Prescription Drug Specialty-Tiers
Traditionally, commercial health insurers have charged fixed co-pays for different tiers of medications: generics (Tier I), name brands (Tier II), and off formulary brand medications (Tier III). As an example, the co-pays might be set at $10/$20/$50 for the three tiers. Some commercial health insurance policies are now moving vital medications (mostly biologics) into “specialty tiers” that utilize high patient cost-sharing methods. This “fourth tier (IV)” is now commonly requiring patients to pay a percentage of the actual cost of these drugs – from 25% to 33% or more, often costing hundreds of dollars, even thousands of dollars, per month for a single medication – rather than a fixed, flat dollar co-payment. These practices are placing medically necessary treatments out of reach of average Americans.
With appropriate treatment in patients with chronic, life-threatening and disabling conditions including multiple sclerosis, rheumatoid arthritis, psoriatic arthritis, lupus, some forms of cancer, and primary immunodeficiency diseases, biologic drugs can prevent patients from becoming disabled, seriously ill, or dying. They can allow patients to maintain daily function, remain in the workforce and contribute to the tax base, and raise their families. Biologics are FDA approved and have no inexpensive generic equivalents. Individuals unable to afford specialty tier pricing are likely to go without crucial medications, resulting in disability and other future health complications that can lead to increased health care costs that affect our entire health care system.
Yearly costs for affected medications can range from $12,000 to $48,000 or more. Cost-sharing for prescription medications should not be so large as to inappropriately restrict or interfere with medically necessary use of medications.
PSI is a national leader on this crucial patient access issue and is working in multiple states to address it through legislation!
Virginia Specialty Tiers legislation
Bill Information - H.B. 308
Bill Information - S.B. 201