How Should California Officials Deal With ‘Specialty Tier’ Pricing of Drugs?

, California Healthline, Thursday, May 22, 2014

Prices for some prescription drugs have fallen in recent years, but those for some specialty drugs — including drugs used to treat cancer, arthritis, hepatitis C and multiple sclerosis — have risen significantly, according to a new report from the IMS Institute for Healthcare Informatics.

Americans spent more than $329 billion on drugs last year, the report showed, with a very small percentage of consumers — those who need the most expensive drugs — paying considerably more of the overall total. About 2.3% of all prescriptions in the U.S. last year accounted for nearly one-third of the total out-of-pocket costs for consumers, according to the report.

CVS Caremark, a pharmacy benefit manager, reported last month that spending on specialty drugs increased by 15.6% in 2013. By comparison, spending on traditional medications grew by 0.8%.

Express Scripts, another drug benefit manager, predicted the country’s spending on specialty drugs will increase by 63% between 2014 and 2016.

The disproportionate rise in the out-of-pocket cost of particular drugs can be attributed in part to “specialty tier” pricing. Instead of paying the standard copayment for drugs, consumers whose prescriptions fall into specialty tiers are sometimes required to pay a percentage of the total cost. Specialty tier pricing produces tabs that can run into thousands of dollars per month for patients with chronic conditions.

Some consumer advocates say specialty tier pricing is discriminatory and requires consumers with chronic conditions to unfairly bear a higher financial burden for drug coverage. They are calling on California policymakers to regulate specialty tier drug pricing either using the Affordable Care Act or new state policies.

We asked stakeholders and experts how California legislators and state health officials should respond.

We got responses from:

Source: California Healthline, Thursday, May 22, 2014