An oft-repeated talking point for proponents of prescription drug affordability boards is that capping the top-line price of medications will result in lower premiums and out-of-pocket spending by patients. But a new report from the Partnership to Fight Chronic Disease calls those claims into question.
The report reveals health plans – the companies who dictate cost and access to the medications patients rely on — are sounding the alarm on PDABs.
The survey, conducted by Avalere Health, found 77% of health plan payers believe PDABs will disrupt patient access to prescription drugs, either due to coverage changes that drive up patient cost or supply chain issues that hinder availability.
The survey results validate key concerns about upper payment limits:
- Increased Costs for Patients: 67% of payers surveyed anticipate patient cost sharing increasing or staying the same. 57% anticipate they will increase premiums if an upper payment limit (UPL) is implemented. Only 10% anticipated lowering premiums.
- Reduced Access to Medications: 50% of payers surveyed indicated they would increase utilization management protocols, which often result in delayed or denied treatments. 60% expect negative impacts to pharmacy reimbursements resulting from a UPL to make it less likely pharmacies stock UPL drugs.
The double-blind survey released in March analyzed responses from health insurance executives with experience in their plan’s decision-making. The findings are evidence of a critical disconnect between the theoretical benefits of PDABs’ upper payment limits and the real-world consequences. The research highlights health plans’ concerns with upper payment limits and the actions they’ll take to lessen the impact to their business.
Several health insurance representatives surveyed spoke directly to the fact that health insurance companies will not be able to absorb increased costs brought on by PDABs, and they will pass price hikes down to patients. One respondent stated:
“that cost has to be absorbed by somebody, and … the carrier is not going to absorb it because we might reduce our profitability.”
Critical drugs may even disappear from the pharmacy, and others will carry higher price tags with other access challenges, as one payer bluntly stated:
“…patients may not be able to get their preferred drugs, and the other alternative drugs may have higher out of pocket costs and require a prior authorization.”
As PDABs consider setting upper payment limits, they should take this report into account. When health plans clearly state how their enrollees will be impacted, there’s little need to theorize about possible outcomes for patients.