Is it Ethical to Vary Out-Of-Pocket Costs?

A new study published in the Journal of Managed Care & Specialty Pharmacy questions the ethics of varied out-of-pocket costs that steer patients towards certain drugs. The study authors created a set of 5 guidelines for when patients with the same condition should not pay different costs for treatment.

Wide-ranging out-of-pocket costs allows payers to manage costs, and to direct patients to more cost-efficient drugs instead of costlier branded drugs. Unfortunately, the cost-sharing of the medication is determined by overall costs instead of appropriateness.

This practice may lead to unintentional impacts of adherence, costs, and patient outcomes, according to the study.

Patients with the same condition may require different therapy based on genetics, comorbidities, socioeconomic status, or disease severity. Patients may also experience different cost-sharing based on formulary tiers.

While certain patients may respond better to a lower-cost drug, others may require a costlier drug that comes with higher cost sharing.

To assess this phenomenon, the National Pharmaceutical Council (NPC) hosted a roundtable where the researchers reviewed white papers that address the ethical, actuarial, and legal issues, as well as opinions from patients, payers, and employers.

“We sought perspectives from the expert roundtable to help determine when it is acceptable to have variations in the costs patients with the same condition face,” said Jennifer Graff, PharmD, vice president of Comparative Effectiveness Research at NPC. “These discussions are important in achieving the fundamental goal of cost-sharing strategies—aligning costs to the most appropriate medical care.”

During the panel, the researchers examined 4 case studies to determine how to distribute costs equally among patients, plan members, or employees. Additionally, the investigators sought ways to address barriers to align out-of-pocket costs with clinically appropriate therapies, according to the study.

Included were studies regarding rheumatoid arthritis, diagnostic-based treatments for cystic fibrosis, patient preference for fibromyalgia treatment, and patient preference for osteoporosis treatment.

The panel created 5 guidelines addressing when it is acceptable for patients to pay different out-of-pocket costs for the same conditions.

1. Try and fail

If the initial, lower-cost treatment is unsuccessful, patients should have access to higher-cost drugs at lower costs, according to the study.

2. Benefits are clinically significant

Out-of-pocket costs should be lowered if there is significant evidence that a higher-cost drug will provide the patient with better outcomes.

3. Costs should be linked to benefits

If treatment costs are aligned with safety and efficacy data, cost-sharing should decrease, according to the study.

4. High costs should not be influenced by treatment failure

Cost-sharing should not be influenced by treatment failure based on genetics or biology.

5. Reduce discrepancies in out-of-pocket costs

Large increases in out-of-pocket costs to incentivize lower costing drugs should be avoided.

“It can be challenging for employers to manage health care costs when their employees require higher-cost treatments,” said Cheryl Larson, vice president of the Midwest Business Group on Health. “Employers are seeking evidence-based approaches to support or justify their health care costs. These principles create useful parameters for employers to consider as they select health benefits and make investments to ensure they maintain a healthy, satisfied and productive workforce.”

With healthcare trending towards value-based care, the incentive to provide patients with a clinically effective treatment with low out-of-pocket costs is increasingly important, according to the study.

“For stakeholders involved in benefit design to succeed in incentivizing the right care, a one-size-fits-all approach won’t deliver that,” said Helen Sherman, PharmD, chief pharmacy officer at Solid Benefit Guidance. “The panelists agreed that cost-sharing is appropriate in the right situations, but when a treatment is proven and medically necessary, a patient’s bad luck is not one of them. The solutions outlined in this paper deliver smart guardrails that, if applied, can help improve the care plans provide and patients receive.”