Drug Discovery and Development

  • Home Drug Discovery and Development
  • Drug Discovery
  • Women in Pharma
  • Oncology
  • Neurological Disease
  • Infectious Disease
  • R&D 100 Awards
  • Pharma 50
    • 2022 Pharma 50
    • 2021 Pharma 50

How Do Insurers Decide What Medicines to Pay For?

By Tom Murphy AP Health Writer | March 21, 2017

How do insurance companies decide what medicines to pay for and when to pay for them?

Insurers and other payers look first at how well the drug works – not its cost – when they decide whether to cover the latest treatments, according to the nation’s largest pharmacy benefits manager, Express Scripts.

The price patients eventually pay gets determined later, when an insurance company or pharmacy benefits manager decides where a drug fits on a list of covered treatments called a formulary.

The cost of prescription drugs has become a growing source of concern with doctors and patients, but it’s not a factor considered by an independent committee used by Express Script to determine coverage of a new drug, Chief Medical Officer Dr. Steve Miller said.

That committee – 15 doctors and a pharmacist – reviews the information that federal regulators used to approve a drug and then decides whether it should be covered.

Some payer coverage decisions come with qualifications like a requirement that patients meet specific criteria or try other treatments first. That can limit patient access. Doctors say some patients have had trouble getting a new cholesterol-lowering drug, Repatha, that costs $14,000 a year, because of the restrictions.

Insurers largely use pharmacy benefits managers to set up the lists that determine how much a patient ends up paying. Some lists are divided into tiers, with drugs on the bottom generally being generic or least expensive. Those on the highest tier might include specialty medicines that could cost the patient hundreds of dollars even with coverage.

Whether a drug even gets on the list can depend on whether a similar medicine is already in the market. When the ground-breaking hepatitis C treatments Sovaldi and Harvoni from Gilead Sciences debuted a few years ago, Express Scripts had to include them. They cost more than $80,000 for a course of treatment, but the drugs essentially cure a debilitating disease and they had no competition.

But once the drugmaker AbbVie produced a third option, Viekira Pak, with a similar cure rate, Express Scripts was able to negotiate a price discount and switched to covering only Viekira Pak.

The nation’s two largest pharmacy benefits managers, Express Scripts and CVS Health Corp., both say they cover Repatha.


Filed Under: Drug Discovery

 

Related Articles Read More >

Diversity
Making diversity in clinical research more than a talking point
psychedelic medicine discussed at SXSW
5 headwinds and 5 tailwinds for psychedelic medicine
lab microscope
Accelerating R&D with FAIR data
Kallyope
Kallyope’s focus on the gut-brain axis yields a diverse portfolio

Need Drug Discovery news in a minute?

We Deliver!
Drug Discovery & Development Enewsletters get you caught up on all the mission critical news you need. Sign up today.
Enews Signup
Drug Discovery and Development
  • MassDevice
  • DeviceTalks
  • Medical Design & Outsourcing
  • Medical Tubing + Extrusion
  • Medtech100 Index
  • Medical Design Sourcing
  • Subscribe to our Free E-Newsletter
  • Contact Us
  • About Us
  • Advertise With Us
  • R&D World
  • Drug Delivery Business News
  • Pharmaceutical Processing World

Copyright © 2022 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy | Advertising | About Us

Search Drug Discovery & Development

  • Home Drug Discovery and Development
  • Drug Discovery
  • Women in Pharma
  • Oncology
  • Neurological Disease
  • Infectious Disease
  • R&D 100 Awards
  • Pharma 50
    • 2022 Pharma 50
    • 2021 Pharma 50