Pharmacy benefit designs that place drugs on tiers based on cost sharing and authorization requirements are not a recent development. These designs started in the 1990’s as simple, two-tiered benefit structures with a tier for generic drugs and a tier for brand name drugs. In recent years, however, tiered benefit designs have become more complicated, as insurers look to them as one of the few cost-control mechanisms available since the enactment of the Affordable Care Act (ACA).
The 2014 marketplace plans included tiered pharmacy benefit structures with as many as six tiers, with additional cost sharing and authorization requirements on the higher tiers. As tiered benefit designs expand, specialty drugs that treat serious and chronic illnesses often end up on those higher benefit tiers causing those most in need of specialty drug therapies to be faced with the most burdensome cost and authorization requirements.
Fellow CHIR faculty member David Cusano and I explore the subject of specialty drugs in tiered pharmacy benefit designs in an issue brief prepared for the Robert Wood Johnson Foundation’s State Health Reform Assistance Network program. The brief, “Specialty Tier Pharmacy Benefit Designs in Commercial Insurance Policies: Issues and Considerations,” explores the development and growth of tiered pharmacy benefit designs and discusses the three major challenges presented by tiering specialty drugs: cost to access the drugs, patient adherence to drug therapies, and the potential for tiered benefit structures to violate the ACA’s anti-discrimination provisions.
A close look at the legislative initiatives put forth by nine states in attempts to address these challenges is included in the brief, as is a review of the commonalities and differences among the state and federal approaches. Additionally, we offer suggestions for responding to the issues raised by tiering of pharmacy benefits and for assuring that the people who rely on specialty drugs are able to access them. You can read the issue brief here.