Specialty drugs are on the rise in the U.S. It's an excellent indicator of the progress medicine is making, with more cancer treatments and even cures for Hepatitis-C, but it's also a huge cost for insurance companies and individuals to take on. Specialty drugs comprise only 1% of all prescriptions, but they also represent 32% of all Rx drug spending.
|Your 2016 Drug Plan: Specialty Drugs versus Generic Drugs|
In order to control these costs into 2017, with the intention of lowering our premium rate increases in 2017, PHBP has implemented a $500.00 deductible on Tier 4 (Specialty) drugs in 2016. How does this impact you?
The new plan feature may not impact you at all - Tier 4, or specialty drugs, are very expensive, include drugs that are recently approved by the FDA, and usually cost more than other drugs used to treat the same condition.
What are the factors that make one drug a Tier 1, for example, and another drug used to treat the same condition, a Tier 4. Factors that determine what tier a drug is placed in would be cost of the drug, cost of the drug compared to other drugs used for the same treatment, and availability of over-the-counter options.
- Tier 1 drugs have the lowest cost share - they are typically generics, and offer the greatest value compared to others that treat the same conditions.
- Tier 2 drugs have a medium cost share - they may be preferred drugs, based on their effectiveness and value. Some are newer, more expensive generic drugs. Tier 2 drugs have a higher cost share than Tier 1.
- Tier 3 drugs have a higher cost share - they may cost more than others used to treat the same condition. Tier 3 may also include drugs that were recently approved by the FDA. Tier 3 drugs have a higher cost share than Tier 2.
- Tier 4 specialty drugs have the highest cost share - they may cost more than others used to treat the same condition. Tier 4 may also include drugs that were recently approved by the FDA. Specialty drugs are used to treat complex, chronic conditions and may need special handling.
Typically, when you visit your doctor and your doctor prescribes you a medication, a Tier 1/Tier 2 drug is initially prescribed. If the drug is ineffective, or if there is another reason why the drug is not preferred, a Tier 3 drug may be prescribed. Eventually, if all drugs are not effective or unsuitable for an acceptable reason, a Tier 4 drug may be prescribed. Drugs found in every tier may need prior authorization, but most often, the drugs found in Tier 3 and Tier 4 will require prior authorization. Prior authorization may be called for due to:
- Risk of Side effects,
- Risk of harmful effects when taken with other drugs,
- Potential for incorrect use or abuse,
- Better options that may cost you less and may work better,
- Rules for use with certain health conditions.
for more information about prior authorization procedures, and a list of medicines that need prior authorization.
In summary, specialty drugs should only be used when all drugs on the lower tiers have been prescribed, and have either been ineffective, or have produced negative side effects. In many cases, a brand or generic found on a lower drug tier will produce favorable results prior to the need for a Tier 3 or Tier 4 drug. If the specialty drug is found to be required through the Anthem prior authorization process, the drug will be made available to you and the Plan will pay its share of the cost after the $500.00 deductible has been met. A pharmaceutical benefit/cost summary is attached here