Patient Affordability: The Most Important Non-clinical Attribute In Choosing Between Treatment Options

By Katherine DiPaula, Associate Consultant at Kantar Health

Patient access and affordability to drugs and treatments continue to be key issues in healthcare, specifically in oncology. A number of factors that are contributing to the financial crisis many patients face include:

Assistance from drug manufacturers is essential to patients’ affordability to healthcare and will ensure that providers are not eliminating best treatment choices due to perceived financial hurdles.

Factors Increasing Patients’ Financial Need

The trend of rising premiums, deductibles and cost-sharing continues among commercial health insurance plans. According to a Kaiser/HRET survey, the amount that workers contribute to single-coverage premiums has increased 94% from 2004 to 2014, while workers’ contributions to family coverage have increased 81%. Additionally, the rising trend of coinsurance for specialty drugs in the pharmacy benefit can have a significant financial impact on a patient. According to Kantar Health’s 2014 Payer Survey, patient cost sharing for drugs on specialty all brand and specialty non-preferred commercial formulary tiers were more likely to be coinsurance than a copay (Figure 1). The mean coinsurance rate for specialty brands was 42%, compared with a $91 copay on the specialty brands on a single specialty tier formulary or $93 for preferred and $156 for non-preferred specialty brands. This represents a substantial difference in drug costs. 

Patient Affordability: The Most Important Non-clinical Attribute In Choosing Between Treatment Options (continued)

Our survey showed that 27% of the commercial lives managed by the surveyed payers do not have an annual maximum out-of-pocket (MOOP). More than half of respondents reported a combined annual MOOP for medical and pharmacy benefits mean of $3,902. Without a MOOP limit in place, patients may experience financial hardship, especially patients with cancer who generally have a higher need for financial assistance. It is important for manufacturers to realize that regardless of benefit design, the mean MOOP still presents significant affordability issues for patients.

While many people enrolled in the healthcare exchange plans through the ACA in 2014, challenges to affordability to healthcare remain. OOP costs are not necessarily alleviated once a patient becomes insured. As widely reported, there are differences in premiums, deductibles and cost-sharing that result in highly variable levels of coverage and cost across patients. A comparison of the OOP costs for the first month of treatment with Zytiga ($6,837 per month)* by three state marketplace silver plans varies greatly by state. A patient enrolled in Arizona’s Aetna Classic plan would pay $3,669, while a patient in California’s Anthem Blue Cross Silver plan would receive the same treatment for $1,567, and Texas’ Blue Advantage Silver HMO would incur a $150 copay (Figure 2).

*Zytiga price retrieved from HIS Global Insight Inc.

While these exchange enrollees have the benefit of having a cap on their OOP costs, states with high integrated (combined medical and pharmacy) deductibles or high cost sharing for oncology products place great financial stress on patients. State-by-state cost sensitivity analysis needs to be considered by manufacturers to forecast prescribing attrition and abandonment, and this information could be used to inform adjustments to financial assistance programs.

States that have not expanded Medicaid under the ACA have created large “coverage gaps.” Nearly two out of three, or 5 million uninsured Americans earning between 50% and 100% of the FPL who would otherwise qualify for coverage under Medicaid expansion live in states that will not or have not yet decided to broaden the program. Because the intent of the ACA was to cover these individuals under Medicaid (the provision was struck down by the Supreme Court in 2012), subsidies for the marketplace plans are available only for those with incomes between 100% and 400% of FPL. Thus, these individuals have no financial support for healthcare. Over half of these uninsured patients in the “coverage gap” live in four states: Texas, Florida, Georgia and North Carolina. Of these, only Florida is currently considering participation in Medicaid expansion. The Medicare gap population will likely rely on manufacturer, charitable foundation and other financial assistance programs.

Patient Affordability: The Most Important Non-clinical Attribute In Choosing Between Treatment Options (continued)

Affordability Affects Treatment Decisions

Oncologists have taken notice of their patients’ escalating financial burden. In a recent Kantar Health survey, more than half of oncologist and practice manager respondents noted an increase in patient concern about cost compared to a year ago. Further, more than a third of oncologists and practice managers said that patients raise cost concerns at their first appointment. These factors may have led to oncologists’ rating patient affordability as the most important non-clinical factor in treatment decisions. While oncologists refer patients who are unable to afford their treatment for financial support, they also alter their treatment choices. In some cases, patients choose to forgo treatment when it becomes unaffordable. A 2011 study in the American Journal of Managed Care2 found that one in four cancer patients who have an OOP cost greater than $500 per month on their initial claim for an oncolytic tend to abandon treatment. However, when OOP costs are less than $100 per month the abandonment rate falls to 6.7%. Manufacturers need to educate practice staff on affordability solutions for their drugs to make sure treatment choices are not being eliminated or abandoned due to financial hurdles.

Financial Assistance Program Design Analysis

Given the critical importance of financial assistance programs, Kantar Health asked practice managers to rate manufacturer programs. Level of financial assistance, easy eligibility requirements and the inclusion of both insured and uninsured patients were identified as the main attributes contributing to a positive financial assistance program experience. Also, drug manufacturers should not underestimate the importance of well-trained, courteous call center staff in ensuring a positive experience.

Not surprisingly, difficult eligibility criteria and inadequate funding are the main attributes contributing to a negative program experience. In light of the shift in coverage between medical benefit and pharmacy benefit, it is important for manufacturers to assess their current program offerings to ensure patients have access to support their needs regardless of benefit design.

Finally, manufacturers will need to monitor payer mix in light of coverage expansion under the ACA with the marketplace plans and the expansion of Medicaid. Commercially insured patients may receive copay assistance directly from the manufacturer, and uninsured patients may be eligible for manufacturer-designed patient assistance programs (PAP). While all patients are eligible for assistance from charitable foundations, foundations represent the only option for Medicare patients who may be “competing” for limited funds. Understanding the breakdown between these patient groups is important, as is understanding the copay levels for those with prescription drug copays or coinsurance. These factors can inform financial assistance strategies, program design and what charitable foundation contributions manufacturers need to make.

Bringing It All Together

Challenges and Manufacturer Considerations:

About the Contributor

Katherine DiPaula is an Associate Consultant, Commercial Planning at Kantar Health.

Kantar Health is a leading global healthcare advisory firm and trusted advisor to the world’s largest pharmaceutical, biotech, and medical device and diagnostic companies. It combines evidence-based research capabilities with deep scientific, therapeutic and clinical knowledge, commercial development know-how, and marketing expertise to help clients launch products and differentiate their brands in the marketplace.

Kantar Health’s oncology-related offers include Oncology Market Access US (OMA US), which provides strategic and tactical insights into the evolving oncology landscape. Combining Kantar Health’s commercial and clinical expertise in oncology, OMA US provides cutting-edge information and analysis on critical reimbursement, coverage and competitive issues in the U.S. oncology marketplace.

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