California's pharma-friendly copay caps could spread to other states

It's official: California's state insurance exchange has capped drug copays. After weighing the new policy for months, Covered California slapped a $250 monthly copay cap on specialty meds, with specific limits on some drugs in some plans ranging from $150 to $500.

The move in California will help patients' pocketbooks and potentially boost sales for drugmakers. Needless to say, it's not popular with insurers, who say the copay limits will cost them money. And the idea could quickly spread, with copay-capping bills now pending in Oregon and Illinois. That could be a boon for drugmakers, especially considering recent research showing that people have postponed refills--or gone without meds altogether--because they can't afford to pay. More refills and filled scripts obviously means more sales.

The caps come at a time when drug prices, particularly among specialty treatments for diseases such as hepatitis C and cancer, are rising to unprecedented levels. Pharma's pricing policies have drawn fire in the media--and from lawmakers--while prompting pharmacy benefits managers and health plans to play hardball, trading formulary placement for guaranteed discounts.

Insurers have also been jacking up copays for pricier meds in an attempt to steer patients toward less-expensive options. But with some breakthrough treatments, cheaper equivalents don't exist. The new generation of hepatitis C drugs, for example, deliver cure rates upwards of 95% for many patients, with minimal side effects compared with older treatment cocktails that include the difficult-to-tolerate interferon.

Patient advocates and drugmakers have been lobbying for the copay caps, and with Covered California, they'll get their way. The copay caps vary by plan, with the $500 maximum applying to patients covered at the Bronze level.

Two bills now pending in the Oregon legislature would cap copays at $100 per 30-day supply of standard-issue drugs. The Senate version spells out a cap of $200 for specialty meds, which often come with 20% or even 30% co-insurance. Both would limit a single patients' share of drug costs. Illinois legislators have introduced similar bills. The states of New York and Maryland already set caps on copays.

- see the Bloomberg story

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