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I asked Robert Zirkelbach, a senior media relations type at America's Health Insurance Plans, to comment on how drugs are assigned to Tier Four. This is what he sent me:
“Health plans work with employers to balance providing access to as many different drugs as possible while keeping health care coverage affordable for consumers. Prescription drug tiering is one strategy health plans have implemented that has been proven to lower the rate of increase in drug spending in America. Specialty tiers are reserved for the highest-cost drugs in the market. These drugs are typically monopoly biopharmaceutical drugs with no generic substitutions currently available that tend to have the most profit potential for drug companies. We need a national conversation about whether drugs that cost ten or a hundred times as much as current treatment options are producing better outcomes. Encouraging generic versions of these drugs will go far toward the goal of keeping coverage affordable and drugs accessible for millions.Moreover, we need a national system in this country that compares new drugs with the treatment options currently available in the marketplace. Consumers have a right to know what works and what works best - especially in a time where they are trying to stretch their limited health care dollars farther.”To parse this out a little bit, Zirkelbach is making a series of points. The first is that prescription drug tiering actually does lower total costs. This is true. And it's worth remembering that most everything in health care requires trade-offs. If we're going to cover all medications, no matter how costly, than health insurance will be even less affordable, and even more folks will be uninsured. This is particularly true if we're going to use cost as our only variable and not venture forward into assessing value so that we can make more intelligent spending decisions.Next, Zirkelbach implies that by placing drugs on tier four, insurers encourage generics. My understanding, though, is that most of these drugs are under patent, and the generic will be developed when they come out of patent. Making the original drug more expensive doesn't seem particularly germane to the patent issues keeping the generics out of the market.The final point is that we don't currently have good drug effectiveness information that could help insurers make value-based decisions. As such, they make cost-based decisions. The insurers are behind a national body that would produce this research, as well they should be. Zirkelbach is suggesting that the tiering system, with its somewhat arbitrary nature, is all they can do in the meantime.Update: To complicate the picture a bit, the reason Zirkelbach focuses on biologics is that they actually are protected from generic competition right now. Waxman has legislation that would rectify this. Zirkelbach is saying, essentially, that if we passed such legislation and developed lower cost alternatives, insurers would be able to offer them more cheaply.
