State Actions to Increase Patient Affordability of Prescription Drugs Carl Schmid

1. State Actions to Increase Patient Affordability of Prescription Drugs Carl Schmid The AIDS Institute Washington DC National Association of Insurance Commissioners November 16, 2018

2. Background • Higher & Greater Use of Deductibles • Fewer plans with separate Rx Deductible • Higher & Greater Use of Co-insurance • Fewer Plans Using Co-pays • High patient cost-sharing for Rx compared to other EHBs • More Rx placed on Specialty Tiers • Co-pay Accumulators Programs Implemented • Lead to Patient Rx Abandonment

3. Cost-Sharing and Rx Abandonment New Patient Abandonment by Patient Out-of-Pocket Cost (Commercial, Top Brands, 2017) New Patient Abandonment (% NBRxs) Patient Out-of-Pocket Cohort Note: Sample limited to new patient approvals across Top Brands which span over 25 traditional and specialty therapeutic areas Source: IQVIA Patient Affordability Part Two: Implications for Patient Behavior & Therapy Consumption. Available at: https://www.iqvia.com/locations/united-states/patient-affordability-part-two.

4. Benefit Design and Rx Abandonment Overall New Patient Abandonment by Cost-Sharing Design (Commercial, Top Brands, 2017) New Patient Abandonment (% NBRxs) Cost-Sharing Note: Sample limited to new patient approvals across Top Brands which span over 25 traditional and specialty therapeutic areas Source: IQVIA Patient Affordability Part Two: Implications for Patient Behavior & Therapy Consumption. Available at: https://www.iqvia.com/locations/united-states/patient-affordability-part-two.

5. Copay Cards and Rx Abandonment New Patient Abandonment by Year and Patient Coupon Use (Commercial, Top Brands) New Patient Abandonment (% NBRxs) Note: Sample limited to new patient approvals across Top Brands which span over 25 traditional and specialty therapeutic areas Source: IQVIA Patient Affordability Part Two: Implications for Patient Behavior & Therapy Consumption. Available at: https://www.iqvia.com/locations/united-states/patient-affordability-part-two.

6. ACA Nondiscrimination Requirements • EHB Benefit design or its implementation must not discriminate based on age, sex, expected length of life, disability, degree of medical dependency, quality of life, or other health conditions • Health insurer can not employ benefit design that discourages enrollment of individuals with significant health needs or discriminate based on present or predicted disability, expected length of life, degree of medical dependency, quality of life or other health conditions • Implementing regulations & guidance • State enforcement

7. What Are States Doing? • Enforcement Actions • Prohibiting Specialty Tiers • Capping co-pays • Limit out-of-pocket maximum • Required/Standardized Benefit Design

8. Florida HIV Rx Co-pay Limits • The AIDS Institute filed federal Discrimination Complaint against 4 insurers for placing all HIV Rx on highest tier & requiring Prior Authorization • Florida Insurance Commissioner investigate & respond based on state law specific to HIV discrimination • Require plans to abide by co-pay limits in benchmark plan • Some plans working around limit by not implementing it until deductible met • Only impacts HIV Rx, no other classes • Help establish federal guideline of not placing all drugs to treat a condition on highest tier

9. Prohibit Specialty Tiers • New York: Plans can not charge cost-sharing amounts higher than amount for non-preferred brands

10. Co-pay Caps • California: $250/Rx after deductible met; $500/Rx for Bronze plans • Delaware: $150/Rx after deductible • Louisiana: $150/Rx after deducible • Maryland: $150/Rx after deductible • Washington DC: $150/Rx after deductible ($300/Rx for 90 day supply)

11. Out-of-Pocket Limits • Maine: $3,500 Annual limit for Rx subject to co-insurance • Vermont: Annual limit for Rx can not be greater than minimum annual deductible for high deductible health plans per Internal Revenue Code ($1,350/individual; $2,700/family)

12. Benefit Design Requirements • California: Standardized plans differing by medal level: • Co-pay caps • Nominal separate Rx deductible (some metal levels exempt) • Co-insurance level capped for Specialty Tier Rx (between 10% and 20%) • Requires plans to place at least one Rx on Tiers 1-3 when multiple Rx are available for chronic conditions

13. Benefit Design Requirements • Montana: • Requires insurers to have at least one plan that includes co-pays for all tier levels • Cost-sharing must be reasonably graduated and proportional • Review Rx tier placement for discrimination • Colorado: • Not more than 50% of Rx to treat a certain condition can be on highest tier • At least 25% of the plans in each metal level must use co-pays & copays not subject to deductible • Co-pays limited to no more than 1/12 plan’s out of pocket limit for individuals

14. Impact of CO & MT Plan Design • Milliman Report: • Insurers used range of plan design adjustments to offset the Rx requirements: higher medical deductible, out of pocket maximums and cost-sharing, but differences were “modest & diffused” • Bottom line: “no discernable benefit design changes” • Number of Silver & Bronze plans decreased and premiums increased in both states over 3 years “in a manner comparable to the changes observed nationwide” “Impact of Prescription Drug Copay Regulatory Action on ACA Exchange Plans in Colorado and Montana”, Milliman Inc. July 2017.

15. Federal Proposals • American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs • “Capping Prescription Costs Act of 2018” (Warren, S 3194) • limit copayment amounts for Rx to $250/month for individuals; $500 for families • “Patients’ Access to Treatments Act of 2017’’ (McKinley, HR 2999) • Specialty drug cost sharing can not be greater than non-preferred tier

16. Conclusion • States are required to enforce patient protections, including nondiscrimination provisions • States have tools to review plans for discrimination and limit patient Rx cost-sharing • Some states have passed laws, while others have used regulations and guidance • Federal requirements exist, more may follow • More action is needed so that patients can access Rx • Thank you to patient advocates and policy makers across the country

17. Thank you! Carl Schmid Deputy Executive Director The AIDS Institute cschmid@theaidsinstitute.org Twitter @AIDSadvocacy Facebook @TheAIDSInstitute