Prescription Drug Pricing Bill Will Protect Millions of New Yorkers
June 8, 2010
As the cost of prescription drugs continues to rise, health insurance plans have responded by creating new cost-sharing “specialty tiers” within their prescription drug formularies. In states such as California, Maryland, Minnesota, Nebraska, and Wisconsin, insured consumers with chronic diseases and life-threatening illnesses are charged “coinsurance” (typically 25%-33% of the cost of the drug per month) instead of a flat co-payment for drugs they need to save their life or to prevent disease progression—many of which cost of hundreds or thousands of dollars each month.
Today, I released a report (”Prohibiting Specialty Tiers in Prescription Drug Formularies”), which you can download as a PDF or read below.
Prohibiting Specialty Tiers in Prescription Drug Formularies
Specialty tiering is a rapidly growing practice, and we need to stop it in New York while we still can. In 2004, only 3% of health insurance plans nationwide included a specialty tier, but that number jumped to 17.5% in 2009—and there is reason to believe that insurers in New York are contemplating incorporating specialty tiers into their plans. This is antithetical to the purpose of insurance, which is the spreading of costs. Charging New Yorkers who are the most ill for the bulk of the cost of insurance is morally reprehensible—and terrible public health policy.
The drugs that insurance plans commonly categorize as “specialty” drugs under specialty tier schemes are used to treat conditions that impact almost four million New Yorkers. These diseases and conditions include: breast cancer, colorectal cancer, leukemia, non-Hodgkins lymphoma, multiple sclerosis, rheumatoid arthritis, hemophilia, HIV and AIDS, cystic fibrosis, Chron’s disease, ulcerative colitis, hepatitis B and C, diabetes, psoriasis, kidney disease, anemia, and neutropenia, among other serious medical conditions.
When severely ill people face financial problems because of medical bills they are four to five times more likely to stop treatment. Banning specialty tiers in New York will ensure that people with life threatening illnesses and chronic diseases never have to choose between spending hundreds—or even thousands—of dollars on the drugs they need to stay alive or to pay the rent or buy groceries for their family.
The bill (A.8278-b/S.5000-b) has passed the State Senate and is scheduled for a vote in the Assembly’s Insurance Committee on Wednesday.
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2 Responses to “Prescription Drug Pricing Bill Will Protect Millions of New Yorkers”
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While I certainly applaud your efforts to make prescription drugs more affordable, and agree that in many instances the newer, more expensive drugs are more appropriate in many situations, I am concerned that your attempt to get rid of a tiered system is only a partial solution that may backfire. Newer medication is patented and therefor not subject to a competitive marketplace and can be more expensive. Furthermore, even branded older drugs are more expensive but necessary in certain conditions (notably epilepsy) where even mild fluctuations in drug blood level that can occur when patients switch between branded and various generic products can precipitate seizures.
What I have seen in some cases is that some drugs are dropped or not included in a payers formulary, so that unless the patient bears the full cost of the drug (which in many cases is impossible), that patient has no access to the drug. So while it may seem terrific to eliminate a tiered system, that alone does not eliminate the problem of affordability of the newer drugs.
Its also easy to blame the pharmaceutical companies and say that they charge too much, and perhaps they do in many instances, but they are also businesses that must invest billions of dollars into research, development and marketing of compounds, many of which never reach it to market. If the companies are not incentivized to make a profit, research and development will dry up.
Finally, medicare part D plans, which utilize government payers are the worst offenders in terms of availability of drugs. I have had many patients who could no longer afford their medically necessary tranquilizers because their payers deemed them “not covered”. This is the true outrage, and the fact that these are government sponsored plans is even worse. Please, clean up your own house first!
Please, go ahead and try to make all prescription drugs more affordable so that my patients (and family members) don’t have to chose between medical care and food and utilities, but please don’t try to pull the wool over your constituents eyes and tout the removal of a tiered pharmaceutical benefit system as a victory. It is not if the drugs are simply removed from the formulary and patients are forced to use other, perhaps less efficacious drugs.
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