Following is an excerpt from a GAO report examining the variation in costs to enrollees in the FEHB program for specialty drugs.
Recent increases in prescription drug costs have been fueled in part by the high and rising cost of specialty prescription drugs. Specialty prescription drugs are typically used to treat chronic or life-threatening conditions, such as multiple sclerosis and cancer, for which few other treatment options exist. The drugs typically have few competitors or generic alternatives and may require frequent dosage adjustment, special storage, patient education, or special methods of administration, such as by injection. Costs for specialty prescription drugs are usually high, typically ranging from $1,200 to $40,000 for a 30-day supply. Health plans–including those participating in the Federal Employees Health Benefits Program (FEHBP), which covers nearly 8 million federal employees, dependents, and retirees– provide coverage for many specialty drugs. Enrollees may be required to pay a portion of specialty drug costs through a copayment–a flat dollar amount–or coinsurance–a percentage share of the drug’s actual costs. To manage the high and rising costs of these drugs, some health plans have begun to require enrollees to contribute a greater share of their costs, such as by increasing the use of coinsurance. You asked us to examine the costs that FEHBP enrollees may incur for specialty prescription drugs. In this report we describe cost-sharing requirements and limits for specialty drugs covered by FEHBP plans.
To obtain this information, we reviewed literature and consulted experts3 to identify commonly used specialty prescription drugs in key therapeutic classes, without lower cost alternatives. We identified 18 such drugs–3 drugs in each of 6 therapeutic classes. We analyzed information from 184 FEHBP plans regarding the cost sharing for a 30-day supply of these drugs through the plans’ prescription drug benefit for the 2009 benefit year. In particular, plans reported coinsurance or copayments for the specialty drugs; other out-ofpocket costs, such as deductibles; and limits on cost sharing, such as annual out-of-pocket maximums and per prescription dollar maximums, which limit an enrollee’s cost for each prescription. To determine the number of enrollees in each plan, we used 2008 FEHBP enrollment data obtained from the Office of Personnel Management (OPM), the agency that administers FEHBP. Enrollment in these plans totaled nearly 7.8 million or 99.5 percent of total FEHBP enrollment in 2008. To estimate the potential annual cost to enrollees for certain specialty drugs reviewed based on various cost-sharing arrangements, we used drug cost data obtained from the Web site of a large national FEHBP plan.
We relied on the data as reported by the plans and did not independently verify the data.
However, we did review all plan responses for reasonableness and consistency, and we clarified apparent irregularities by reviewing plan benefit brochures and contacting plan representatives. Based on these activities, we determined the data were sufficiently reliable for the purpose of our report. We conducted our work from November 2008 to April 2009 in accordance with all sections of GAO’s Quality Assurance Framework that are relevant to our objectives. The framework requires that we plan and perform the engagement to obtain sufficient and appropriate evidence to meet our stated objectives and to discuss any limitations in our work. We believe that the information and data obtained, and the analysis conducted, provide a reasonable basis for any findings and conclusions.
In summary, enrollees in FEHBP plans are subject to varying cost-sharing requirements for the 18 specialty drugs. More than 6.6 million of the nearly 7.8 million enrollees in the plans we reviewed (86 percent) are generally subject to copayments that limit enrollee costs to about $55 on average for a 30-day supply of the drugs. Nearly 900,000 enrollees (11 percent) are subject to coinsurance for more than 1 of the 18 specialty drugs, which requires the enrollees to pay on average nearly 31 percent of the cost of the drugs. About 700,000 of the enrollees subject to coinsurance are in plans requiring it for all 18 of the drugs. Enrollees’ coinsurance costs for specialty drugs are typically limited by per prescription dollar maximums or annual out-of-pocket limits. Depending on the plan, these varying requirements can result in a wide range of costs for enrollees for the same drug. For example, we estimate that an enrollee taking the multiple sclerosis drug Betaseron for a year could pay $420 if subject to a copayment, $2,400 if subject to a coinsurance with a per prescription dollar maximum, or $6,000 if subject to a coinsurance with an annual out-of-pocket maximum.
Cost Sharing for Selected Specialty Drugs More than 6.6 million of the nearly 7.8 million FEHBP enrollees in plans we reviewed (86 percent) are generally subject to copayments that limit enrollee costs to about $55 on average for a 30-day supply of the drugs. About 11 percent of the enrollees are in plans that reported requiring coinsurance for more than one drug. Reported coinsurance ranged from 5 to 50 percent and averaged nearly 31 percent of the drug cost. Just 3 percent of the enrollees are in plans that reported covering most of the specialty drugs only under the medical benefit of the plan, as opposed to the prescription drug benefit.
Close to 900,000 enrollees are in 50 plans with coinsurance for more than 1 specialty drug we reviewed, and about 78 percent of those are in plans with coinsurance for all 18 drugs. Of the 18 specialty drugs we reviewed, the 3 growth hormone deficiency drugs, the 3 hepatitis C drugs, and 2 rheumatoid arthritis drugs–Enbrel and Humira–were subject to coinsurance most often. The rheumatoid arthritis drug, Remicade, and the cancer drug, Lupron Depot, were least often subject to coinsurance.
Cost-sharing Limits for Selected Specialty Drugs Subject to Coinsurance Though coinsurance requires enrollees to pay a share of the high cost of selected specialty drugs, most plans limit these out-of-pocket costs. For example, of the nearly 900,000 enrollees subject to coinsurance for more than one specialty drug we reviewed, 63 percent are in plans that limit enrollees’ costs with a per prescription dollar maximum for a 30-day supply of a drug. Some plans with per prescription dollar maximums also have an annual outof- pocket maximum that applies to the specialty drugs reviewed, which would provide further limits to enrollees’ out-of-pocket spending. Another 35 percent of enrollees are in plans that do not use per prescription dollar maximums but limit drug costs with annual outof- pocket maximums. Per prescription dollar maximums reported by plans ranged from $50 to $400, averaging $143 for a 30-day supply. Annual out-of-pocket maximums ranged from $1,500 to $7,000, or $4,264 on average. The remaining 2 percent of enrollees subject to a coinsurance for selected specialty drugs do not have any limits to their cost sharing for drugs covered under their plans’ prescription drug benefit.