Impact of Cost Sharing on Specialty Drug Utilization and Outcomes: A Review of the Evidence and Future Directions

The authors review published evidence regarding associations between high cost sharing for specialty pharmaceuticals indicated for rheumatoid arthritis, multiple sclerosis, and cancer, and their utilization.
Published Online: March 17, 2016
Jalpa A. Doshi, PhD; Pengxiang Li, PhD; Vrushabh P. Ladage, BS; Amy R. Pettit, PhD; and Erin A. Taylor, PhD, MSPH

ABSTRACT

Objectives: Specialty drugs often represent major medical advances for patients with few other effective options available, but high costs have attracted the attention of both payers and policy makers. We reviewed the evidence regarding the impact of cost sharing on utilization of specialty drugs indicated for rheumatoid arthritis (RA), multiple sclerosis (MS), and cancer, and on the use of nondrug medical services, health outcomes, and spending.

Study Design: Systematic review of Medline-indexed studies identified via an OVID search for articles published in English from 1995 to 2014, using combinations of terms for cost sharing and specialty drugs, and/or our 3 conditions of interest. We identified additional studies from reference lists.  

Results: We identified 19 articles focusing on specialty drugs indicated for MS (n = 9), cancer (n = 8), and RA (n = 8). Studies examined prescription abandonment (n = 3), initiation or any utilization (n = 8), adherence (n = 9), persistence/discontinuation (n = 7), number of claims (n = 1), and drug spending (n = 1). Findings varied by disease, but generally indicated stronger effects for noninitiation or abandonment of a prescription at the pharmacy and somewhat smaller effects for refill behavior and drug spending once patients initiated therapy. Studies have not examined specialty tier cost sharing seen under Medicare Part D or health insurance exchanges, nor effects on medical utilization, spending, or health outcomes.

Conclusions: Evidence to date generally indicates reductions in specialty drug utilization associated with higher cost sharing; effects have varied by type of disease and specialty drug use outcome. We draw upon our findings and the gaps in evidence to summarize future directions for research and policy.

Am J Manag Care. 2016;22(3):188-197

Take-Away Points
 
Current evidence indicates that higher specialty drug cost sharing is associated with reduced specialty drug utilization. Research examining broader health outcomes and spending is unavailable. 
  • Cost-sharing effects varied by type of disease and specialty drug utilization outcome examined. 
  • There is a critical need for methodologically rigorous research to further evaluate whether the aggressive cost-sharing arrangements found in the current marketplace may cause patients to forego, delay, or decrease adherence to specialty drugs, and whether that results in poor health outcomes and higher total spending.
Specialty drugs typically represent significant medical advances, either in the form of novel approaches for the treatment of complex chronic conditions (eg, rheumatoid arthritis [RA], multiple sclerosis [MS]) or because they target diseases with few prior treatment options (eg, rare diseases or advanced cancers). Although the definition of specialty drug varies by payer, these medications share certain key characteristics.1 Typically, they are complex molecules and may be derived from biologic sources; require highly involved manufacturing processes; require special distribution and handling, such as refrigeration; involve intensive patient education and/or follow-up monitoring to ensure appropriate use; and are high cost. Many specialty medications require injection or infusion in clinical settings and are usually covered under the medical benefit. The remainder are administered at home by self-injection, or oral or inhaled administration, and are almost always covered under the pharmacy benefit.

Despite the therapeutic advances offered by many of these agents, specialty drugs have attracted payer attention because they are often accompanied by higher costs than traditional medications. Although the percentage of patients using specialty drugs is quite small—ranging from 1% to 5%2,3—a recent report estimated specialty drug spending in the United States at $95 billion in 2013, or about 29% of total prescription drug spending.4 Although published estimates vary depending on which agents are included, about two-thirds of specialty drug spending growth in 2013 was accounted for by agents to treat cancers, autoimmune conditions like RA, and MS.4

Since about half of specialty drug spending is on self-administered agents covered by pharmacy benefits, these have been the focus of payer efforts to control spending.5 Insurers and pharmacy benefit managers seeking to manage costs have been unable to use the traditional 3-tiered cost-sharing design to encourage utilization of lower-cost drugs, however, given the fact that specialty drugs often have few close, less-expensive substitutes. As a result, utilization management (UM) tools, such as prior authorization and quantity limits, have been applied instead.6 Nevertheless, growing pressure to control spending has led insurers to increasingly place self-administered specialty drugs on new, separate “specialty tiers.” Whereas tiered cost-sharing designs typically have fixed co-payments of increasing amounts for generics, preferred brands, and nonpreferred brands, respectively, newer specialty tiers usually impose a coinsurance requirement which can be as high as 30% to 50% of the cost of the drug. Although specialty tiers were first broadly implemented with Medicare Part D, use of this strategy (and associated high cost sharing) has grown significantly in other markets, including the employer-sponsored insurance market and the new health insurance exchange plans created under the Affordable Care Act.7,8 Further, many plans—particularly those under Medicare Part D—place medications meeting a designated cost threshold (eg, $600 a month or more) on the specialty tier, regardless of whether those medications meet other common criteria for the specialty drug designation.

Despite the market trends in increasing patient out-of-pocket (OOP) costs for specialty drugs, the impact of patient cost sharing on specialty drug utilization and outcomes is unclear. Numerous reviews have summarized the relationship between cost sharing and utilization of traditional oral drugs, but none have evaluated the evidence as it relates to specialty pharmaceuticals.9-11 Such a review is needed for several reasons. First, patients may have strong demand for specialty drugs if they do not have other treatment options or if they perceive alternative, less expensive treatments to be ineffective or undesirable. In this context, they may be willing to pay a much higher cost share compared with traditional pharmaceuticals. On the other hand, the magnitude of OOP costs may exceed patients’ ability to pay, particularly in the context of overall medical expenses and other basic needs. More information is needed to determine the degree to which patient cost sharing is associated with changes in specialty drug utilization, as well as with health outcomes, use of nondrug medical services, and overall healthcare spending.

We sought to address this gap with a systematic review of the published evidence. In light of the highly variable definitions of specialty drugs across insurers, we focused our review on cost-sharing studies of specialty drug classes with indications for 3 key disease areas: RA, MS, and cancer. These represented the top 3 drivers of specialty drug spending in the United States at the time of our review.4 We examined associations between cost sharing and specialty drug utilization for these indications and draw upon our findings, including the gaps in evidence in light of current market trends, to highlight future directions for specialty drug research and policy.

 

METHODS
Evidence Review

We conducted an OVID search for all Medline-indexed articles published in English between 1995 and 2014. The primary search was based on various combinations of 2 sets of search terms. The first set included cost sharing and related terms: co-pay, coinsurance, benefit design, tiered benefit, specialty tier, and out-of-pocket cost. The second set included terms for specialty medications and our indications of interest: specialty drug, specialty pharmaceutical, biologic, rheumatoid arthritis, multiple sclerosis, cancer, oncology, carcinoma, leukemia, oncolytics, myeloma, and tumor. Additional studies were obtained from reference lists of identified studies. Identified articles were then independently screened and reviewed by 2 members of the research team to determine whether they met our criteria for inclusion (Figure).

These inclusion criteria, applied in the following order, were: 1) published as a peer-reviewed original research article (ie, review articles, editorials, and letters were not eligible), 2) examined the effects of cost sharing (co-payments, coinsurance, or OOP costs) for specialty drugs on at least 1 of our chosen outcomes (specialty drug utilization or spending, medical utilization or spending, or health outcomes), and 3) examined drugs or drug classes that were indicated for RA, MS, or cancer and met the aforementioned high cost criterion for specialty drugs, along with at least 1 additional specialty drug criterion (eg, complex molecule or dispensed through specialty pharmacy). Because anti-inflammatory biologics used to treat RA are also approved for other indications (eg, psoriatic arthritis, ankylosing spondylitis), we did not exclude studies that sampled patients based on use of such drugs rather than diagnosis, even though they may have included patents with conditions other than RA. In light of the limited number of studies available, we also did not impose additional restrictions based on study quality. Nineteen articles met our criteria.12-30

We extracted relevant information from each eligible study, including whether they reported cost sharing to have evidence of effects (ie, statistically significant nonzero effect) or no evidence of effects (ie, no statistically significant effect). When price elasticity of demand estimates were reported or could be derived, we captured this information as the expected relative change in the studied outcome if cost sharing were to double (ie, increase by 100%). Given the heterogeneity present in the cost-sharing measures, reported outcomes, study designs, and analytic approaches employed across the identified studies, our summary of the findings and conclusions are largely qualitative in nature.

RESULTS
Detailed characteristics of the 19 studies included in this review are available in the eAppendix (available at www.ajmc.com). Several studies examined 1 or more of our indications of interest, resulting in 8 studies for RA, 9 studies for MS, and 8 studies for cancer.12-30 More than half of the studies (n = 10) examined the effect of cost sharing on specialty drugs covered under the pharmacy benefit only, whereas the remainder examined agents covered under either the pharmacy or medical benefit. The specific specialty drugs examined in each study varied, particularly for cancer. All studies were observational, and a majority (n = 13) used cross-sectional study designs to examine specialty drug use among patients in plans with lower cost sharing compared with patients in plans with higher cost sharing for the specialty drug(s) being studied.

Two studies examined data from individuals enrolled in Medicare Part D,14,21 whereas all other studies used administrative claims data on privately insured patients in commercial plans or employer-sponsored health plans for current or retired employees. No study directly examined the effect of specialty tier–related cost sharing. In fact, databases used in the vast majority (84%) of these studies were from 2009 or earlier, during which time few private insurers were employing the use of specialty tiers and aggressive cost sharing for specialty drugs.

PDF is available on the last page.
Compendia
COPD Compendium
Dermatology Compendium
Diabetes Compendium
GI Compendium
Immuno-oncology Compendium
Lipids Compendium
MACRA Compendium
Oncology Compendium
Rare Disease Compendium
Reimbursement Compendium
Rheumatoid Arthritis Compendium
Know Your News
HF Compendium
Managed Care PODCAST