Exploring the Complex, Ever-Evolving Landscape of Specialty Drug Coverage

The landscape of specialty drug coverage is complex and ever-evolving, with health care providers and payers facing a range of challenges. At the AMCP Nexus 2024 meeting, industry experts identified the complexities of utilization management practices, highlighting the significant variations in coverage policies across different health plans.

This discussion offers valuable insights into the trends shaping the specialty drug market. | Image credit: Phushutter - stock.adobe.com

This discussion offers valuable insights into the trends shaping the specialty drug market, the impact on patient access, and the importance of quality-based decision-making in this critical area of health care.

Emerging Trends Across Commercial Health Plans

Utilization management is widely used by commercial health plans, with 90% of patients facing some form of restrictions or requirements. These can include step therapy, prior authorization, and other criteria beyond FDA-approved indications.

While specialty drug coverage policies only account for 7% of the market, they are crucial for conditions like immune diseases and cancer. By 2019, 37% of decisions had no utilization management, down from 69% in 2017, while 39% had increased requirements. Orphan drugs saw a 46% utilization management rate, and oncology drugs saw a rise from 2% to 36%.

In his research, James D. Chambers, PhD, professor, Center for the Evaluation of Value and Risk in Health, Institute for Clinical Research and Health Policy Studies, Tufts Medical Center, tracked over 14,000 product decision, noting significant variations between health plans. Some plans impose restrictions in over 75% of their policies, while others do so in less than 50% of cases, suggesting that patients with different insurance coverage may have vastly different access to specialty medications.

Problem With Prior Authorization

Prior authorization plays a crucial role in managing the variation in treatment decisions across health care providers. Prior authorization is not just about restricting access, but about ensuring quality-based criteria decisions that align with the available evidence.

However, for specialty drugs, limited clinical information or a small patient population can pose a challenge. Additionally, relying on trial design for identification of the appropriate patient can lead to using criteria that is not relevant or standard to clinical practices, narrowing of eligible patient populations based on inclusion criteria, lack of standard definitions of indications such as “mild,” “moderate,” etc, and lack of a clear definition of treatment success.

“We have this differentiation between a prior authorization utilization management program actually applying appropriate access to care and driving cost savings vs the ability to show that,” said Dana McCormick, RPh, senior director, Optum.

Legislative and Regulatory Actions

The discussion around specialty drug coverage has also been shaped by various legislative and regulatory actions. One key area is the use of step therapy, where health plans require patients to try and fail on less expensive treatments before accessing more costly specialty drugs. This practice has faced scrutiny, with some states passing laws to limit the use of step therapy and establish clear exceptions. Additionally, the concept of "gold carding" has emerged, where high-performing providers are exempted from prior authorization requirements for certain drugs. These regulatory efforts aim to balance cost management with ensuring appropriate patient access to necessary specialty medications.

Key themes in guiding principles for utilization management reform that have been discussed across various stakeholders—such as AMCP, American Society of Clinical Oncology, and American Medical Association consensus statement—have included clinical criteria for protocol development, transparency of protocol, continuity of care, opportunity to appeal, and flexibility for provider input.

In a study published in The American Journal of Managed Care^®, 36% of physicians reported changing therapy due to a delay in response or communication from the plan in the approval or denial of a request, 26% of physicians reported modifying the request to get around prior authorization or meet the requirements, and 75% of physicians reported avoiding new medications because of these concerns.²

“Having some kind of requirement or step to another therapy and prove and show that it was not effective was the primary driver of changing these behaviors,” said McCormick. “Things in other utilization management approaches like requiring diagnosis or requiring different lab values or things like that relating to the disease were not as impacted as changing their behavior.”

Value-Based Contracts and Outcome-Based Contracts

Value-based contracts and outcome-based contracts between payers and manufacturers are 2 innovative approaches to managing specialty drug coverage beyond traditional prior authorization and utilization management programs. These types of contracts aim to better align spending with desired clinical outcomes by tying payment or reimbursement to the achievement of pre-specified goals.

Examples include process outcomes like impact on hemoglobin A_1C levels, patient-centered outcomes like reduced risk of heart attacks, and financial outcomes like lowering cancer medication costs if study endpoints are not met. The critical elements for success include agreeing on simple, meaningful outcome measures, establishing appropriate risk-sharing between the manufacturer and payer, and ensuring the target population size is sufficient to justify the effort.

“All these models sound good, but then you come over to the key requirements to action that need to happen, and expectation realistic of the payer is that the innovator should be paying for the evidence generation and foster administering these performance-based agreements,” said Diana Brixner, RPh, PhD, FAMCP, professor, University of Utah. “Many innovators may not agree with that.”

Other barriers exist, such as challenges in finding the right outcome measures and addressing off-label use.

“I look forward to seeing how we can better manage the increasing costs, especially pharmaceuticals, Brixner continued. “We really do need to look beyond PAs [prior authorizations] and beyond utilization management. We need to understand the frustration of those approaches of providers and patients and see if we can come up with a different way. [Outcome-based contracts] may not be the answer [but] is something to consider as we go over and get better access to more monopoly data that can drive the success.”

References

1. Chambers J, Brixner D, McCormick D. Current patterns, future shifts, and best practices in US specialty drug coverage. Presented at: AMCP Nexus 2024; October 14-17, 2024; Las Vegas, NV.

2. Salzbrenner S, Lydiatt M, Helding B, et al. Influence of prior authorization requirements on provider clinical decision-making. Am J Manag Care. 2023;29(7):331-337. https://doi.org/10.37765/ajmc.2023.89394.