States Take the Lead with Policies to Protect Residents with Chronic Conditions from High Out-of-Pocket Drug Costs

While there were many campaign promises to lower prescription drug costs, to date there’s been little federal action to reduce prescription drug prices or lower patients’ costs. States, however, are taking the lead with policies designed to protect consumers from the high out-of-pocket costs associated with expensive specialty drugs, many of which lack low-cost generic alternatives.

A new research brief from Georgetown researchers details the findings from a 50-state survey of action on such policies. The brief was supported by the Robert Wood Johnson Foundation’s Policies for Action (P4A) program, and was done in partnership with the Urban Institute.

Researchers found that eight states have leveraged their authority over health plan benefit design to protect their consumers from high out-of-pocket costs for specialty medication. These states-California, Colorado, Delaware, Louisiana, Maryland, Montana, New York, and Vermont-either place limits on out-of-pocket spending or require certain plan designs that reduce out-of-pocket costs.

The researchers also conducted supplementary stakeholder interviews with state marketplace officials, state regulators, insurance company representatives, and consumer advocates in four of these states (California, Colorado, Louisiana, and Montana) to assess the goals, impact, and results of their policies, and observed the following:

  • state policymakers believe the new standards are meeting their goals of reducing financial barriers to expensive medication and prohibiting discriminatory benefit design against high-cost enrollees;
  • both patient advocacy groups and drug manufacturers promoted and shaped their state policies;
  • the effect of these policies on patients’ use of specialty drugs and on insurance premiums is unclear because of a lack of data.

Ultimately, these states took action to help relieve financial strain on their residents with chronic conditions, and to make it easier for them to obtain life-saving prescription drugs. Until federal policies to reduce the prices of prescription drugs are adopted, other states may seek to leverage their authority over health benefit design to protect their vulnerable consumers from high out-of-pocket costs related to their prescription drugs.

1 Comment

  • Mark Meade says:

    While I’m concerned about the availability of some necessary drugs, far too many drugs being pushed by the so called ethical pharmaceutical industry are of at best of questionable efficacy. When it takes longer to describe the life altering and life ending potential side effects of a new drug why should it be allowed on the market. Then there is the highly immoral pricing that such unlimited payment requirements support. We need to ban all direct to consumer advertising of drugs and crated an efficacy panel that reviews drugs and sets medical criteria for their safe and effective use. Such information should be readily available to the medical community and in cases of drugs with limited efficacy require informed consent of patients before they can be dispensed. Then there is the question of the actual pricing of new drugs, especial those for terminal conditions, where, without some form of control, demand can be virtually unlimited. Criteria for reasonable pricing needs to be developed and the cost of these drugs need to be scored against these criteria. A company would be free to charge more but users and prescribers would be informed of the cost in excess of reasonable margins and perhaps limits could be placed on reimbursement above these targets.
    The Cost is No Object philosophy set up by out of pocket maximums without some form of control on that cost only leads to higher prices for these drugs and increased introduction of dubious medications.

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