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11 min read 30th September 2020

Cornerstones of ‘Fair’ Drug Coverage

In the focus on US drug prices, ICER has contributed thinking on determining when price aligns with patient benefits. Less debated is whether insurance coverage provides patients with fair access to a drug with a fair, value-based price. But how…

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In the focus on US drug prices, ICER has contributed thinking on determining when price aligns with patient benefits. Less debated is whether insurance coverage provides patients with fair access to a drug with a fair, value-based price. But how do we define fair access? This paper from ICER and OHE authors develops a fair access framework, proposing Ethical Goals for Access and Fair Design Criteria for cost sharing and prior authorization protocols.

In the focus on US drug prices, ICER has contributed thinking on determining when price aligns with patient benefits. Less debated is whether insurance coverage provides patients with fair access to a drug with a fair, value-based, price. But how do we define fair access?  This paper from ICER and OHE authors develops a fair access framework, proposing Ethical Goals for Access and Fair Design Criteria for cost sharing and prior authorization protocols.
 
The cost of drugs in the US has become one of the largest components of health spending, and is projected to continue to increase relative to other spending areas. State governments have responded with a variety of potential remedies. Federal level policymakers have advanced proposals, including elimination of the drug rebate system, direct Medicare negotiation, and international reference pricing. 
 
In the commercial insurance market, employers and other plan sponsors have sought to address cost pressures with benefit designs including steep out-of-pocket patient cost-sharing and increased deductibles, and intensified application of prior authorization protocols, step therapy, and preferential formulary status as leverage to obtain lower prices and manage drug utilization.
 
Much of the focus in this debate has been on drug prices. ICER has contributed substantially to thinking in this area and strongly influenced policymakers’ views of how to determine when a price fairly aligns with patient benefits. But a question far less examined is how to determine whether insurance coverage is providing fair access to a drug. A drug with a fair, value-based price should be available to patients on a fair basis. How do we define fair access? 
 
This paper informs development of a fair access framework. A literature review and stakeholder interviews were conducted.  Representatives from patient organizations and clinical societies joined ICER’s Policy Leadership Forum – senior policy leaders from 25 payers and life science companies – in December 2019 to discuss a preliminary draft of this paper. This final paper takes account of those discussions. 
 
It proposes Ethical Goals for Access and a corresponding set of Fair Design Criteria for cost sharing and prior authorization protocols in five areas:
 
  • Cost-sharing provisions and tier placement as part of the drug benefit design
  • Timing of development of prior authorization protocols following FDA approval
  • Clinical eligibility criteria 
  • Step therapy and coverage requirements to switch medications
  • Restrictions on prescriber qualifications

Clinical need is the key driver for decision making, but fair design criteria should also depend on whether or not drug prices reflect clinical and economic value. If they do, then plans should minimise non-clinical obstacles to access. Key recommendations include:

Cost Sharing: (1) Patient cost sharing should be based on the net price to the plan sponsor, not the unnegotiated list price. (2) At least one drug in every class should be covered at the lowest relevant cost-sharing level unless all drugs are priced higher than an established fair value threshold. (3) If all drugs in a class are priced so that there is not a single drug that represents a fair value as determined through value assessment, it is reasonable for payers to have all drugs on a higher cost-sharing level.

Clinical Eligibility Criteria: (1) Clinical eligibility criteria should complement the FDA label language, for example on standards for diagnosis. They should not go beyond reasonable use of clinical trial inclusion/exclusion criteria to disadvantage patients with unrelated underlying disabilities and should consider evidence limitations due to systemic under-representation of minority populations in trials. (2) For reasonably priced drugs, clinical eligibility criteria should not deviate from the FDA label in a manner that would narrow coverage. (3) For drugs deemed to be priced unreasonably, criteria may narrow coverage to the eligibility criteria from the pivotal trials if implemented with reasonable flexibility and supported by robust appeals procedures.

Economic step therapy:  Payers should explicitly affirm or present evidence that (1) use of the first-step therapy reduces overall health care spending, not just drug spending; (2) the first-step therapy is clinically appropriate for all or nearly all patients and does not pose a greater risk of any significant side effect or harm; patients will have a reasonable chance to meet their clinical goals with first-step therapy; (3) failure of the first-step drug and the resulting delay in beginning the second-step agent will not lead to long-term harm for patients; and (4) patients are not required to retry a first-line drug with which they have previously had adverse side effects or an inadequate response at a reasonable dose and duration.

The complete list of fair access criteria is included in the paper.

Annual Assessment of Insurance Coverage

In conjunction with this paper, ICER is initiating a review of current coverage policies of US insurers and pharmacy benefit managers, with plans to publish the first annual report on concordance of policies with fair access criteria by the middle of 2021.

While the guiding principles of this forthcoming assessment will derive from those laid out in this paper, ICER plans to publish a specific review protocol in November, informed by ongoing discussions with a cross-stakeholder Working Group ICER has established, which includes individuals from patient organisations, research bodies, PBMs, health plans, and clinician associations.  

The paper is available here. It is also available on the ICER website here.

 

Related Research

Pearson SD, Segel C, Cole A, Henshall C, and Towse A. 2019. Policy perspectives on alternative models for pharmaceutical rebates: a report from the Institute for Clinical and Economic Review Policy Summit. J. Comp. Eff. Res. 10.2217/cer-2019-0094 C

Cole, A., Towse, A., Segel C.S., Henshall, C., Pearson, S.D., 2019. Value, Access, and Incentives for Innovation: Policy Perspectives on Alternative Models for Pharmaceutical Rebates. OHE Research Paper, London: Office of Health Economics.

Towse, et al. A Market-based International Reference Price Index: Solution or Contradiction? (Sep 13, 2019). Available at: https://www.ohe.org/news/market-based-international-reference-price-index-solution-or-contradiction

Hampson, G., Towse, A., Dreitlein, B., Henshall, C. and Pearson, S., 2018. Real World Evidence for Coverage Decisions: Opportunities and Challenges. OHE Research Paper, London: Office of Health Economics. RePEc.

Pearson, S., Dreitlein, B., Towse, A., Hampson, G. and Henshall, C., 2018. Understanding the Context, Selecting the Standards: A Framework to Guide the Optimal Development and Use of Real-World Evidence for Coverage and Formulary Decisions. OHE Research Paper, London: Office of Health Economics. RePEc.

Hampson, G., Towse, A., Pearson, S.D., Dreitlein, B. and Henshall, C., 2017. Gene therapy: evidence, value and affordability in the US health care system. Journal of Comparative Effectiveness Research 7(1). DOI. RePEc.

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