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Drug use differs for exchange members


Two recent studies show that members who obtain health insurance through state or federal insurance exchanges use more specialty and generic drugs than their counterparts in commercial plans.

Two recent studies show that members who obtain health insurance through state or federal insurance exchanges use more specialty and generic drugs than their counterparts in commercial plans.   

Based on a national sample of more than 80 million de-identified pharmacy claims administered by Express Scripts between January 1, 2014 and July 31, 2014, Exchange Pulse shows that health exchange members are 59% more likely to have filled a prescription for a specialty medication. 

Members aged 18 to 44 filled almost twice as many specialty drug prescriptions than members in the same age group with commercial insurance. HIV tops the list of specialty drugs for members aged 18 to 64, especially those with low median income. Low median income members consume 56% of all specialty drug claims under the exchanges. The expensive new drug for hepatitis C, Sovaldi, is also taking its toll on total drug spend for exchange members, whereas transplant drugs head the list on the commercial side. 

Seven out of 10 of the most costly medications were specialty drugs under the exchanges compared to four out of 10 in commercial plans.

Related:Keep specality and generic drug pricing on your radar

Specialty medications comprise 1.3% of prescriptions, or 38% of total pharmacy spend for members under the exchanges compared to 0.82%, or 28% of total drug spend, in commercial health plans, according to Exchange Pulse.


Huppert, vice president of health reform for Express Scripts, a pharmacy benefits manager (PBM) based in St. Louis, Missouri, attributes the higher utilization of specialty drugs among exchange members to pent-up demand. Many exchange members were not previously covered by insurance, and as many as two-thirds of health exchange members now under the purview of Express Scripts did not have insurance prior to 2014. In addition, she says that tax credit subsidies available through the exchanges have made it possible for many members to afford more expensive specialty drugs.

Express Scripts attributes some of the increase in HIV drugs to federally-funded programs for HIV patients, which have pushed most of the costs onto private health insurers. 

A study by CVS Health, based in Woonsocket, Rhode Island, aligns with the Express Scripts report. The retailer analyzed 894,000 prescription drug claims from January to September 2014  comparing exchange members to commercial and managed Medicaid members . 

The report found that exchange members utilized more specialty drugs (1.3%) than their counterparts in commercial plans (0.95) and Medicaid plans (0.6%), resulting in higher spend as a proportion of total drugs costs for the exchange plans (35.8%), managed Medicaid (30.1%) and commercial (28.3%).

William Shrank, MD, chief scientific officer for CVS Health, notes that the higher use of expensive antiviral medications among exchange members affected costs, along with the availability of few generics for HIV and the high cost of Sovaldi.

As in the Express Scripts study, antiviral medications to treat HIV for CVS members headed the list in gross spending from January to June 2014, ranging from 17.7% (percent of gross specialty medication costs) in commercial plans to 35.2% for managed Medicaid, with exchange plans at 33.1%.

Cancer drugs ranked fourth on the list of highest gross spending among specialty drugs for all three types of plans. Although more cancer drugs were used than drugs for HIV and hepatitis C, there are more generic cancer drugs, thus keeping costs lower. CVS Health suggests that many exchange members might not have had access to some oncology drugs prior to their enrollment.

Related:The rising cost of generic drugs

NEXT: Exchange members fill more generic RXs


Exchange members fill more generic Rxs 

Express Scripts finds that across most therapy classes, age groups and income levels, health exchange members fill more prescriptions for generic drugs. Their overall 87% generic fill rate outpaced health plan members by 6%. 

The Express Scripts study suggests that exchange members receive incentives to use generics, driven by a greater differential between generic, preferred and non-preferred brand tiers. In addition, they might be unable to afford higher-priced brand drugs.

While the number of claims for nine out of 10 chronic conditions is similar for those in and out of exchanges, a few exceptions stand out:  

  • Use of pain medication is 39% higher in health exchange plans;

  • Use of depression medications is 12% higher in health exchange plans;

  • Use of contraceptives is 32% higher in commercial health plans because members of exchanges are older and less educated about the importance of using contraceptives, Express Scripts suggests.

The CVS report indicates that, excluding specialty drugs, average total costs per claim were 22% less in exchanges than in commercial plans. CVS Health attributes the higher savings to a larger proportion of generic use among exchange members (88%), Medicaid (85%) and commercial (83%). Shrank anticipates that the higher use of generics in exchange plans should lead to better compliance and less cost, and ultimately, improved outcomes.

Overall drug utilization 

The Exchange Pulse report also indicates that nearly half of exchange members (49%)--even those who did not register until April 2014--used their pharmacy benefit and filed at least one claim, closing in on commercial members (55%) who have filed a claim. 

When members joined the exchanges in 2014, more of them had chronic disease than their commercial counterparts. Huppert says that stands to reason because many of them were not insured and were held back by pre-existing conditions, which is no longer a barrier.

On the other hand,  Shrank says he was not surprised to find that, based on the CVS study, there wasn’t much difference in overall utilization of drugs by members in the exchange compared to those in the commercial and Medicaid populations. 

Nearly one-third (28.6%) of members in exchanges filled at least one prescription each month, similar to members in commercial plans (28.1%). 
Use of 90-day prescriptions for maintenance drugs by exchange plan members increased since January 3, 2014 to 3% of all prescriptions, not quite as high as the 3.9% by commercial members.

NEXT: Exchange members face higher out-of-pocket costs


Exchange members face higher out-of-pocket costs

Exchange members have higher out-of-pocket costs - 36% more than those in traditional health plans - but their overall plan costs are 10.4% less. The Express Scripts report indicates this might be due to cost containment achieved through home delivery, narrow networks and less robust benefits.

Related:Low-income adults spending 5% or more on out-of-pocket expenses

The CVS Health report coincides with the Pulse report, indicating that cost share is higher for exchange members. While average cost share decreased for both exchange and commercial members through June, the former was higher at 20.3% versus 17.9% for commercial members in January 2014; however, cost share in both types of plans decreased each month through June. CVS’ Shrank says expectations were for higher costs per prescription drug claims than materialized.

The CVS study also shows that cost share for commercial members leveled out from June to September while cost share for exchange members continued to decrease. Those decreases were expected to continue through the remainder of 2014, dropping lower than for commercial members. Shrank says that, while out-of-pocket expenses in the exchanges were initially higher than in the commercial plans, they decreased during the year as members gained a better understanding of their pharmacy benefits. CVS Health will continue to monitor drug utilization during the second year of the exchanges.

Caroline Pearson, vice president of Avalere Health, a healthcare analytics company based in Washington, D.C., says that an analysis by Avalere indicates that patients accessing specialty medications through the exchanges are more likely to experience higher out-of-pocket costs in 2015 than 2014. “In order to keep premiums down, exchange plans are increasing deductibles and offering skinnier plans,” she says.

The number of silver plans charging coinsurance greater than 30% for specialty drugs has increased from 27% in 2014 to 41% in 2015. The number of bronze, gold and platinum plans using coinsurance of more than 30% also increased in 2015 over 2014--38% to 52%, 20% to 22% and 17% to 26%, respectively.

Both Shrank and Huppert recommend health management strategies for exchange members to control costs. “We need to apply more benefit management strategies, such as reinforcing the appropriate use of medications and adherence programs, to the exchange population [just] as we offer members in Medicaid, Medicare and commercial plans,” Shrank says. “Exchange members are more similar to those in the other plans than they are different.”

Adds Huppert, “Because exchange members have a higher utilization of specialty drugs, health plans should pay close attention to its patients with high-cost, complex conditions, offering them greater care support to ensure optimal outcomes--similar to programs and strategies that commercial plans are using.” 

Mari Edlin is a freelance writer based in Sonoma, California.

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