Meeting the affordability challenges posed by orphan drugs: A survey of payers, providers, and employers

• Main Authors: Gopalan, A. (Author), Ladikos, N. (Author), Lopata, E. (Author), Richardson, T. (Author), Terrone, C. (Author)
• Format: Article
• Language: English
• Published: Academy of Managed Care Pharmacy (AMCP) 2021
• Subjects: Article; clinical article; cost; Costs and Cost Analysis; drug cost; drug manufacture; economics; employer; financial stress; health care; health insurance; health survey; human; Humans; Managed Care Programs; orphan drug; Orphan Drug Production; Pharmaceutical Services; pharmacy (shop); questionnaire; specialty pharmacy; Surveys and Questionnaires; United States
• Online Access: View Fulltext in Publisher

 BACKGROUND: As an increasing number of orphan drugs are FDA approved, health care payers, employers, and providers are attempting to strike a balance between patient access to innovative treatments and overall affordability. Payers and employers are evaluating how traditional specialty pharmacy management strategies and innovative models can support continued coverage of orphan drugs. OBJECTIVE: To understand how health care stakeholders are meeting the financial challenges posed by the increasing number and cost of orphan drugs and how these strategies are affecting orphan drug acquisition for providers. METHODS: A survey was conducted with payer, provider, and employer decision makers recruited from both AMCP and a proprietary database of market-access decision makers in July and August 2020. Respondents were asked about their experiences and activities in the orphan disease space, including tactics to manage affordability of drugs to treat orphan diseases. RESULTS: Reinsurance was the most commonly utilized strategy to maintain affordability of the benefit for both payers (42%) and employers (55%). Although 31% of payers have adopted gene therapy carve-outs, no employers had done so. Approximately three quarters (76%) of payers believe that limited distribution networks impede their abilities to manage orphan drugs, compared with 4% who believe limited networks improve orphan drug management. For most payers (78%), the decision to cover orphan drugs on either the medical or pharmacy benefit depends on the specific drug. Medical benefit coverage was driven primarily by site-of-care policies (55%) and the lower drug cost of average sales price pricing (50%). Pharmacy benefit coverage was driven primarily by a greater ability to manage the orphan drug (71%) and by rebates (62%). One in 3 (33%) of providers with experience treating orphan diseases acquire orphan drugs exclusively through buy and bill, whereas 10% acquire them exclusively through a specialty pharmacy provider. Buy-and-bill acquisition by providers was driven primarily by improved patient affordability (47%) and 340b pricing (47%). Specialty pharmacy provider acquisition was driven primarily by payer requirements (64%) and reduced administrative burden (64%). CONCLUSIONS: Payers and employers are adopting innovative benefit designs and strategies to cover orphan drugs while maintaining plan affordability. Cost considerations are prominent factors in determining whether orphan drugs will be covered under the pharmacy or medical benefit and how providers will acquire orphan drugs. Copyright © 2021, Academy of Managed Care Pharmacy. All rights reserved.