Commercial health insurance plans, as well as state Medicaid programs, employ various strategies to reduce the costs of medical care and prescription drugs. These strategies include Step Therapy, Tiered Formularies, and Prior Authorization. NHF understands the need for insurers to control costs through appropriate utilization management measures, but also believes that patients should have access to the medications prescribed by their doctor through a clear and reasonable process.
NHF is a member of the SAIM Coalition, which advocates for reasonable exceptions to step therapy.
“Step therapy is an insurance protocol that requires patients to unsuccessfully try one or more insurer-preferred medications before they receive coverage for the medication that their physician recommends. This practice is also known as “fail first” and can take weeks or months. Once a patient finds a medication that does work for them, they may have to repeat the step therapy process if they switch insurance plans.
When implemented inappropriately, step therapy can result in patients not being able to access the treatments they need in a timely manner. This can lead to worsened symptoms and presents a particular challenge for patients suffering from life-threatening or chronic diseases. Physicians can request exceptions to step therapy requirements, but insurers may not respond promptly to such requests, resulting in a further delay of treatment.
The SAIM Coalition supports common-sense limits on step therapy such as establishing clear timelines for insurer responses to requests for exceptions and ensuring that patients who are successfully using a treatment do not have to switch.”1
Thirty states and the District of Columbia have enacted legislation establishing limitations on the use of step therapy including Louisiana and North Carolina in 2020. Step therapy bills were advancing through several other state legislatures with bipartisan support when the COVID 19 pandemic upended the legislative process.
“One of the tools used by Pharmacy Benefit Managers (PBMs) to manage prescription costs is requiring that certain drugs receive prior authorization (PA) from the PBM before dispensing.”2 Prior authorization is often applicable to medical services as well. Proponents of the prior authorization process contend that its overarching goal is two-fold – "to encourage appropriate use of medications, both to reduce the incidence of preventable drug-related morbidity and to contain costs. The philosophy behind this mechanism, which intuitively seems to help promote the delivery of quality health care, is to target new, costly, or potentially toxic medications, and to encourage use of less-expensive, safer alternatives."3
The current prior authorization process threatens timely access to treatment for patients. This access is vital to the health of individuals living with bleeding disorders, as lengthy wait times can quickly lead to a severely deteriorated condition.
Several factors contribute to delayed treatment. Confusion over multiple forms can result in a missed deadline, or the correct forms not being submitted at all. This usually occurs when a patient is prescribed more than one prescription drug or are referred for a service that requires prior authorization. Then there is a need to complete a different form for each prescription drug or service. The use of paper forms, as opposed to electronic ones, is another reason for delay. Processing a paper form takes longer than it would to process an electronic form. Lastly, a prolonged response time from PBMs can hinder timely access to medically necessary treatment.
NHF supports legislation that standardizes the prior authorization process. We advocate for a single, standardized prior authorization form that is used by all payers. The form should be available to be submitted electronically, and via facsimile. In addition, NHF recommends that a time limit for a response from the PBM be stipulated. This time limit delineates how long an insurer must approve or reject a prior-authorization, or to request more information. If there is no response by the end of the given time period, then the request is automatically authorized, and the patient receives the requested prescription drug or service. Specifying a page limit for the standard prior authorization form also cuts down on confusion. Finally, NHF recommends that the legislation define a standard length of time for which the prior authorization remains valid after approval.
Currently, private payers and Medicaid often include a prior authorization requirement, which usually requires a clinical diagnosis of a bleeding disorder by a patient’s physician before clotting factor can be dispensed. Prior authorizations are also required to be renewed at certain time intervals, e.g., six or twelve months, before factor can be dispensed. Because hemophilia and related inherited bleeding disorders are genetic conditions with no cure NHF believes the use of prior authorizations beyond the initial diagnosis is cumbersome and unnecessary and creates an obstacle to a patient receiving vital life-saving medication. Hence, NHF advocates for the longest prior authorization period possible.
NHF opposes the practice of commercial payers to place all or most expensive therapies on the highest tier of their formulary. Placement on the highest tier requires patients to pay more out of pocket for their medications. Patients with chronic diseases, such as hemophilia, do not have the choice to go without their medication because it’s too expensive. The use of specialty tiers can be discriminatory against patients with bleeding disorders by making their medication cost prohibitive through higher copayment or coinsurance requirements.
Network Adequacy and Sole Source Contracting
Payers, public and private, also attempt to control costs by tightly controlling their network of providers, including restricting patients to using a single specialty pharmacy contracted with the payer or PBM. NHF advocates for payer networks to include hemophilia treatment centers (HTC’s) for all the services they provide including the pharmacy. HTC-delivered care has been shown to provide superior patient outcomes. Ideally, patients should have a choice between a 340B pharmacy and commercial specialty pharmacy to provide their medication.
In the recent past, NHF has seen sole source situations occur in Medicaid programs; however, the trend has started navigating to the private insurance market at a rapid pace, particularly with specialty pharmacy services providers. In fact, a more common variation on this theme is for insurance companies to acquire specialty pharmacies and mandate that all consumers on their plans utilize that “in-house” specialty pharmacy.
While intended as a cost containment measure, failure to maintain a “competitive market” of qualified specialty pharmacy providers experienced in handling individuals with hemophilia or related bleeding disorders can cause significant risk to patient safety and result in increased costs.
First, there are safety concerns. In some instances, insurers or PBMs have contracted with specialty pharmacy providers who have little or no experience in managing prescribed therapies for individuals with hemophilia or related bleeding disorders. Timely assistance with therapy needs in compliance with prescribed therapy regimens is critical to achieving positive, cost effective, patient outcomes. Specialized knowledge of the unique needs of the hemophilia community, along with timely consultation with the HTC’s multi-disciplinary team, is necessary in order to prevent delays/barriers in access to care. Lack of timely or compliant therapy access, in coordination with disease management teams at HTCs, can lead to detrimental, adverse health risks to patients, including increased bleeding episodes, frequent hospitalizations, increased joint disease and in worst case scenarios, premature death. These adverse health risks also lead to higher costs for insurers.
Second, when a contract is sole sourced, the pharmacy services provider may not provide access to the full range of clotting factor therapies. For example, a sole source provider may attempt to contain costs by limiting the number of products available to consumers. While in other patient populations, this may not have detrimental effects, because of the biologic nature of clotting factor therapies and an individual patient’s metabolic rate and other reactions to the medications, not every clotting factor product works effectively for every patient. Thus, if patients are forced to use a particular product that is not effective for them, they could require more medication to prevent or control bleeding episodes, thereby driving up costs; require more frequent hospitalizations for uncontrolled bleeds; or could experience other resulting effects of uncontrolled bleeds such as joint, tissue, or organ damage.
Third, without more than one option, patients are potentially denied reasonable access to specialty pharmacy services in already under-served rural and urban areas. If a single provider without the ability to effectively manage patients in such areas is the only option, patients will not have access to the ancillary supplies and services, such as a disease management, care coordination, and patient education services that they require to effectively manage their disease. When insurers sole source and exclude the providers traditionally available and able to assist the communities in the area, this causes unnecessary risk to the patients.
Finally, sole source contracts are typically entered into with specialty pharmacies under the traditional delivery method; however, this does not factor in the 340B delivery of specialty drugs. In addition to providing the ancillary services that other specialty pharmacy providers provide for patients, 340B pharmacies at HTCs are required to reinvest the income from their program into services that would not otherwise be reimbursed for patients. This provides for extra, quality care for patients and gives them the convenient option of obtaining their pharmacy and medical needs from the same provider. Published data documenting the importance of federally recognized HTCs in decreasing the morbidity and mortality of hemophilia patients.4 The participation of these federally recognized centers of excellence is a critical component to effective disease management of this population. Disease management with the goal of cost containment alone will prove to negatively impact outcomes and can lead to higher costs for insurers.
Denying access to qualified specialty pharmacy providers experienced in managing patients with hemophilia and ensuring quality through a competitive, specialty pharmacy market, payers potentially place patients at risk of adverse health incidences and may possibly increase overall costs in managing the care of individuals with hemophilia.
1 Step Therapy | State Access to Innovative Medicines Coalition (saimcoalition.org)
2 Krieger, Leah. “Prescription for Prior Authorizations: A Better Way.” PolicyMatters Journal: The Journal of the Goldman School of Public Policy University of California Berkeley (Spring 2011).>
3 MacKinnon, Neil J, and Ritu Kumar. “Prior Authorization Programs: A Critical Review of the Literature.” Journal of Managed Care Pharmacy Volume 7 number 4(July/August 2001): p 297.
4 See Soucie JM, et al. Blood 2000; 96(2):437-442.