Lawmakers find themselves caught between high drug prices driving up the cost of insurance and patients forced to jump through hoops to get the pharmaceuticals they need.
By Rose Hoban
For many patients with complex diseases such as multiple sclerosis or rheumatoid arthritis, new drugs hold out the promise of a cure or, at least, keeping symptoms at bay.
But for many of those patients, those same drugs can be wildly expensive. For patients with severe psoriasis, the new drug, Otezia, has an estimated wholesale price of $22,500. And Avonex, a drug to treat multiple sclerosis, has seen its price soar past $60,00 a year, up more than 350 percent since 2013.
Some insurers have been requiring patients to obtain prior authorization to get medications and to try cheaper drugs before they can get access to the newer medications. The practice is called step therapy or, sometimes, “fail first.” Lawmakers at the General Assembly were gathering testimony about the practice Wednesday afternoon at a hearing of the House Select Committee on Step Therapy.
The legislators heard primarily from doctors who treat patients in need of some of these expensive drugs. The doctors expressed frustration at the paperwork required of them and said their patients have to jump through hoops to get their medications.
Four or five steps
“Nationwide, the issue of step therapy is becoming a larger and larger issue, as we see more and more insurance companies using these protocols as cost-control measures,” said Greg Schmizzi, a rheumatologist in Wilmington.
It’s not always insurance companies, per se, that cause the doctors’ frustration. Sometimes insurers contract with a “pharmacy benefits manager” to handle prescriptions. Often, when an employer buys insurance from a large company like Blue Cross and Blue Shield of North Carolina, they also contract with a separate pharmacy benefits manager to help control the drug costs.
And according to many, it’s those pharmacy benefits managers that require doctors and patients to jump through the most hoops.
“We have seen harsh requirements by pharmacy benefit managers, requiring five or more failed therapies before we can give a patient the medication that we believe is best,” Schmizzi said.
He and others described patients who were made to re-try drugs they’d already found didn’t work for them, forced to use medications that weren’t as effective as another or use medications that could cause debilitating side effects.
Some patients have ended up sicker as a result.
“This bill would offer pathways for physicians to make reasonable decisions about the care their patients should be receiving,” Schmizzi said.
Direct to consumer
Step therapy requirements grew out of big changes in the pharmaceutical world in the mid-1990s.
The U.S. Congress passed legislation allowing direct-to-consumer advertising by pharmaceutical companies in 1985, but not much changed. Then Congress loosened rules around the practice in 1997. That’s when commercials touting the next big thing really took off. Patients started demanding from their doctors newer medications they saw on television and heard about on the radio.
Costs soared; hence the advent of step therapy.
“You may get the exact same outcome with the cheaper drug, so they want you to try that first,” explained Joe Moose, an independent pharmacist in Charlotte. “A lot of times, between marketing and all that, companies have made it easier or more convenient for the doctor to write the more expensive prescription first.”
According to the trade-analysis firm Kantar Media, American pharmaceutical companies spend about $4.5 billion annually advertising to the general public, on top of hundreds of millions spent marketing to doctors. And Kantar reports that two-thirds of adults have taken “some kind of action as a result of seeing healthcare advertising.”
“If I had my way, I’d get rid of direct-to-consumer advertising yesterday,” Rep. Greg Murphy (R-Greenville), a urologist, said after the meeting. “It adds so much more cost to our system than ever needs to be. Research and development used to be the number-one cost for medication and now it’s direct-to-consumer advertising.”
“But that’s a federal issue; that’s not one we’ll be able to solve at the state level,” he said.
Moose said that when step therapy is in line with the evidence, it can make sense and save money. But when asked how often he sees restrictions that don’t line up with the evidence, he answered easily: “Daily.”
“When step therapy is based off of cost as a first indicator, it starts to become dangerous medicine,” he said.
Where to save money
Tom Friedman, policy head for the North Carolina State Health Plan for state employees, said patients requesting high-priced drugs has been an issue for them.
“The plan saves about $10 million a year through step therapy,” said Friedman, who noted that the total cost of prescription drugs for the State Health Plan runs more than $700 million a year.
But he said their problem is not patients needing drugs like the ones described by Schmizzi.
“We’re talking about things from allergy medication, from heartburn, to ulcers,” Friedman said. “We’re trying to do a lot of different things, not just targeting very specific conditions.”
He said the SHP only uses one or two steps, not four or five as described by the doctors in the room.
And Friedman told the panel the biggest savings on step therapy at the SHP come from the heavily advertised heartburn medication Nexxium, which still has a pharmaceutical patent and commands top dollar. He said the plan saved $1.2 million last year by getting patients to accept prescriptions for Prilosec, an older, cheaper drug in the same family of medications.
“Some of the conditions we talked about today aren’t even on the top 20,” Friedman said.