more agents in the 50% tier. While the copayment on an individual product may be reasonable at $50 to $60 per month, when a member has several agents at this level, she or he may begin to select which ones to take or take less than prescribed in order to reduce out-of-pocket expenses.

Again, these patients are likely to have less than optimal disease control and may require more hospitalizations and medical follow-up, ultimately costing more to the plan than would covering a greater portion of the drugs' costs initially. Agents here include Actos, Avandia, Avapro, Celebrex, Diovan, Humalog, Lipitor, Prozac, and Vioxx.

In looking at this list of agents, one gets the impression that placement within the tier is based solely on product cost rather than product value or that plans may be placing certain agents in the highest tier in an attempt to "punish" pharmaceutical companies that promote new, higher-cost agents through heavy direct-to-consumer advertising.

It seems that if the trend is to assess a 50% copayment on certain lists of pharmaceuticals, then the benefit should also include several safeguards for the patient and the plan in order to prevent more serious disease complica-tions and medical costs. These safeguards could include the following:

  • Limiting the total annual patient out-of-pocket expenses.

  • Allowing product prior authorization to a lower copayment level for patients who have not responded to existing lower copayment products.

  • Ensuring that there is at least 1 product in each chemical class in the lower preferred copayment levels.

  • Evaluating agents based on total cost of care and medical outcomes rather than solely on product costs.

  • Making sure that the copayment to receive therapy through the Rx benefit is lower than member copayment to receive the therapy in the emergency room, outpatient surgicenter, or hospital.

Unless we base decisions for formulary selection and tier placement on sound medical evidence rather than on personal vendettas and budgets, we are creating a system that will not benefit patients and is doomed to fail.


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