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When you pick up your monthly prescription at the pharmacy counter, you may owe a co-pay of $10 or $20. Or you may pay much, much more.  Why the discrepancy?



As a new video from the Alliance for Patient Access explains, out-of-pocket costs are determined by health plans’ tiered payment structures. Insurers group drugs into different categories, each with its own level of cost sharing.  Low-cost generics or drugs that are preferred by the insurer may fall into a lower tier with a flat, relatively modest co-pay.

Specialty drugs are separate.  These are complex, costly drugs that may require special handling or that may need to be administered or monitored by a physician.  Biologics, for example.  Insurers often group them in the highest tier, the specialty tier.  And, for these medications, patients may be required to pay co-insurance, a percentage of the drug’s cost.

The out-of-pocket expense can be hundreds, even thousands of dollars, blocking some patients from the care they need.  And, as the video explains, the number of specialty drugs is rising – leaving more patients in the lurch.

How do policymakers solve this problem?

The video alludes to several potential solutions.  “One option is to make modest increases in the co-pays required by lower tiers,” the video explains, noting that, “The FDA tells us that nine out of every 10 prescriptions filled are for generic drugs.  Slightly increasing co-pays for these medications could offset the cost of life-saving drugs in the higher tiers.”

The video also notes that ending the federal government’s prohibition on co-pay coupons for Medicare patients could help those who require life-changing yet costly medication.

To learn more, watch “Understanding Specialty Tiers.”

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