Are prior authorizations and step therapy always the right approach for plan sponsors?
Posted on August 6, 2020
Utilization management (UM) programs are intended to save plan sponsors money and ensure that patients are using the most cost-effective, clinically appropriate medications. However, our team’s recent research for a pharmaceutical manufacturer shows that this is not always the case. In this edition of Let’s Talk, we’re visiting with research co-authors, Sharon Phares, PhD, MPH, Senior Vice President of Research and Data Innovation, and Renee Rayburg, RPh, Vice President of Specialty Clinical Consulting.
Tell us about the purpose of your research.
Renee: We wanted to look at two of the most common UM programs: step therapy and prior authorization. When plan sponsors implement these strategies, the goal is to ensure appropriate use of costly therapies to efficiently achieve positive outcomes. – We wanted to know if they were working as intended.
With prior authorization, the physician must obtain approval from the insurer in advance to make sure the cost of the prescribed drug will be reimbursed. A requirement for approval could be that the patient has the Food and Drug Administration (FDA) approved indication, or there could be stricter requirements. The idea is to provide an important clinical checkpoint to help limit off-label use of drugs and help patients receive medications that are safe and effective for their condition. According to research from the Pharmacy Benefit Management Institute (PBMI), 95 percent of self-insured employers use prior authorization for specialty meds covered under the pharmacy benefit.
With step therapy, there are some required first-line therapies that must be tried before the patient can advance to another therapy. The patient will only advance to the higher-level alternatives – which are often more costly – if the previous steps don’t work or produce adverse effects. A simple example is when a patient is required to try a generic drug first before they are prescribed a brand name drug in the same class. That same PBMI research showed that 86 percent of self-insured employers used step therapy.
Can you provide some details around your methodology?
Sharon: We focused specifically on specialty drugs used to treat multiple sclerosis (MS) and rheumatoid arthritis (RA). Our research included a survey of 344 drug benefit decision-makers, where we asked about:
- Current UM strategies for specialty medications;
- Payer attitudes on the cost, clinical value and overall outcomes of prior authorization and step therapy programs; and
- Future strategies being considered.
To complement that, we leveraged our proprietary Artemetrx platform to look at deidentified medical and pharmacy claims data for about 40,000 patients with diagnosed with RA or MS. We used that real data to gauge the actual financial impact of step therapy and prior authorization on the total cost of care for MS and RA patients.
Did any of your research findings surprise you?
Renee: Anyone who knows me knows that I am a huge proponent of these types of UM strategies as a way for plan sponsors to control costs and manage specialty drug spend. And most pharmacy benefit managers (PBMs) and insurers do, too. It seems like a no-brainer!
Yet, with that being said, I am also a firm believer in leveraging data to see what it tells you about your members and your plan. What the data revealed here is that, in the specific use cases of MS and RA, the economic value was minimal unless you have substantial negotiated rebates. The cost – both in terms of financial and patient impact – could be significant.
Did you discover any unintended impacts of these UM strategies?
Sharon: We did. These strategies, while effective, may also present a significant barrier to care for patients, and that needs to be considered. In both the complex conditions we evaluated, early treatment is vital, and these strategies may delay a patient’s access to important treatment options.
Renee: And I think that is what’s important here. These are “complex conditions.” The original application of these strategies was around common chronic conditions like hypertension, gastroesophageal reflux disease (GERD), and high cholesterol. UM strategies work especially well when there are multiple agents within a therapeutic class that are perceived as clinically similar and differentiated only by cost.
As we’ve begun to see UM measures applied to more complex conditions, groups like the Community Oncology Alliance have formally opposed the idea of using a “first fail” step therapy because it could potentially delay treatment and put a patient’s health in jeopardy. Our research on MS and RA supports that view, as well.
Find out how one plan sponsor adjusted their approach to better serve member needs.
Sharon Phares, PhD, MPH and Renee Rayburg, RPh dive into key takeaways for plan sponsors when it comes to UM strategies in a continuation of this edition of Let’s Talk. Request the complete interview at [email protected].
