Each year, millions of Americans choose their health insurance plans and ask: “What kind of coverage do I have for prescription drugs? Will I be able to afford the drugs I need?” A new report from the Institute for Clinical and Economic Review (ICER) assessed insurance plans and found that coverage policies largely provided fair access on paper, although it is difficult to determine if this translates into real-world access and affordability for patients.
ICER’s third annual Barriers to Fair Access report examines whether formularies (i.e., the list of drugs covered by a health plan) provide fair access to drugs. It builds on work with stakeholders — including drugmakers, insurers, patient organizations, and clinical specialty societies — to understand whether an insurer’s policies provide fair access to treatments. “Fair” policies balance the dual responsibilities of providing access to treatments while keeping insurance affordable for everyone.
This year, we reviewed formularies for 19 health plans across the commercial, state health exchange, and federal markets, including those offered by the largest insurers and pharmacy benefit managers (e.g., CVS, Optum, Express Scripts). We asked insurers to provide their policies for 18 drugs that treat conditions such as multiple sclerosis, lupus nephritis, and asthma, and compared them against the fair access domains summarized below:
- cost sharing: whether drugs were included on a formulary and on what cost-sharing tier
- clinical eligibility: whether the clinical criteria developed by insurers that patients must meet before health plans will cover treatment reflects the best available evidence on treatments and guidelines for managing the condition
- step therapy: whether step therapy requirements — a system under which insurers require patients to try other drugs before accessing their preferred drug — exceed a maximum of three steps
- prescriber restrictions: whether prescriber restrictions (e.g., requirements that a drug for a heart condition be prescribed by a cardiologist) were appropriate
- transparency: whether clinical eligibility criteria and cost-sharing information were available to consumers.
We were only able to compare policies against a subset of ICER’s broader criteria for fair access. While we were able review insurers’ written policies, we were unable to assess criteria related to the implementation of these policies (e.g., how efficiently insurers manage prior authorization processes that determine whether patients meet certain criteria before insurers will provide access to a treatment). Understanding the real-world administration of these policies would have required access to data that is considered confidential.
Insurers’ policies were structured to provide fair access in the clinical eligibility, step therapy, and prescriber restriction domains — 97 percent to 100 percent of plan policies met ICER’s criteria in those categories. Insurers’ policies met ICER’s criteria for cost sharing less often; only 47 percent of state health exchange formularies and 70 percent of commercial formularies placed at least one drug or its therapeutic equivalent on the preferred tier. Patients pay less for drugs on the preferred tier compared to other tiers; they pay full price for drugs excluded from the formulary unless they receive a medical exception.
Insurers generally fared worse in transparency analyses. While they frequently made clinical criteria for coverage available, those policies were typically found in provider portals, which may not be easily accessible to patients. We found that policies governing “continuation of coverage” requests (i.e., the process by which an individual can ask a new insurer to cover a current medication) were often missing or vague. Only 57 percent of plans disclosed whether they participated in copayment adjustment programs, which determine whether patients may use manufacturer coupons or patient assistance programs to help pay for their drugs.
For the subset of fair access criteria we could evaluate, most coverage policies were structured to provide fair access for this set of 18 drugs. Insurers’ cost-sharing policies fell short of ICER’s criteria somewhat frequently, and several aspects of insurance policies were insufficiently transparent to consumers.
There are important limitations to our analysis. Patient organizations frequently highlight affordability challenges and treatment delays because of prior authorization and step therapy requirements, but we were unable to assess how plans administer their policies. To improve administrative transparency, states or the federal government could require health plans to disclose information on how they adjudicate prior authorization requests, including their rates of denial. The Centers for Medicare and Medicaid Services is considering a proposal to require certain health plans to disclose this information for medical items and services, and could expand this to include prescription drugs.
Formulary inclusion and tier placement are imperfect proxies for out-of-pocket costs. In the commercial market, large employers set cost-sharing amounts for a formulary tier, while the plans themselves pick the cost-sharing amounts for smaller employers. Therefore, we were unable to identify actual cost-sharing amounts, which may be unaffordable for some patients.
The transparency of policies to consumers was lackluster. Ideally, insurers would communicate in plain language to individuals whether their drugs will be covered and at what cost. Health plans should consider revising their materials to meet these goals.