The Old Managed Care Fights Were About Access to Doctors; Today, It's About Access to Drugs

The managed care wars of the 1990s, when patients complained that health plans would not pay for them to see the doctor of their choice, seem almost quaint in light of today’s battles.

With the rise of narrow networks, there are new fights about access to doctors, of course. But the more troublesome battles, which are sometimes literally life-threatening, involve access to drugs.

Yesterday’s news of an anti-trust investigation, and reports of new, “non-preferred” tiers for generic drugs, all point to health plans and pharmacy benefits managers seeking work-arounds to the mandate of the Affordable Care Act (ACA) that consumers have access to coverage, regardless of pre-existing conditions.

For patients who have suffered for years with diabetes, HIV, hepatitis C, and other chronic conditions, the ACA promised a lifeline to treatment after years of impossibly price care or no insurance at all. But as many discovered, the world of managed care said, “Not so fast.”

Among the developments:

• According to the Wall Street Journal, the US Justice Department has issued 2 subpoenas to salespersons for generic drugmakers, asking about conversations with competitors. Filings say the investigation involves possible violations of anti-trust laws
• The insurer Cigna this week signed a consent order with Florida insurance regulators to avoid litigation, and agreed to cap the price of 4 popular HIV/AIDS drugs at $200 a month. The company previously placed these drugs in its specialty tier, with coinsurance rates of 40% to 50%, and required prior authorization for refills. Both were seen as barriers to HIV patients enrolling in the plans.
• This fall, an editorial in The American Journal of Managed Care gained widespread attention when authors Gerry Oster, PhD, and A. Mark Fendrick, MD, highlighted a practice of placing drugs for which there is no second option in a “non-preferred” tier, which the authors said charged patients a premium just for having the condition. The authors found a plan that placed metformin, the most basic first-line therapy for type 2 diabetes mellitus, in the “non-preferred” generic tier.

Prices for newly approved specialty drugs to treat cancer, hepatitis C, and rheumatoid arthritis have grabbed plenty of headlines—and plenty of pushback from health plans. But the quiet rise in the cost of generic drugs has only recently gained notice. As the Journal reported, last month Congress asked 14 generic drug manufacturers to provide data on why prices are rising so quickly.

As numerous studies have noted, price is both a consumer and a health issue, since patient out-of-pocket costs are directly tied to adherence. When patients cannot afford medications, some number of them will go without; as Oster and Fendrick noted, this will create costs and consequences elsewhere, and is unfair to hospitals and physicians who are now being reimbursed based on their patients’ healthcare measurements and readmission rates.

“Without choice, such policies are simply punitive and run counter to established principles of formulary design and management,” the authors wrote. “They also may increase utilization and costs elsewhere in the healthcare system, and ultimately may undermine emerging payment reform initiatives designed to reward physicians for attaining disease-specific performance metrics.”

Around the Web

Is All ‘Skin in the Game’ Fair Game? The Problem With Non-Preferred Generics

Justice Department Probes Generic Competition After Price Hike Reports

Cigna Agrees to Reduce Costs of HIV/AIDS Drugs in Florida

How Insurers Are Finding Ways to Shift Costs to the Sick