Obamacare plans are controlling costs by limiting patients’ access to more expensive — and possibly more effective — drugs, according to revelations made at a Capitol Hill hearing Thursday.
Plans on the Affordable Care Act (ACA) exchanges are “limiting the formulary” of drugs provided to patients to exclude expensive treatments for diseases including rheumatoid arthritis, according to House Energy and Commerce subcommittee testimony Thursday from William F. Harvey, government affairs committee chairman at the American College of Rheumatology.
“Similar to ongoing changes to provider networks, another rampant practice that has been in existence for some time, but has now increased within exchange plans, is changes in formulary coverage of medications,” Harvey stated in prepared testimony.
Harvey explained that some medications derived from living organisms, called “biologics,” are essential to combating some diseases including Hepatitis C and have no “viable alternatives” among inexpensive medications. Harvey explained that biologics used for rheumatoid arthritis run between $15,000 and $30,000 annually in cost.
“That cost, while arguably justified by the manufacturer, invariably gets passed on to patients and insurers covering their care,” Harvey testified.
“A ubiquitous tool employed by all payers, except Medicare, is to negotiate prices for drugs with the manufacturer in exchange for preferred status on that insurer’s formulary [a ‘formulary’ is the list of medicines a manufacturer offers]. The insurer then creates financial disincentives, ranging from non-coverage to excessive co-insurance to restrict use of the more expensive, non-formulary alternatives.”
Obamacare exchanges are “limiting the formulary” to prevent patients from getting their hands on expensive biologics, and cheaper drugs must fail first before Obamacare customers are even allowed to get access to higher-quality treatments, he said.
“Step therapy and ‘must fail first’ policies are the norm amongst payers across the spectrum both within and outside of ACA exchanges,” Harvey said. “Even when an individual fails the formulary treatment, barriers to accessing non-formulary alternatives are difficult to overcome. As insurers within various tiers of the exchange plans seek to control costs, limiting the formulary remains and effective and often used tool.”
Harvey called for Congress to moderately restrict Obamacare plans’ ability to limit the formulary.
As The Daily Caller reported, the Obama administration also instituted an “academic detailing” program that sends government advisers into doctors’ offices to recommend drugs on the market that can be sold on the Obamacare exchanges, creating concern that cheaper drugs are being recommended to control costs.