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The American Journal of Managed Care October 2019
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Variation in US Private Health Plans’ Coverage of Orphan Drugs
James D. Chambers, PhD; Ari D. Panzer, BS; David D. Kim, PhD; Nikoletta M. Margaretos, BA; and Peter J. Neumann, ScD
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Variation in US Private Health Plans’ Coverage of Orphan Drugs

James D. Chambers, PhD; Ari D. Panzer, BS; David D. Kim, PhD; Nikoletta M. Margaretos, BA; and Peter J. Neumann, ScD
Health plans restrict orphan drug coverage less often than nonorphan drug coverage. However, the frequency of restrictions varies considerably across plans.

Comparing Orphan and Nonorphan Drug Coverage

The vast majority of orphan drug coverage decisions (2146 of 2168 decisions; 99%) provide at least some coverage: 70% of decisions provide coverage without restrictions, 29% add restrictions, and 1% provide no coverage. By comparison, among nonorphan drug coverage decisions in SPEC (n = 2832), 53% provide coverage without restrictions, 41% add restrictions, and 6% provide no coverage (Figure 1).

In orphan drug restrictions, plans most commonly limit coverage by patient subgroup restrictions (47% of restricted decisions). In contrast, for nonorphan drug restrictions, plans most commonly apply step therapy protocols (77% of restricted decisions) (Figure 2).

Variation in Orphan Drug Coverage

The degree to which plans restricted orphan drug coverage decisions varied across health plans, ranging from 11% to 65% (Figure 3).

Factors Associated With Restricted Orphan Drug Coverage

Health plans are more likely to restrict coverage of orphan drugs indicated for noncancer diseases, for drugs having available alternatives, for self-administered drugs, and for more recently approved products. Plans are also more likely to restrict orphan drugs with higher annual costs and drugs indicated for higher-prevalence diseases (Table). All findings are significant (P <.05).


Health plans cover orphan drugs more generously than nonorphan drugs: 70% versus 53% of coverage decisions do not include coverage restrictions, respectively. Still, the roughly one-third of orphan drug coverage decisions with restrictions are notable and have not been previously reported.

Plans most often restrict coverage of orphan drugs by applying patient subgroup restrictions. For example, one plan restricts coverage of omalizumab for chronic idiopathic urticaria by requiring that patients be symptomatic for at least 6 weeks before they are granted access to the treatment. In another example, a plan restricts coverage of rilonacept for cryopyrin-associated periodic syndromes by requiring that patients’ disease causes functional impairment that results in limitations of activities of daily living.

We found considerable variation in orphan drug coverage across plans. This finding has important implications and suggests that a patient’s insurance company can impact their access to orphan drugs. Reasons for this variation are unclear but may reflect differences in contracting arrangements or in the rebates that plans negotiate, as well as the fact that plans tailor decisions according to their particular patient populations, local practice patterns, and budgetary realities.

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