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States step in to regulate drug copays

Insurers may need to find new ways to control costs for specialty drugs, as more states add limits to cost-sharing and utilization continues to grow.

At least five states have enacted laws limiting copays and two — New York and Alaska — have expressly prohibited the use of tiered formularies for specialty medications. Another 11 states, including California, Illinois and Virginia, have legislation up for consideration that would limit copays.

That state governments are stepping in to place limits on cost-sharing for specialty drugs suggests that public angst over rising out-of-pocket costs is reaching an inflection point—monthly drug costs that were once affordable for patients with conditions like arthritis or multiple sclerosis are becoming harder to cover as part of a family budget. Consumers are seeking relief and lawmakers are turning to insurers to limit what they can charge their members.

“The trend towards increased reliance on specialty pharmaceuticals would not raise such an important concern if specialty drugs did not represent the most expensive segment of pharmaceuticals not only for insurers, but also for consumers through cost-sharing measures,” as Chad Brooker, a health policy analyst at Connecticut’s insurance exchange, Access Health, wrote in Health Law and Policy Brief last year.

By some estimates, specialty medications account for only one percent of all U.S. prescriptions but 25 percent of national drug spending. Not only is that set to grow to as much as 45 percent by 2017, but the assumption that prices for existing will fall over time may not always be the norm.

Teva Pharmaceuticals’ Copaxone, an injection-based multiple sclerosis drug, debuted in 1996 at a price of about $1,000 per month, by 2008 was priced at $2,000 per month, and nowadays is hovering around $5,000. To continue reading click here.

By:  Anthony Brino

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Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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