California health insurance exchange calls for copay caps on pricey meds

Anthony Wright, executive director of Health Access California

As lawmakers, payers and drugmakers tussle over copays for pricey drugs, a state exchange is trying to take matters into its own hands.

California's health insurance exchange, Covered California, is laying out a proposal that would cap copays for specialty drugs at a maximum of $500 per prescription, Capital Public Radio reports.

The caps would be even lower depending on the plan patients choose. Some Silver plan members, for example, wouldn't pay more than $200 for specialty drugs on the most expensive tier, and Platinum plan holders would pay no more than $300. Bronze plan members' max would be $500.

This is not California's only attempt to limit drug spending for consumers. A bill that would cap copays and co-insurance is moving through the state legislature, and it would apply to all commercial health insurance regulated by the state. But the exchange staff has the advantage of time on their side, because they don't need legislative approval to make the changes.

The Covered California Board of Directors is expected to vote on the exchange's proposal Thursday. If the measure goes through, the staff's recommendations would apply to plans in 2016, according to the CPR story.

"It's inequitable that people with certain conditions have thousands of dollars more in costs than people with other conditions in our current system without these caps," said Anthony Wright, executive director of Health Access California (as quoted by CPR).

The move comes amid legislative pushback as lawmakers look to cap patients' spending on pricey meds. States such as New York and Maryland have passed laws calling for caps on specialty drug copays, and Oregon and Illinois introduced similar legislation last month. Two bills now pending in the Oregon legislature would cap copays at $100 per 30-day supply of standard-issue drugs, and a Senate version of the legislation spells out a cap of $200 for specialty meds.

But payers and insurance companies are none too pleased with the caps, which they see as limiting their own pricing-cutting tactics. The real problem is prescription drug prices, not copays, the companies argue, especially as drugmakers continue to roll out more expensive meds. Gilead Sciences' ($GILD) $84,000-per-treatment-course Sovaldi is an oft-cited example, as are 6-figure cancer drugs from companies such as Merck ($MRK) and Bristol-Myers Squibb ($BMY).

Payers have been striking back at pharma companies that use copay discounts to promote their branded meds. Pharmacy benefits managers have actually tossed drugs with copay discounts off their formularies. In 2013, Express Scripts ($ESRX) shoved 48 drugs off its formulary, including products with copay programs. Last year, UnitedHealthcare ($UNH) expanded its coupon-elimination pilot program to 25 additional meds, sparking similar moves from smaller PBMs and insurers.

- read the Capital Public Radio story

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