Payer coverage of FDA-approved drugs

Many people think that once a treatment is approved, your insurance automatically covers the treatment.  However, that is no longer the case.  Some health plans may keep certain drugs off of formularies.  Others health plans have drugs on formulary but may require step edits (failing another drug first before moving to the novel treatment) and prior authorizations (need for a formal approval for a drug) before patients are able to get coverage for a treatment.  An empirical question is then, how frequently are patients denied coverage for novel treatments after FDA approval.

This is exactly the research question that Shaw et al. (2018) attempt to answer. Using data on Medicare prescription drug benefit  plan data between 2007-2015 of 144 novel treamtents, the authors find that:

The proportion of novel therapeutics covered by at least 1 Medicare prescription drug plan was 90% (129 of 144) and 97% (140 of 144) at 1 year and 3 years after approval, respectively. At 3 years after approval, 28% (40 of 144) of novel therapeutics were covered by all plans. Novel therapeutic agents were covered by a median of 61% (interquartile range [IQR] = 39%-90%) of plans at 1 year and 79% (IQR = 57%-100%) at 3 years (P < 0.001). When novel therapeutics were covered, many plans restricted coverage through prior authorization or step therapy requirements. The median proportion of unrestrictive coverage was 29% (IQR = 13%-54%) at 3 years. Several drug characteristics, including therapeutic area, FDA priority review, FDA-accelerated approval, and CMS-protected drug class, were associated with higher rates of coverage…

In short, most drugs are formally covered by health plans, but may require patients to jump through a lot of hoops (i.e., prior authorizations and step-edits) to be able to access these medications.

from Dental Tips https://www.healthcare-economist.com/2018/12/03/payer-coverage-of-fda-approved-drugs/

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