Restrictions, Variations in Specialty Drug Coverage May Affect Physician and Patient Choices

Study of U.S. Commercial Health Plans Shows Widespread Variation in Coverage and Reimbursement for Specialty Medicines

According to a new study from the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center and the National Pharmaceutical Council (NPC), coverage of specialty medicines by major U.S. commercial health plans varies widely. Specialty medicines are typically higher-cost, complex medications that often require special administration, monitoring, and handling. The study’s findings point to the need for greater transparency in the evidence used to determine plan coverage decisions, given the wide variations in plan coverage and restrictions, and have implications for both patients and providers.

The study authors sought to understand how and when health plans cover specialty medicines, the evidence cited in their policies, and what restrictions payers imposed. Because health plans provide health care coverage for different beneficiary populations, have dissimilar budgets and negotiate independently with biopharmaceutical companies, some differences in drug coverage across plans are expected. For example, one plan may cover a medicine while another may exclude it; or two plans may cover a medicine, but for different patient populations.

To understand how and to what extent this coverage varied, researchers conducted a systematic review of coverage decisions contained within the Tufts Medical Center Specialty Drug Evidence and Coverage Database, which includes the most commonly cited specialty medication policies issued by 17 of the largest 20 commercial health plans. The database includes how and when health plans cover the medicines, the evidence health plans cited in their policies, drug-level information, e.g., whether the medicine has a black box safety warning, and whether the medicine is self-administered or administered by a physician. In addition, the database includes the types of restrictions that health plans use, such as clinical algorithms, requirements to first try a less expensive treatment to deliver care and control treatment costs, or restrictions based on patient characteristics.

The database includes 158 drugs, 302 drug indication pairs (e.g., some medicines are indicated for more than one condition, such as chronic idiopathic urticaria vs. moderate to severe persistent asthma) and 3,417 coverage determinations. The data set does not include coverage policies for Medicare or Medicaid beneficiaries.

The researchers found that uniformity is elusive: Less than half (48 percent) of all drug coverage decisions were consistent across 75 percent of health plans. Only 16 percent of the 302 drug-indication pairs were covered the same way by all health plans.

Although it is unclear why such discrepancies exist, there are a number of potential explanations: Health plans negotiate different discounts with product manufacturers or have different contracting arrangements. Health plans tailor decisions to their specific populations and have different financial resources. Finally, health plans base their coverage decisions on different decision inputs. For instance, some consider cost-effectiveness analyses while others do not.

“This variation in coverage may substantially influence patient access to specialty medicines,” explains Jennifer Graff, PharmD, Vice President of Comparative Effectiveness Research at NPC and one of the study authors. “For patients switching between insurers or employers, differences in plans’ coverage decisions may result in care disruptions. It also requires that physicians must tailor care not only to diverse patients, but also to the multiple insurance plans that cover their patients.”

Coverage decisions not only are inconsistent but restrictive. The study also found that, compared with Food and Drug Administration (FDA) approvals, payer coverage was more or completely restrictive in 38 percent of all coverage decisions. Coverage decisions were consistent with the FDA labeled-indication for 52 percent of all decisions, less restrictive for 8 percent, and mixed (more restrictive in one way and less restrictive in another) for 2 percent. Given the wide variation among plans, these findings reveal the need for greater transparency in the evidence used to determine plan coverage decisions.

“Beyond approval from the FDA, health plans determine whether or not new treatments will be covered. Health plans make different decisions on which treatments to cover and what restrictions to implement. We expected to see some differences in drug coverage across plans due to differences in budgets and covered beneficiary populations. What was not known was the extent to which these coverage restrictions occurred,” says James Chambers, PhD, MPharm, MSc, lead author of the study and Associate Professor of Medicine, the Center for the Evaluation of Value and Risk in Health, Tufts Medical Center. “We found that even if a drug was covered, many treatments had multiple restrictions prior to patients being able to access these medications.”

The most common restriction types were step edits, or when a prior treatment must be proven ineffective before the plan will cover the treatment (73 percent), limitations on the types of physicians who could prescribe the medication (31 percent), and restrictions to certain patient subgroups (16 percent). There were multiple coverage restrictions in 22.5 percent of decisions.

Coverage was less restrictive for medicines indicated for a pediatric population, orphan disease, or cancer-related indication than drugs indicated for other diseases. Medicines had fewer coverage restrictions if they were administered by physicians, had no therapeutic alternatives, were approved under an FDA expedited review program, had no safety warnings, or were approved less recently.