More Legislation Introduced to Ban Specialty Tiers in States

The introduction of legislation to ensure access by patients to high-cost therapies continues to increase throughout the country. As of this writing, 16 states have introduced legislation to eliminate the increased practice by private insurance companies to classify high-cost drugs under specialty tiers and/or coinsurance. These states include Arizona, California, Florida, Georgia, Hawaii, Illinois, Kansas, Louisiana, Maryland, Minnesota, Nebraska, New Mexico, Ohio, Pennsylvania, Virginia and Washington. Previously, the state of New York banned the classification of these drugs under specialty tiers or coinsurance because it found the practice discriminatory.

High-cost drugs included in specialty tiers and coinsurance are those that cost more than $600 and/or are infusible/injectable therapies that need to be provided through specialty pharmacies rather than retail pharmacies. This includes all intravenous immune globulin products, coagulation factor products, alpha-one products, as well as immune suppressants, interferons, immune modulators, anti-rejection medications for organ transplantation and chemotherapy drugs. There are no generic alternatives to any of these therapies. These drugs are used to treat genetic disorders and chronic and rare diseases, which include autoimmune diseases, cancer, cystic fibrosis, epilepsy, hemophilia, hepatitis, HIV/AIDS, lysosomal storage disease, multiple sclerosis, neuropathy, osteoporosis, primary immunodeficiency, and the list goes on.

States are using many approaches to deal with specialty tiers and coinsurance, ranging from preventing plans from increasing coinsurance throughout a plan year, placing these therapies under catastrophic coverage so they are 100 percent covered once maximum out-of-pocket has been paid, and banning the practice of specialty tiers altogether, while capping out-of-pocket expenses on prescription medications.

Medicare Part D, the Federal Employees Health Benefits Program, Tricare and Employee Retirement Income Security Act (ERISA) plans remain subject to this practice, and, on average, these patients must pay 30 percent of the cost of the medication. The insurance companies argue that by not using specialty tiers, they would have to increase premiums and/or stop providing plans in the states that are trying to pass legislation similar to New York’s.