You may have recently read about step therapy and some assertions that it can be a barrier to patient care.
I would like to provide an additional perspective and information to what step therapy actually is and how it’s critical in helping to maintain affordable access to appropriate care and medications.
It’s important to understand the cost of prescription medications, and specifically a category known as specialty prescription drugs, many of which are the focus of step therapy. Specialty prescription drugs are used to treat complex diseases that are usually chronic, but can also be acute. They are most commonly prescribed by specialists and are generally very expensive.
According to a September 2017 report from the Association of American Retired Persons Public Policy Institute, in the 10-year period from 2005 to 2015, the average retail price for 29 widely used specialty drugs increased over 177 percent, compared with a 19.4 percent increase in general inflation during that same period. That means that specialty drug prices increased more than nine times faster than inflation during that time. In 2015, the average annual cost for specialty drugs was 100 times higher than the average annual cost for generic prescription drugs.
The report cites specific medications. For example, the drug Enbrel is commonly used in rheumatology. In 2005, the retail price for a year’s supply of Enbrel was $16,641. In 2015, it was $45,270. That is an increase of $28,629.
It is also important to understand the approach that pharmaceutical manufacturers take to promote their products. One major strategy involves the payments that physicians may receive for promotional speaking, consulting or other purposes. A 2016 report by National Public Radio, citing a ProPublica analysis, indicates that nationally about three in four physicians across five common medical specialties received at least one payment from a company in 2014. The report also suggests that physicians receiving payments have a tendency to prescribe more branded medications than their counterparts who receive less money or no payment at all. Branded medications, in general, are far more expensive than generic medications.
Step therapy is a process that health insurance companies use selectively to ensure that existing, highly effective, and more cost-efficient medications are tried first before approving coverage for new high-cost medications. For many of the conditions that require specialty medications, there is at least one, and sometimes several, U.S. Food and Drug Administration (FDA)-approved medication that has been used successfully for years, if not decades, to treat the condition. All step therapy does is to ask if those drugs have been tried and were successful, or not, in treating a condition. Our focus at Blue Cross and Blue Shield of New Mexico is to provide our members access to FDA-approved treatments for their condition in a judicious, evidence-based, timely and cost-effective way. Step therapy has been a key tool for health insurers to help control the massive increase in pharmaceutical costs over the past decade and limit the potential risks of prescription drugs. Attempts to limit its applicability will likely result in even larger cost increases for medications in the future, which could potentially jeopardize access to care for patients.
In my opinion, a call for legislation to require a clear and timely appeals process for step therapy is unnecessary. There are already a number of regulatory and legislative requirements in place for health insurers to provide transparent and expeditious appeals rights for all of our members.
All physicians, nurses and health care providers in the state work tirelessly to care for all New Mexicans. By maintaining step therapy processes, we are ensuring appropriate care for our patients and the community.