Specialty Tier Placement Puts Patients at Risk

Specialty Tier Placement Puts Patients at Risk

03.22.12 | By Greg Lopes

Unless you have a keen interest in health policy - or you've had a personal experience in recent years - you probably haven't spent much time thinking about specialty tiers in health plan formularies. While not exactly dinner conversation in most circles, it's important for people to realize how a specialty tier can put patients' health at risk. Why? It restricts access to needed treatments.

As you likely know, a formulary is a list of prescription medicines covered by a particular drug benefit plan. The main function of formularies is to specify which medicines are approved to be prescribed and how much the plan and the patient will each pay.

Medicines placed in the specialty tier of plan formularies, or Tier 4 as it's sometimes referred to, are treated differently than any other health care service in Medicare or the private market. These medicines are simply lumped together based on price, and patients are charged higher out-of-pocket-costs to obtain these medicines because of this categorization. In contrast, higher-than-average hospital stays or procedures don't get such special categorization.

The problems patients face in accessing medicines placed on the specialty tier has been raised in the past. I'm reminded of a New York Times editorial from a few years back that said. "There is little doubt that the so-called tiered formularies, in which co-payments rise along with the cost of the drugs, are a sensible approach for encouraging consumers to use the cheapest drug suitable for their condition. But the system seems to break down when it moves to Tier 4 drugs where co-payments can be huge and suitable alternatives don't exist."

The New York Times editorial followed a thought-provoking story by Gina Kolata on this issue.

Products placed in a specialty tier have often been the most innovative treatments in recent history - medicines that allow many patients a glimmer of hope, for the first time, in their long battle against some of our most severe diseases. For those people and their families, the value of these medicines is immeasurable.

And yet, the specialty tier heightens the risk of leaving patients without medicines or putting off taking them. And the result can be medically and financially devastating. Poor adherence can lead to increased hospitalizations and, in fact, more than one-third of medication-related hospitalizations are related to patients not taking their medicines as directed.

It also has implications for our healthcare system as a whole. Under-treatment of chronic diseases due to lack of adherence to prescribed medicines costs the U.S. economy hundreds of billions of dollars each year.

Conversely, better adherence can yield improved health outcomes and reduced spending on other healthcare services.

In my view, out-of-pocket costs associated with specialty tiers are risky to patients. It comes down to the simple fact that medicines cannot help if they are inaccessible to the patients who need them.

Follow Greg on Twitter @GregAtPhRMA

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