Skip to main content


Specialty Drug Coverage Varies Widely Across Commercial Payers

By John Commins  
   July 11, 2018

Only 16% of 302 specialty drugs examined in a new study were covered the same way by 17 major health plans, and half of the coverage decisions were consistent with FDA guidelines.

Tufts Medical Center researchers have found wide variations in specialty drug coverage among the nation's largest commercial health insurance plans.

James Chambers, lead author of a study that appears this week in Health Affairs, says his research team found that only 16% of 302 specialty drugs were covered the same way by all health plans.

About half the drugs (48%) were covered the same way by at least 75% of plans, and nearly 52% of insurance coverage decisions were in line with FDA guidance.

Chambers spoke with HealthLeaders Media about the study. The following is a lightly edited transcript.

HLM: Why did you do this study?

Chambers: The U.S. healthcare system is fragmented, particularly the commercial payer space. We tried in this study to get a better understanding of how that fragmentation and the large number of these payers translates into patient access to specialty drugs.

HLM: Your study uncovered a lot of variation between payers. How is this explained?

Chambers: We did expect to see some variation across these payers that cover different patient populations. So, these beneficiaries may have different characteristics that may lead insurance companies to tailor their drug coverage to specific patient populations.

They also would negotiate separately with product manufacturers for the prices they pay for these drugs. Given that they negotiate independently, that may also influence the differences across those decisions.

And finally, insurance companies have differing abilities to pay. Some insurance companies can simply pay more than others and could provide more generous benefits.

Now, saying all that, I didn't expect there to be quite as much variation as we found. Only 16% of the drugs we sampled were covered by each of the payers. Said another way, 84% of the drugs had some differences in coverage, meaning that some payers restricted access to the products when other payers did not.

HLM: How does this play out on the doctor/patient level?

Chambers: It has a significant impact on that interaction because it suggests that whenever a patient presents to a clinician and the clinician is judging the patient's clinical presentation and the symptoms, that they are tailoring the patient's treatment not just to the symptoms and presentation, but also to the patient's insurance coverage. This suggests that the differences across these payers is having a significant impact on the interventions that these physicians are able to prescribe for these patients.

HLM: Is this a good thing, perhaps, on a macro-economic level?

Chambers: It depends upon how you look at it. In some ways it could be seen as a good thing if it was the case that these payers are making judgements consistent with their patient population and consistent with a thorough review of the available clinical evidence that supports the decision. If that was the case, then it is a good thing.

What we've found after reviewing thousands of these coverage policies over the past several years is that payers should be more transparent in how they make those decisions. Some payers will tell us more thoroughly than others the evidence and clinical trials that they based their decisions on. It would benefit patients and physicians if payers were more transparent because these decisions have such a significant impact on patients.

Also, if every payer covered the same drugs in the same way, maybe it would take longer to really understand how safe and effective some of these products are. By virtue of the fact that we do have different payers making different decisions, hopefully tailoring their decisions to their beneficiary populations, means that maybe we could have a faster learning curve to determine if these treatments work and most importantly for which patients they provide the most value.

HLM: How should these study findings be used?

Chambers: I'd like to advance the debate about transparency in decision-making. It'd be great to start a dialog about what types of evidence the payers require when making these decisions. A better understanding for how these decisions are made has the potential to expedite patient access to these drugs, meaning that product manufacturers can develop evidence that best meets payers' requirements. Without this transparency in decision making, it's unclear just what evidence these payers are basing their decisions on.

HLM: Was any insurance company particularly generous or stingy?

Chambers: The goal of this work isn't to draw attention to which payers are most restrictive or not. We can't factor for some of the factors that may influence how restrictive they are; things like how competitive a state is, or what the budget available to those payers is.

We did find some differences across the payers and Health Care Service Corp. was one of the more generous payers in the sample. Blue Cross Blue Shield of Michigan seem to be one of the payers that most often added restrictions in its coverage.

But again, our goal was not to identify individual payers and shame those payers, as it were. It was more to determine the differences across payers and what that might mean for patients.

John Commins is a senior editor at HealthLeaders.

Get the latest on healthcare leadership in your inbox.