Cancer Drug Parity Laws: A Mixed Bag for Patients

Roxanne Nelson, RN, BSN

November 09, 2017

Cancer drug parity laws were implemented to require insurance companies to provide equal coverage for both intravenous and oral forms of cancer treatments. Although these laws were supposed make the financial playing field even, so to speak, the results have been mixed for patients, according to new findings.

Parity laws have not consistently lowered the out-of-pocket-costs for oral drugs, the new study found. Although patient costs for prescriptions on the lower end of the spending distribution scale were reduced, spending for prescriptions at the highest end increased.

After parity laws went into effect, prescriptions with cost sharing of $0 per month more than doubled, whereas medication prescriptions that cost at least $100 per month simultaneously increased.

Overall, both before and after parity laws were adopted, plans typically required relatively modest cost sharing. But because about 5% of prescriptions were associated with out-of-pocket spending of $500, it appears parity law requirements in and of themselves are not fully addressing this issue, the authors conclude.

The study was published online November 9 in JAMA Oncology.

Lead author Stacie B. Dusetzina, PhD, assistant professor, the Eshelman School of Pharmacy, Lineberger Comprehensive Cancer Center, University of North Carolina at Chapel Hill, explained that the findings remain unclear.

"It isn't completely clear from our study why we see so many cancer drug prescriptions costing over $100 per fill out of pocket after parity was passed, but part of this could be explained by use of deductibles and coinsurance, which has increased over time," she told Medscape Medical News. "We hope to look more closely at these factors in future work."

Although parity laws were written with good intentions and have helped to some extent, many cancer patients still face high out-of-pocket expenses.

One reason is that not all states have parity laws, and some types of plans are exempt from the law.

"About half of the people included in our study were in plans that were exempt from state insurance mandates due to ERISA [Employee Retirement Income Security Act]," said Dr Dusetzina. "Even though they lived in a state that passed parity, they did not benefit.

"There are federal proposals that have been put forward by the House and Senate multiple times, and this would extend parity to all privately insured people," she pointed out.

Orally administered anticancer medications are becoming increasingly common and offer advantages for the patient. But these drugs tend to be quite expensive, with list prices often exceeding $100,000 per year, the authors point out.

Uneven Coverage

Because oral drugs are obtained under the pharmacy benefit of a plan, rather than the medical benefit, under which infused medications are covered, this discrepancy can require higher cost sharing for the patient.

Medical benefits usually require patients to pay a flat copayment ($20 to $50 per visit) for care in an outpatient setting. For such care ― which can include the administration of IV medications ― the cost to the patient is very modest.

Pharmacy benefits, however, involve a very different arrangement. They often have a tiered copayment structure, and other provisions may increase cost sharing for more expensive medications.

As a result, 43 states and Washington, DC, have passed oral chemotherapy parity laws to ensure that cost sharing is equal for both oral and infused anticancer agents.

However, some experts have pointed out that the laws are "an inadequate response" to the high cost of drugs, which is not challenged or changed for the United States as a whole.

Benefit to Some, Not Others

In their study, Dr Dusetzina and her colleagues sought to estimate changes in oral anticancer medication use, out-of-pocket spending, and health plan spending after the implementation of oral chemotherapy parity laws.

They used administrative health plan claims data from 2008-2012 for three large nationwide insurers. Their cohort included 63,780 adults, of whom 51.4% participated in fully insured plans and 48.6% were in self-funded plans (not subject to parity laws).

The use of oral therapies increased, as a proportion of all anticancer medication use, from about 18% before parity laws were passed to 22% after, but no significant differences could be attributed to parity laws (adjusted difference-in-differences risk ratio [aDDRR], 1.04; 95% confidence interval [CI], 0.96 - 1.13; P = .34).

For both types of insurance plans, patients spent $50 or less out of pocket for most prescriptions of oral drugs and infused medications both before and after parity laws.

The proportion of prescriptions without a copayment increased from 15.0% to 53.0% after the adoption of parity laws, which was more than double the increase for self-funded plans (from 12.3% to 18.0%) (aDDRR, 2.36; 95% CI, 2.00 - 2.79; P < .001).

However, the proportion of out-of-pocket spending of more than $100 per month in fully insured plans increased from 8.4% to 11.1%; for self-funded plans, such spending declined slightly, from 12.0% to 11.7% (aDDRR, 1.36; 95% CI,1.11 - 1.68; P = .004).

For fully insured plans, state parity laws were associated with modest albeit statistically significant decreases in estimated monthly out-of-pocket spending ― by $19.44 at the 25th percentile, $32.13 at the 50th percentile, and $10.83 at the 75th percentile ― but then increased at the 90th ($37.19) and 95th ($143.25) percentiles (all P < .001).

Total health care spending for 6 months of treatment with all medications was a mean of $87,328 in fully insured plans and $84,103 in self-funded plans. No statistically significant changes were observed in spending by parity status (for all anticancer medication users, P = .09; for oral anticancer medication users, P = .40).

Broader Solutions Needed

"Parity is an imperfect solution but demonstrates widespread state support for helping people with cancer to obtain their prescribed treatments," said Dr Dusetzina. "Many patients did benefit from these laws, but the benefits were really concentrated among those who were already paying the lowest amount for their treatments."

She noted that the parity laws do not assist Medicare beneficiaries who cannot afford their medications. "This is an incredibly important group, given how much more common cancer is among Medicare enrollees and the very high costs to them when trying to obtain their prescriptions."

It is hard to determine what additional changes could be made to improve parity laws that would not have adverse consequences, Dr Dusetzina emphasized.

"For example, one potential solution might be to include a cap on total spending required in a month ― let's say $75 for a prescription ― in addition to parity," she said. "This may help to address the challenge that we observed where some patients were paying more after parity but might lead to more plans increasing cost sharing to the level set as the cap."

For federal proposals and for states that have not yet passed parity, it would be helpful to consider whether "true parity" ― making benefits equivalent across medical and pharmacy benefits ― would lead to higher spending for some patients.

"This may be true, as we have seen greater use of coinsurance and high-deductible health plans over recent years," Dr Dusetzina said. "Broader solutions that target both drug prices and benefit design will be needed to make meaningful changes in the affordability of cancer drugs."

The study was supported by grants from the American Cancer Society and the National Cancer Institute. Dr Dusetzina has served on the Engineering, and Medicine Committee of the National Academy of Sciences. The other authors have disclosed no relevant financial relationships.

JAMA Oncol. Published online November 9, 2017. Abstract

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