A decade ago, most patients were responsible for only their copay on a brand medication. However, the past few years have seen commercial health plans transitioning away from copays.
In a recent IQVIA analysis requested by PhRMA, private insurance patients now pay most of their out-of-pocket spending for brand medicines in the form of deductibles and coinsurance. The study reported that two therapeutic areas, oncology and multiple sclerosis, the deductibles, and coinsurance accounted for more than 90% of out-of-pocket costs paid by patients. In the other five areas studied, deductible/co-insurance accounted for almost one-half to two-thirds of out-of-pocket spending. Across the seven therapeutic areas in the IQVIA analysis, patients with deductibles or coinsurance paid as much as 25 or 30 times more out of pocket annually for brand medicines than patients with copays only.
Health plans and pharmacy benefit managers (PBMs) typically negotiate large rebates with pharma that reduce the cost PBMs pay for the brand medication, but patients with deductibles and coinsurance do not typically benefit from these savings since cost-sharing is based on the full undiscounted price. Rebates and discounts to health plans, PBMs, and government agencies totaled about $175 billion in 2019 and reduced the price paid by an average of 45% compared to list price. However, because health plans typically do not factor in these significant savings when calculating the deductible and coinsurance amounts patients must pay, out-of-pocket costs for these patients can be significantly higher than they otherwise would be if based on the discounted cost of the medicine.
The IQVIA analysis demonstrates that “the increasing use of deductibles and coinsurance by health plans disproportionately burdens patients with chronic conditions who are prescribed brand medicines, who are often some of the most vulnerable in the health system.”
Read the PhRMA summary here https://catalyst.phrma.org/commercial-health-plans-transition-from-copays-to-coinsurance-and-deductibles-has-increased-patient-out-of-pocket-costs-for-brand-medicines
Read the PhRMA full report here https://phrma.org/-/media/Project/PhRMA/PhRMA-Org/PhRMA-Org/PDF/D-F/Faced-with-High-Cost-Sharing-for-Brand-Medicines.pdf