Drug-makers launch counter-attack on insurers

Drug-makers on Wednesday slammed the health insurance industry for over-charging patients who suffer from cancer and other diseases for drugs.

The Pharmaceutical Research and Manufacturers of America and several patient advocacy groups say tiered drug plans for chronic diseases offered by insurance companies are violating ObamaCare’s non-discrimination provisions and the government isn’t doing enough to stop it.


PhRMA’s comments are the latest jab in its fight with America’s Health Insurance Plans, the main lobbying group representing insurers.

AHIP has accused drug-makers of pushing up prices of specialty drugs, costs of which insurers in turn have passed on to patients through higher cost-sharing plans. 

PhRMA and other groups on Wednesday touted a report by Avalere Health that shows people with chronic diseases are required to pay higher out-of-pocket costs for their medication. 

Avalere analyzed 19 classes of drugs for chronic diseases in 123 silver plans, the most popular health insurance plan on federal and state exchanges created by the Affordable Care Act. 

Their study found that for major drugs to treat the HIV virus and cancer, a fifth of all drugs required patients to pay for 40 percent or more for the treatment.

The study also found that on 60 percent of plans, patients had to pay a high portion of the costs for certain multiple sclerosis and cancer drugs. 

Drugmakers and advocacy groups say insurers are charging co-pays that are too high for drugs to treat chronic diseases. They argue this violates ObamaCare’s rules prohibiting discrimination against people with pre-existing conditions, because it makes the coverage unaffordable. 

The say state and federal regulators should be paying more attention to the insurance company policies for designing “formularies,” lists of drugs that fall under certain categories for the purpose of determining patient co-pays.

“When plans are not prohibited from designing formularies in this manner, high out-of-pocket costs are concentrated among a subset of patients, potentially undermining the very purpose of insurance,” said PhRMA. “Additional oversight and stronger standards for formulary design would help prevent the practices described in this report.” 

PhRMA CEO John Castellani said the Department of Health and Human Services should release guidance immediately on how much insurance plans can charge for specialty drugs.

As insurers begin to publish their plans ahead of the 2015 enrollment period, Castellani said it was important to have guidance that could limit patient co-insurance.

The AIDS institute, which attended Wednesday’s event at the National Press Club, has filed a complaint against some health insurers in Florida for putting too much burden on HIV/AIDS patients to pay for drugs. They say some patients must pay 40 percent or more of drugs that result in out-of-pocket costs that average $1,000 per month. 

PhRMA said it supports the move but does not intend to join the complaint.

Other groups present at the release including Health HIV, Colon Cancer Alliance and Immune Deficiency Foundation said they have joined or are joining the complaint. 

The American Autoimmune Related Diseases Association said it would join any potential appeal if the complaint failed to illicit the right response in the first round.