Specialty drug coverage undefined for essential benefits

October 1, 2011

Four-tier formularies have emerged as one method to control the rising costs associated with specialty pharmaceuticals.

NATIONAL REPORTS-Four-tier formularies have emerged as one method to control the rising costs associated with specialty pharmaceuticals, but it's not yet clear whether this approach will be applied to formularies in the government-defined essential benefit package. The coverage package will set the minimum offerings required for health plan products sold through state insurance exchanges.

"I think it's really premature at this point to speculate on what's going to be in that essential benefits package," says Judith Cahill, CEBS, executive director of the Academy of Managed Care Pharmacy.

Cost sharing for specialty pharmaceuticals is a complex issue with no clear answers on how payers can balance access with utilization management, according to experts. According to Avalere Health, 85% of Medicare Part D plans currently have a specialty tier.

"Employers and the federal government have to come up with a different criteria for coverage and for utilization, and cost sharing has to be at an affordable level," he says. "The real issue is, do you really need the specialty drug or not?"

While most employers require coinsurance, in which patients pay a percentage of the costly specialty drugs, Cohen says this strategy may be unrealistic. Many specialty medications have such high prices that even a percentage of the cost could be unaffordable and discourage members from getting treatment. According to the Kaiser Family Foundation, lawmakers in a dozen states are considering eliminating specialty tiers-presumably to protect access.

Cohen suggests that accountable care organizations or state boards setting up healthcare exchanges instead include a coverage category specifically for specialty health benefits, beyond the medical benefits and traditional pharmacy benefits. And it would be about more than just biologic drugs.

"I would put certain drugs and certain diagnostic tests in that benefit," he says. "I'd have certain copayments for each, and I'd have certain prior authorization criteria. I think that's the next wave."