[Ip-health] Better Cost-Sharing Approaches Can Help Patients on Orphan Drugs

[Joana Ramos]

http://www.aishealth.com/Bnow/hbd091908.html

/Featured Story September 19, 2008/

Better Cost-Sharing Approaches Can Help Patients on Orphan Drugs

Reprinted from SPECIALTY PHARMACY NEWS, a monthly newsletter designed to
help health plans, PBMs, providers and employers manage costs more
aggressively and deliver biotechs and injectables more effectively.

By Angela Maas, Managing Editor, (amaas@aispub.com)

Barriers to access for orphan drugs can create cost-share challenges for
not just patients but also some industry stakeholders that are trying to
ease the cost pressure, says one industry expert. Maria Hardin, vice
president of patient services for the National Organization for Rare
Disorders, contends that changes to orphan-drug coverage in both
commercial and federal health plans, as well as cost-share support from
plans and specialty pharmacies, would ease the burden on these patients.

2008 marks the 25th anniversary of the Orphan Drug Act. Before the bill
was passed in 1983, only 10 drugs that would be considered orphan
therapies were approved. But following its passage, the FDA has approved
nearly 330 orphan drugs. Biologics were added to the Orphan Drug Act in
1985 as that industry was just starting to emerge.

Although the law provides incentives for companies that develop orphan
drugs, these manufacturers still must adhere to the same safety and
efficacy requirements as do other pharmaceutical manufacturers. Limited
funding for orphan drug research and development, as well as the fact
that many of these orphans are developed by small companies that have
only that therapy in their pipeline, mean that these drugs are often
very expensive =97 to the tune of $100,000, $200,000 and even upwards of
$300,000 per patient per year for ultra-orphan drugs.

Hardin, who will be speaking on providing patient assistance for
specialty drugs that treat rare diseases at the Institute for
International Research's upcoming Modernize Patient Assistance Programs
conference on Sept. 19 in Washington, DC, tells SPN that payers
essentially place barriers to accessing these drugs.

Part D Patients Can Quickly Drain Resources

Hardin says that Medicare Part D has been good because it addresses the
prescription needs of Medicare beneficiaries. But patients taking a drug
that costs between $1,500 and $3,000 per month will meet their true
out-of-pocket costs =97 and thus enter the "doughnut hole" coverage gap =97
within the first two months of the year, she says. "Many patients with
chronic illnesses face a real draining of resources within two months of
the year's beginning," she explains. The doughnut hole begins after
total medication expenses of $2,510 are reached for 2008. At that point,
the beneficiary is responsible for $3,216.25 out of pocket until
catastrophic coverage kicks in and Medicare begins paying again, which
happens when total medication expenses reach $5,726.25.

Part D also featured specialty tiers within drug formularies, which had
"really not been a part of the vernacular in the private-payer world,"
she says. "Just about every drug prescribed for rare, chronic
conditions=85is automatically placed in the specialty tier," which
contains Part D drugs that cost more than $600 per month. Forty-one of
47 Medicare stand-alone Prescription Drug Plans have a specialty tier,
and 21 PDPs require 33% coinsurance on that tier, Hardin says. And
infused drugs paid under Part B, which Medicare pays 80% of, can run
patients thousands of dollars a month, she explains.

With commercial plans, "part of the problem is that most insurance plans
do not have a database for rare diseases," she explains. "When a patient
is diagnosed and needs to go on therapy," the plan needs to investigate
that drug, Hardin says. Plans will put in place management tools such as
pre-existing illness clauses, specialty tiering and coinsurance =97 which
can run up to 50% of the drug's cost in some situations, she says =97 that
can oftentimes obstruct patient care. Patients are reaching their
lifetime maximum in insurance coverage earlier with these drugs as well,
she says.

"Up until 10 years ago, no one ever dreamed that if they had insurance,
they would need help" with paying their health insurance bills, contends
Hardin. The focus earlier, she says, was on the 47.5 million uninsured,
who have been helped by free drug programs. But as the number of
underinsured people, who could not cover the out-of-pocket costs for
their therapy, has continued to rise, "certain charitable entities took
a look at providing disease-specific funds," she notes. More than 70
diseases and conditions are covered through such funding, she says.

"We have to respond to societal issues," maintains Hardin, who adds that
many of these orphan drugs are "life-sustaining and lifesaving. This is
a serious matter that we have to address." Many pharma manufacturers and
foundations have been willing to try to help the situation, she says.
But while specialty pharmacies and health plans are benefiting from
these paying customers, they are not doing as much as they could be to
help these patients, she asserts. "It's time for these entities to come
to the plate," perhaps by supporting the various disease funds that make
it possible for patients to meet their cost share, Hardin says.

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Joana Ramos, MSW
Cancer Resources & Advocacy
Seattle WA USA
+1-206-229-2420
http://ramoslink.info/
www.bmtbasics.org