HIRC Research Alert: Health Plans Expected to Increase Adoption of Percent Copays to Manage Specialty Medications

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Health Industries Research Companies (HIRC) Specialty Pharmaceuticals Service is an ongoing market research study that provides detailed analyses on health plans’ coverage and management of specialty pharmaceuticals.

Key trends in health plans' management of specialty medications include adoption of percent copays in conjunction with out-of-pocket limits.

Health Industries Research Companies (HIRC) Specialty Pharmaceuticals Service is an ongoing market research study that provides detailed analyses on health plans’ coverage and management of specialty pharmaceuticals.

Adoption of percent copays for specialty medications is forecast to grow in 2011.
HIRC asked health plan executives to assess the percentage of their commercial lives covered by three types of copays — fixed, percent and no copay —for specific medications in eight specialty drug classes. While the majority of patients remain covered by fixed copays (for medications administered in the pharmacy benefit), HIRC research finds that the usage of percent copays is expected to grow to an average of 38% in 2011. This uptake is due to “growth in the price and usage of specialty medications, the overall rising cost of health care, and the poor economy,” explains Karen Lucas, Director, Specialty Pharmaceuticals Service. Ms. Lucas further comments that “the growth of percent copays, specialty tiers, and wider copay differentials will be slow and steady as many employers remain reluctant to place heavy copay burdens on their employees.”

The majority of commercial health plan members are not covered by out-of-pocket limits.
Health plan panelists were asked to indicate if their plan has out-of-pocket limits in place to cover specialty medications. The number of plans offering out-of-pocket limits in the pharmacy benefit has remained at approximately 45% of plans since 2008. Additionally, many of the plans in HIRC research that offer out-of-pocket limits also report including other pharmacy copays (e.g. oral prescription agents) within the limit. Ms. Lucas expects that “plans will continue to put out-of-pocket limits in place as plan sponsors increasingly adopt percent copays.” Notably, in spring 2010 only one-third of commercial lives represented in HIRC research are covered by out-of-pocket limits.

The Patient Copays chapter of the Specialty Pharmaceuticals Service provides insight into health plans commercial fixed and percent copay enrollment and pricing, as well as out-of-pocket limits for eight key specialty categories.

Research Methodology:
Research was conducted in January and February 2010, with 52 pharmacy and medical directors at leading health plans representing over 46 million commercial lives. Follow-up interviews were conducted with a subset of panelists. In addition to the patient copay and pricing information highlighted in this update, the following updates are included in the Specialty Pharmaceuticals Service: location of benefits coverage, formulary and utilization management trends, and physician reimbursement and specialty pharmacy provider usage.

HEALTH INDUSTRIES RESEARCH COMPANIES (HIRC) is an independent, nonpartisan organization that conducts strategic market research on trends in health care, pharmaceutical, and managed care businesses. HIRC’s benchmark studies focus on the marketing needs of pharmaceutical companies by providing research critical to the development of successful customer-focused marketing strategies.

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Amy Hanley
HIRC
831.426.5283 ext. 29
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Karen Lucas
HIRC
845.638.4446
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