Payer Coverage of Orphan Drugs Often Varies, According to Research Published in The American Journal of Managed Care®

CRANBURY, N.J.--(BUSINESS WIRE)-- Drugs for rare diseases—or orphan drugs—make up a rising share of prescription drug spending; from 1997 to 2017, spending on this expensive category of treatments grew from 4% to 10% of total prescription spending, reaching $43 billion in 2017. Health plans are the gatekeepers to these specialty therapies, and although research has shown that restrictions are used in some plans, some of the more specific details are not known. For instance, are orphan drugs more likely to face restrictions if they have larger budget impacts?

In an effort to understand more about how restrictions might affect access, researchers from the Center for the Evaluation of Value and Risk in Health in the Institute for Clinical Research and Health Policy Studies at Tufts Medical Center analyzed a database of private health plan coverage decisions. Their findings are published in the October issue of The American Journal of Managed Care®.

The researchers used data from the Specialty Drug Evidence and Coverage (SPEC) Database, a database of specialty drug coverage decisions issued by 17 of the largest private US health plans. By comparing coverage of orphan and nonorphan drugs, the authors found that private health plans apply coverage restrictions for orphan drugs about a third of the time, but they apply them more often for nonorphan drugs (47% of the time).

The authors identified variation in how the included health plans covered orphan drugs, with some plans applying coverage restrictions more often than others. The authors also found that health plans were more likely to restrict orphan drugs with certain attributes. The attributes of orphan drugs more likely to be associated with restrictions included drugs for noncancer diseases, self-administered drugs, drugs with alternatives, and drugs for diseases with a higher prevalence or with higher annual costs.

Drug utilization management will likely be used more often, the authors noted, as concerns about both the growing number of available drugs and their costs continue to grow. In 2018, 58% of all drugs approved by the FDA were orphan drugs.

“While health plans tended to cover orphan drugs more generously than nonorphan drugs, they still restricted orphan drug coverage a notable proportion of the time,” said lead author James D. Chambers, PhD. “Our research provides a window into the struggles that plans face to accommodate the ever-increasing number of orphan drugs and how these struggles may affect patients’ access to them.”

Chambers will discuss his study on an episode of Managed Care Cast airing Thursday, October 10, 2019.

About The American Journal of Managed Care^®

The American Journal of Managed Care® (AJMC®) is a multimedia peer-reviewed, MEDLINE-indexed journal that keeps industry leaders on the forefront of health policy by sharing digital research relevant to industry decision-makers. Other brands in the AJMC® family include The American Journal of Accountable Care®, Evidence-Based Oncology™ and Evidence-Based Diabetes Management™. These comprehensive multimedia brands bring together stakeholder views from payers, providers, policymakers and other industry leaders in managed care. AJMC® is a brand of MJH Life Sciences™, the largest privately held, independent, full-service medical media company in the U.S. dedicated to delivering trusted health care news across multiple channels.

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