Biotechnology Healthcare - June 2008 - (Page 65) TRENDS: BENEFIT DESIGN Out-of-Pocket Expenses Can Soar With 4th-Tier Drugs Michael D. Dalzell, Editor 4th-tier cost sharing 2006–2007 $71 $59 42% 36% 2006 2007 Biologic therapies adjudicated under the pharmacy benefit are often placed on a formulary’s fourth tier or on a specialty tier. In 2007, copayments for fourth-tier drugs rose, though co-insurance rates for these products dipped slightly, according to a recent employer survey by the Kaiser Family Foundation and the Health Research Educational Trust. At the Kaiser/HRET 2007 levels, a popular twice-weekly tumor necrosis factor (TNF)-α inhibitor whose weekly retail cost is $450, for example, would cost a patient $142 in copayments, while co-insurance would amount to $162 a week. Copayments Co-insurance Frequently, prescription-drug cost sharing does not count toward a member’s out-of-pocket spending cap. In our example above, a patient with co-insurance would be liable for an annual cost share of $8,424, on top of the patient’s health plan’s stated out-of-pocket maximum. Out-of-pocket expenditures are a well-documented barrier to access, creating an opportunity for discussion among employers about the best use of cost-sharing tools in the context of their goals for providing access to biologics. Distribution of out-of-pocket maximums, 2007 44% Among all types of benefit plans,* percentage of enrollees whose maximums are shown below: Family coverage 27% 15%† 10%† 7% <$1,000 *Includes †10% 24%† 15%† 22%‡ 12%† 24%† Single coverage $1,000– $1,999 $2,000– $2,999 $3,000– $3,999 $4,000– $4,999 $5,000– $5,999 $6,000 or more high-deductible health plans, which by federal law have an out-of-pocket maximum of $5,500 for individuals and $11,000 for families. of enrollees with family coverage have an out-of-pocket maximum of under $2,000. ‡22% of enrollees with single coverage have an out-of-pocket maximum of $3,000 or more. Prescription drugs often do not count toward limit HMO Percentage of workers for whom PPO prescription drug copayments or coinsurance do not count Point-of-service plan toward annual outof-pocket limits, by High-deductible health plan type of benefit plan Source: Kaiser/HRET Employer Health Benefits 2007 Annual Survey 61% 79% 60% 40% MAY/JUNE 2008 · BIOTECHNOLOGY HEALTHCARE 65
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