![Patient choice cards: Who pays?](https://www.benefitscanada.com/wp-content/uploads/sites/7/2012/04/drugs-benefits-e1478545077663.jpg)
Birt welcomes patient reimbursement cards as a way to keep patients on a preferred therapy. “If the patient can get the original drug and it doesn’t cost them any more, then I just do it [prescribe the brand],” she says. “I also appreciate that the cards don’t have me filling out a lot of paperwork.”
Reimbursement cards may be helpful for people with Parkinson’s disease, too, says Barbara Snelgrove, director, education and support services, with Parkinson Society Canada. “People with Parkinson’s are super sensitive to medications and find that some medicines are more effective than others; some can’t tolerate the generic version of drugs. When there is a benefit to staying on the brand drug, people can get a card from their neurologist that will pick up the cost difference between the brand and the generic drug. That’s a benefit because it relieves the financial burden. We’ve had incredible feedback from our folks, and we wish more drug companies would offer similar programs. Just because an employer is willing to cover the generic drug doesn’t mean it is necessarily good for you. It’s better to have a system that is flexible to the needs of different people.”
Patients with attention deficit hyperactivity disorder (ADHD) may benefit from patient reimbursement cards, as well, according to Laura Espinoza, manager, strategic communication, with Global Pharmaceuticals Communication & Public Affairs. As she explains, Janssen Inc., a member of Rx&D, provides certain co-pay cards and patient benefit programs to provide, among other things, the opportunity for patients to play an active role in managing their treatment, continuity of patient care and better access to medications that benefit patient health. An example of one of these programs is the Concerta patient benefit program, which ensures patients with ADHD who are being successfully treated with Concerta are able to remain receiving the drug at no additional cost. “The need for this patient benefit program was identified as a result of physician reporting of clinically observed differences when patients were switched from Concerta to a generic substitution and was further supported by data from two clinical studies,” says Espinoza.
The reimbursement cards may offer a wider benefit by boosting adherence, adds Nicolle, who reviews anonymous and privacy protected claims data collected on the usage of cards. “We’ve seen greater adherence in those with cards versus those without,” he says. “And that’s good for everyone in the healthcare system.”
Payer’s perspective
Sarah Beech, president of Pal Benefits Inc., agrees with Nicolle that drug company reimbursement cards give patients choice and allow for continuity of care. “This is not supposed to cost the payer more because the intent is for the branded company to pick up the cost,” she says. “Plan sponsors don’t want to take the place of medical experts but want what is in the best interests for employees and best for cost management.”
Yet, while third-party payers may indeed understand that patients and their physicians want the option to choose brand drugs over generics, some stakeholders believe that patient reimbursement cards raise serious issues for the benefits industry. Already, the persistent notion that brand drugs are in some way “superior” to generics is a challenge for payers that would prefer plan members use lower-cost alternatives, if possible.
Although patient reimbursement cards could take some of the sting out of the higher costs associated with brand name drugs, that’s not always the case (see charts), since the cards are the last payer in the payment flow at the dispensary. If the drug company behind the reimbursement card picks up the full cost above the generic price, the plan sponsor is spared the impact of the higher brand price.
But if the drug plan is voluntary generic or open, the sponsor typically ends up paying the full brand cost when the member fills a prescription for a brand name drug and the physician has written “no substitution.” Of course, such plans anticipate paying the full cost for some brand drugs, particularly when there isn’t a generic or lower-cost equivalent available. However, some industry stakeholders believe that the growing usage of patient reimbursement cards is driving a higher than expected number of claims for brand drugs.
This trend leaves the vast majority of private drug plans vulnerable to increased drug spend, says Heather West director, market access, with Apotex Inc. “Coupon [reimbursement] cards change the drug plan paradigm. In the absence of a coupon card, the lowest-cost drug is generally distributed at the pharmacy. Add the surge of coupon cards, and the shift to brand dispensing leaves plan sponsors picking up the cost of these higher-cost drugs and feeling set back at plan renewal to learn their drug spend was significantly higher than budgeted based on prior years’ trending.”
Mike Sullivan, a pharmacist and president of Cubic Health Inc., agrees that plan sponsors could face higher costs because of reimbursement cards. His chief concern is whether there are adverse consequences with co-ordination of benefits (COB). “For example, if someone goes to the pharmacy with a ‘coupon’ or ‘choice’ brand card and the drug plan only pays for the generic drug price, their spouse’s drug plan is on the hook for the remainder of the cost,” he explains. “If the secondary plan also only pays up to the generic drug price then what is left over after that would be paid for through the brand card. This is a new challenge with respect to existing COB rules, and it is now showing up in the claims data. If the cards were second payer, then plan sponsors could be less concerned about their potential financial liability.”
As many as 95% of drug plans may not be protected from having to pay higher amounts for the brand name drug versus generic substitution, according to Barbara Martinez, formerly a principal, health and benefits, with Mercer, and currently a benefits solutions practice leader with Great-West Life. “Most plans do not have mandatory generic because it has traditionally been expected that pharmacists would (and do) automatically substitute the lowest-cost drug, typically a generic,” she says. “In fact, in absence of a card, this may even be required in some provinces. These cards change that dynamic and leave plans vulnerable to paying for a brand name drug at a higher cost to the employer.”
But when drug plans are managed properly, costs to the plan sponsor do not need to increase as a result of plan members’ usage of co-pay [reimbursement] cards, says Brad Fedorchuk, vice-president, group marketing, with Great-West Life. “Plan sponsors are encouraged to implement enhanced generic substitution in their group benefits plans, which means that when a claim for a brand name drug is submitted, reimbursement will be based on the cost of the generic drug if that cost is lower.”
For example, Great-West Life recently introduced enhanced generic substitution as a new standard contract provision to help plan sponsors maintain benefits plan sustainability while still allowing plan members the flexibility to choose to purchase the brand name drug, if they prefer, and pay the cost difference, says Fedorchuk. He adds that Great-West has also introduced a standard contract and booklet wording requiring plan members to apply for these and other types of patient assistance programs where they exist. “In this way, if a plan member really believes they need a brand name drug, ensuring the plan member is required to apply for an assistance program can still result in plan cost savings.”
Sun Life Financial, too, is taking measures to control spending on brand name drugs. Although he doesn’t directly link patient reimbursement cards to rising drug plan costs, Dave Jones, vice-president, market development group benefits, with Sun Life, notes a significant increase in the number of brand drug prescriptions with “no substitution.” “Doctors are even using stickers now with stop signs to denote ‘no substitution,’” he says, adding that from July 2011 to July 2012, there was a 138% increase in “no substitution” scripts for Lipitor and a 262% increase for Crestor. “These represent extreme cases, but others are rising, too. At the end of the day, it means greater cost to plan sponsors.”
The situation has led Sun Life to look for solutions, and, most recently, it moved to make generic the default plan design. “It’s up to the client to accept this as the default or not,” says Jones. “If they do, then we will reimburse whatever drug the plan member chooses, but where a lower-cost alternative is available, we reimburse only at the level of the lowest-cost alternative, which is most often the generic.”
Like others, Jones says his company strongly supports the notion that the individual plan member has a choice, and which drug is prescribed is information between the patient, the doctor and the pharmacist. “However, the clinical evidence is conclusive that in the vast majority of cases, generic drugs are a safe, effective alternative. Only in a small number of cases (0.5% according to a University of Pittsburgh study) does an individual have an adverse reaction to a particular drug.” If there is a valid medical reason that the lowest-cost alternative won’t do, then the patient can get his or her physician to fill out an exception form, he adds. “No substitution” stickers will no longer be enough.
In the interim, it is up to the plan sponsor to decide how to deal with the potential impact of patient reimbursement cards and for plan members to decide what treatment plan they want to follow. “Plan sponsors need to look at the definitions and objectives for their plan,” Beech notes. “If they do that, there is room for all different players, and there are different ways to look at cost management.”