Over the past two decades the use of step therapy or edits by health insurers has increased significantly. Step therapy, also called step edits, implies that in a given therapeutic class lower cost (or more cost-effective) drugs must be prescribed first prior to allowing reimbursement of more expensive (or less cost-effective) options.
On the one hand, step therapy protocols provide insurers with leverage to negotiate lower prescription drug costs. On the other, step therapy is considered an onerous condition of reimbursement, particularly given its fail-first implications. That is, step therapy often implies that patients must first fail on a less costly drug before being prescribed a more expensive treatment and having it reimbursed.
Last year, Chambers and colleagues reported that step therapy is commonly deployed for specialty pharmaceuticals, or high cost drugs typically prescribed for chronic or life-threatening conditions, including diseases such as rheumatoid arthritis, multiple sclerosis, and cancer. In an analysis of specialty drug coverage decisions by large U.S. commercial health plans, Chambers et al. found that step edits were in fact the most common restriction - employed in close to three-quarters of decisions, to limit specialty drug coverage.
The commercial sector is not alone in its usage of step therapy, along with other formulary restrictions. Medicare Part D plans make use of a similar set of formulary management tools for outpatient drugs. This includes the decision on whether to cover a particular drug, in which patient cost-share tier to place the drug, and whether to institute prior authorization, quantity limits, and step therapy.
In August 2018, the Centers for Medicare and Medicaid Services (CMS) introduced proposed changes to the formulary management of Medicare Part B (physician-administered) drugs by Medicare Advantage plans. Importantly, these changes would allow Medicare Advantage plans to implement step therapy for Part B drugs.
Step therapy has been deployed in Medicaid formulary management for decades. Formulary management is more challenging for Medicaid plans, whether they are fee-for-service or managed care. This is because the Medicaid program requires drug manufacturers to enter into a national rebate agreement with the Department of Health and Human Services in exchange for state Medicaid coverage of virtually all the manufacturers' drugs. In addition, Medicaid may not institute patient cost-share tiering. Therefore, Medicaid formulary managers' toolkit is limited to prior authorization, quantity limits, and step therapy.
A new study published in the journal PharmacoEconomics demonstrates the impact that step therapy can have on patients with rheumatoid and psoriatic arthritis. The study, conducted by Eli Lilly in partnership with IBM Watson Health, provides evidence that step therapy can have negative health consequences. Researchers compared health outcomes of patients enrolled in insurance programs with step therapy access restrictions and programs without.
The study found that patients with psoriatic arthritis whose insurers implemented step therapy had 25% lower odds of treatment effectiveness and 27% lower odds of medication adherence, compared to patients with the same disease who did not have similar access restrictions.
Additionally, significantly more patients enrolled in plans that included access restrictions filled prescriptions for gluco-corticosteroids and nonsteroidal anti-inflammatory drugs than patients without access restrictions. This may be an indication of poorly managed disease.
What this initial empirical evidence suggests for the two diseases in question is that in order to minimize deleterious outcomes it's important to ensure judicious use of step therapy. This may imply the need to better align s tep therapy protocols with clinical practice guidelines published by medical professional societies.
However, because this study only examined two disease indications, it is not generalizable to other diseases and conditions. In this respect, there is an obvious need for more empirical evidence on the impact of the use of step therapy on health outcomes.