Sick Patients See Increasing Costs for Specialty Drugs
Employers cut back on insurance, leaving consumers stuck with the bill
Thursday, May 31, 2012
If you are one of the millions of Americans who take specialty medications, you may have noticed your hand digging deeper into your pocket.
Specialty drugs are those medicines that are higher in cost, and used to treat complex and chronic ailments like multiple sclerosis, hemophilia or cancer for example. In recent years, specialty drug users only had to shell out a $20 or $50 copay, but now patients have to pay a percentage of the drug's cost, along with copays, which can amount to yearly costs in the thousands.
The Los Angeles Times reported of an HIV patient who paid a copay of $80 per month for his specialty medication, but now has to secure $450 per month to maintain his health. Many employers are no longer using the copay model for medicines, and they're able to do so by reclassifying certain medications, forcing patients to take on more of the financial responsibility or copayments.
Specialty drugs have no cheaper generic version; so many times patients have no alternative than to spend the high costs to remain well.
"All of a sudden you're starting to count pills and asking friends to borrow some," said Robert Gomer in an LA Times interview. "It was a very stressful situation to be faced with."
Many drugs are made from chemicals; therefore they can be used to produce both generic and brand-name varieties. However, specialty drugs are often extracted from living organisms, so no alternatives can be used.
Employer health plans are also finding it more and more expensive to offer these drugs under coverage, as the cost can exceed $1,200 a month per employee, according to Ha Tu, researcher at the Center for Studying Health System Change.
Tu recently created a report on specialty drugs that breaks down the financial challenges for employers, health plans and its enrollees.
Tu also says that although specialty drugs are prescribed for merely one in every 100 health plan enrollees, they account for nearly 12 to 16 percent of "commercial prescription drug spending", and costs are expected to keep rising.
In an effort to combat exorbitant treatment costs, many employers have adopted the "Value-based insurance design" (VBID), that provides employees with monetary incentive to select high-value health treatments, while turning down treatments that have a history of being ineffective or over prescribed.
According to a Mercer survey, 17 percent of employers with 500 employees or more, used VBID in 2011, in effort to cut out expensive and unnecessary treatments, and many believe this same policing can be applied to expensive specialty drugs.
But critics of VBID feel employers shouldn’t regulate what type of medicines its workers should use, and many of VBID’s selected treatments still come with high copays and coinsurance.
Julie Stone, a senior consultant with the benefits consultant company Towers Watson, says shopping around for cheaper medications isn’t the best method for patients with serious and chronic illnesses.
"With people as sick as the patients we’re talking about, I don’t think they’re going to say, ‘Is there a less expensive injectable drug I can take?’ " she says. "It’s a whole different dynamic," she told the Washington Post.
And the tug of war continues between insurance companies, employers, and the sick consumer who is in need of specialty medications.