Limit Patient Cost-Sharing: States Tell Payers

Insurers are trapped between pharmaceutical companies developing increasingly expensive drug treatments, and states that want to reduce the patient-burden of co-pays. Additionally, states like New York and Alaska have banned payers from using specialty formularies.

Insurers may need to find new ways to control costs for specialty drugs, as more states add limits to cost-sharing and utilization continues to grow.

At least five states have enacted laws limiting copays and two — New York and Alaska — have expressly prohibited the use of tiered formularies for specialty medications. Another 11 states, including California, Illinois and Virginia, have legislation up for consideration that would limit copays.

That state governments are stepping in to place limits on cost-sharing for specialty drugs suggests that public angst over rising out-of-pocket costs is reaching an inflection point—monthly drug costs that were once affordable for patients with conditions like arthritis or multiple sclerosis are becoming harder to cover as part of a family budget. Consumers are seeking relief and lawmakers are turning to insurers to limit what they can charge their members.

“The trend towards increased reliance on specialty pharmaceuticals would not raise such an important concern if specialty drugs did not represent the most expensive segment of pharmaceuticals not only for insurers, but also for consumers through cost-sharing measures,” as Chad Brooker, a health policy analyst at Connecticut’s insurance exchange, Access Health, wrote in Health Law and Policy Brief last year.

By some estimates, specialty medications account for only one percent of all U.S. prescriptions but 25 percent of national drug spending.

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Source: Healthcare Payer News