Washington Health Policy Week in Review Archive

Washington Health Policy Week in Review is a weekly newsletter that offers selected stories from the daily newsletter CQ HealthBeat.

  • May 23, 2016 Issue
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Insurer Highlights Six-Fold Rise in Spending On Hepatitis Drugs

By Erin Mershon, CQ Roll Call

May 19, 2016 -- Hepatitis drug spending grew by more than 600 percent between 2013 and 2014, according to a new report from the Blue Cross Blue Shield Association (BCBSA). Overall, the plans associated with the group experienced a 26 percent jump in spending on specialty drugs over those two years.

The six-fold increase comes as lawmakers and regulators face increasing pressure to address the rising costs of prescription drugs. In just the last year, the issue sparked congressional hearings, new proposed regulation and comments from the presidential frontrunners in both parties.

Insurance companies like those affiliated with Blue Cross Blue Shield have encouraged policymakers to curtail spending on prescription drugs, citing the costs as a major driver of premium increases. Pharmaceutical companies, meanwhile, say insurers are cherry-picking data and focusing on outliers.

Overall, BCBSA found that annual spending on specialty pharmaceutical drugs rose by $87 per member, in a survey of claims data from 70.5 million members. The association said the increasing prices of those drugs was the main driver in the growth of that spending; increasing utilization had a smaller effect.

The group, which spent $14.6 billion on specialty drugs overall, saw hepatitis spending skyrocket from $150 million to $1.09 billion. But that 612 percent rise was unusual—spending on inflammatory drugs, which saw the next biggest increase, grew by 29 percent between 2013 and 2014. Other drug categories had smaller increases.

The Pharmaceutical Researchers and Manufacturers of America called the report "misleading" in a statement. They blasted the insurance industry for what they said was an effort to discourage patients with costly conditions from enrolling in their plans, pointing to research from Avalere Health that they say shows health plans put medicines for conditions like cancer and multiple sclerosis on the highest cost-sharing tier of their formularies, "even when generics are available."

The report "cherry-picks data in an attempt to justify discriminating against patients with chronic conditions such as cancer, rheumatoid arthritis, and multiple sclerosis," spokeswoman Holly Campbell said.

The BCBSA report also found that in 2014, specialty drug spending was 17 percent higher for members in the individual market than those in the employer market--largely because individual market consumers were utilizing more drugs, especially for cancer, viral infections and hepatitis.

BCBSA's data included claims from both the pharmacy and medical benefits membership, and the data showed a far higher increase for drugs covered by the former. They attributed the difference in part to increasing use of new oral and self-injectable specialty medications that are typically covered under the pharmacy benefit.

They also attributed the difference to a "pharmatization" of drugs—"a tendency of health plans to move existing medications billed through medical benefit to pharmacy benefit in order to improve management of these medications," according to the report.

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