Solutions for Reducing Patient Cost Sharing for Medications

August 16, 2016

Cost sharing for medications presents a serious access barrier for many blood cancer patients. Available solutions, if embraced by policymakers, could reduce such cost sharing with very little impact on premiums.

In 2010, Fletcher was diagnosed with chronic lymphocytic leukemia. Within 6 months of starting treatment, his disease was in remission. But this good news did not last as he relapsed just 9 months later. He began treatment again, but the results were poor: Fletcher developed congested lungs, a persistent cough, and cataracts that left him temporarily blind. So, his doctor proposed a different treatment. Exhausted, but hopeful, Fletcher was ready to try the new drug until he heard what it would cost him–$2310 out of pocket (OOP) for just 1 month of treatment. His best chance of survival would consume nearly his entire month’s take-home pay.

It was not long before Jody’s medical bills ate through her family’s savings following her diagnosis with acute lymphoblastic leukemia in 2009. To keep her cancer in remission, Jody is taking a kinase inhibitor that she will likely need for the rest of her life. But when she went to pick up her first dose at the pharmacy, she, too, was shocked to learn how much that lifesaving drug would cost her–$5640 for the first month alone. Everything that she and her husband had put away for their children’s college educations has gone to keeping Jody alive.

Besides leukemia, Fletcher and Jody have something in common: they have had health insurance throughout their cancer treatment journey. Yet, because of the high cost sharing associated with their medications, Fletcher and Jody have faced profound difficulty accessing the treatments prescribed for them. At The Leukemia & Lymphoma Society (LLS), our mission drives us to find cures for blood cancers, but we recognize that finding cures is not enough. We must also work to facilitate access to these life-saving medications, for Fletcher, Jody and many other blood cancer patients struggling to live under similar circumstances.

THE IMPACT OF THE RISING COST OF TREATMENT ON PATIENTS

Over the last decade, employers and other providers of health insurance have shifted more costs onto patients due to a multitude of factors that includes the rising cost of healthcare services. This trend is especially troubling for patients living with a blood cancer diagnosis, since available treatments typically consist of high-priced specialty drugs and other cost-intensive healthcare services.

FIGURE 1

A common discussion with this cost-shifting trend is the steady increase in consumer premium payments, as employee premium contributions have increased 83% since 2006 (compared with a 54% increase for employers over the same period).1 Although premium increases have captured the headlines in recent years, the rising OOP costs that patients face, after they pay their premiums, have proven to be even more dramatic (). In 2003, almost half of patients in employer-provided insurance had no deductible to cover. Ten years later, less than 20% of patients had the same benefit.2 In fact, as insurers have recognized that increasing deductibles can discourage consumers from accessing their benefits, plans have accelerated this trend. In 2015, the average deductible in an employer-provided insurance plan had increased more than 250% from a decade earlier–increasing 3-times faster than premiums over the same period.1

Of specific concern to blood cancer patients are benefit designs that increase the portion of drug costs borne by consumers. This trend is particularly striking in the Medicare Part D marketplace–in 2015, every stand-alone prescription drug plan had adopted a “specialty tier.”3 Placing a drug in a specialty tier allows the plan to charge patients a percentage of a drug’s list price rather than a fixed dollar amount and simultaneously prevents a patient from accessing Medicare’s cost-sharing appeals process. The impact on affordability is reflected in increases in the number of medications placed on the specialty tier each year. In the past 4 years alone, Part D plans have shifted 50% more drugs onto their specialty tiers,3 subjecting many patients relying on those medications to thousands of dollars in additional cost sharing.

Every day, across the country, blood cancer patients face decisions that pit their health against their family’s finances. And while policy makers, payers, and drug manufacturers engage in debates on drug pricing and a host of related topics– debates that seem far from reaching a productive resolution– patients, like Fletcher and Jody, struggle day to day to access critical medications. Evidence indicates that once cost sharing exceeds $100, adherence to prescribed medications begins to drop off significantly,4,5 likely due to the trade-off between paying for medical care and the prospect of damaging the family’s financial stability. Data also show that decreases in adherence correspond to worse outcomes6,7 and increases in costly medical interventions8,9 that, in many cases, could have been avoided with proper adherence. It is unacceptable and tragic when a patient knows that a potential cure is waiting behind the pharmacy counter but cannot receive it due to his/her inability to pay.

THE IMPERATIVE TO IMPLEMENT A SOLUTION

LLS believes that policy makers ought to take immediate action to ensure that consumers, especially those living with chronic and life-threatening diseases and conditions, can benefit from approved therapies that offer appropriate medical benefit. Fortunately, solutions have been identified that, if embraced by policy makers, could have a significant impact on patients with practically no discernable impact on premiums. One of these solutions is to limit the OOP costs associated with prescription drugs. This finding emerged in an actuarial analysis10 that LLS and other partners commissioned last spring, to explore the financial impact of applying limits of $100 and $200 to the cost share for a 30-day supply of a single medication. Given the access barriers associated with increasingly high deductibles, the modeling conducted in the analysis considered these dollar caps to function in a pre-deductible manner. That is the $100 and $200 limits would apply to a consumer’s OOP costs regardless of whether the plan’s deductible has been reached.

To quantify the potential impact for patients, the analysis drew on claims data for patients taking 1 of 6 specialty medications typically used to treat either cancer, HIV, or rheumatoid arthritis. The results of the analysis showed potentially dramatic reductions in total annual costs for the patients utilizing these medications, ranging as high as 32% for blood cancer, 42% for rheumatoid arthritis, and 55% for HIV. Critically, these reductions include not just savings on medicines,but reflect the potential impact on cost sharing for medical benefits, as well.

Regarding premiums, the analysis tested these cost-sharing limits in all 4 metal tiers established by the Affordable Care Act (ACA). The results demonstrated that, in silver, gold, and platinum coverage levels, a $100 limit would potentially trigger a small premium increase, ranging from just 0.2% to 0.8% annually ($9 to $35), which could be offset with minor changes in another component of the plan design. For bronze coverage, the analysis indicated that a $200 limit could produce an annual premium increase of up to 1.6% ($55), but here, too, the analysis showed that the potential increase could be offset with simple modifications to another component of the plan design. For example, this could be achieved through relatively small adjustments to the total OOP costs that a consumer may be required to cover for all benefits and services utilized over the course of the plan year. In the bronze plan designs studied in the analysis, this would mean increasing the OOP maximum from $6250 to $6600.

In short, this analysis illustrates both the viability and potential positive impact of applying modest dollar limits to what patients can be required to cover as their share of the cost of a prescription medication. Certainly, the results of this analysis do not eliminate the possibility that an alternative approach could similarly improve patient access to medications. This could include policies that limit the use of high, combined deductibles; obligate payers to offer plans that utilize only co-pays, rather than coinsurance, as a method for determining cost sharing for medications; or some combination of the two. LLS invites policy makers, patient advocates, payers, and drug manufacturers to come forward with other evidence-based solutions to this critical and complex access issue. From our perspective, policy makers ought to give priority consideration to solutions that would meet the following criteria:

  • Patients would experience a meaningful improvement in access to care
  • Payers could reasonably implement the proposed solution from both a financial and administrative perspective
  • The proposed solution will not prohibit a health plan from complying with existing laws and regulations, in particular, actuarial value requirements as established by the ACA

CONCLUSION

To be clear, the cost of medication is just 1 cost that blood cancer patients and their families must face. Consequently, LLS is taking a proactive and multi-faceted approach to addressing cost and access issues for our community. This includes:

  • Working to secure public policies that can reduce the barriers associated with high OOP costs
  • Conducting research into how cost acts as a barrier for treatment access
  • Providing assistance through our copay program to help patients who cannot afford their insurance premiums or drug co-pays
  • Calling on the pharmaceutical and biotechnology industries to share real-world quality of life and outcomes data to support the pricing for their medications.

EBO

We are confident that by collaborating with key stakeholders we can dramatically improve patient access to these important therapies. Author information

Marialanna Lee, MSc, is senior director, State Government Affairs, The Leukemia & Lymphoma Society.

Brian Connell is senior director, Federal Affairs, The Leukemia & Lymphoma Society.

Elisa Weiss, PhD, is vice president, Patient Access & Outcomes, The Leukemia & Lymphoma Society.

Louis J. DeGennaro, PhD, is president and chief executive office, The Leukemia & Lymphoma Society.

 

Address for correspondence

Louis J. DeGennaro, PhD

President and CEO

The Leukemia & Lymphoma Society

3 International Drive, Rye Brook, NY 10573

 

E-mail: Louis.degennaro@lls.org

 

Acknowledgement

References

The authors would like to acknowledge Rena Conti, PhD, associate professor of health policy, Department of Pediatrics, University of Chicago, for her helpful feedback in the development of this manuscript.

  1. 2015 Employer health benefits survey. The Kaiser Family Foundation website. http://kff. org/report-section/ehbs-2015-section-one-cost-of-health-insurance/. Published September 22, 2015. Accessed July 13, 2016.
  2. Schoen C, Radley DC, Collins SR. State trends in the cost of employer health insurance coverage, 2003-2013. The Commonwealth Fund website. http://www.commonwealthfund. org/publications/issue-briefs/2015/jan/state-trends-in-employer-coverage. Published January 2015. Accessed June 2016.
  3. Avalere Health. 2016 Medicare Part D formularies: an initial analysis. Presented at: Medicare Access for Patients Rx meeting; January 20, 2016; Washington, D.C.
  4. Streeter SB, Schwartzberg L, Husain N, Johnsrud M. Patient and plan characteristics affecting abandonment of oral oncolytic prescriptions. J Oncol Pract. 2011;7(Suppl 3):46s-51s. doi: 10.1200/JOP.2011.000316.
  5. Gleason PP, Starner CI, Gunderson BW, Schafer JA, Sarran HS. Association of prescription abandonment with cost share for high-cost specialty pharmacy medications. J Manag Care Pharm. 2009;15(8):648-658. doi: 10.18553/jmcp.2009.15.8.648.
  6. Marin D, Bazeos A, Mahon FX, et al. Adherence is the critical factor for achieving molecular responses in patients with chronic myeloid leukemia who achieve complete cytogenetic re-sponses on imatinib. J Clin Oncol. 2010;28(14):2381-2388. doi: 10.1200/JCO.2009.26.3087.
  7. Kurtovic-Kozaric A, Hasic A, Radich JP, et al. The reality of cancer treatment in a developing country: the effects of delayed TKI treatment on survival, cytogenetic and molecular responses in chronic myeloid leukaemia patients. Br J Haematol. 2016;172(3):420-427. doi: 10.1111/ bjh.13843.
  8. Wu EQ, Johnson S, Beaulieu N, et al. Healthcare resource utilization and costs associated with non-adherence to imatinib treatment in chronic myeloid leukemia patients. Curr Med Res Opin. 2010;26(1):61-69. doi: 10.1185/03007990903396469.
  9. Darkow T, Henk HJ, Thomas SK, et al. Treatment interruptions and non-adherence with imatinib and associated healthcare costs: a retrospective analysis among managed care patients with chronic myelogenous leukaemia. Pharmacoeconomics. 2007;25(6):481-496.
  10. Pharmacy cost sharing limits for individual exchange benefit plans: actuarial considerations. Leukemia and Lymphoma Society website. http://www.lls.org/sites/default/files/ National/USA/Pdf/Milliman%20Report%20on%20Prescription%20Cost%20Sharing%20Limits% 20for%20Exchange%20Plans.pdf. Published March 2015. Accessed June 2016.