Employer Plans View Product Coverage Very Differently from PBMs

Employers’ benefit coverage decisions and the impact those decisions have on the market for rare disease / orphan drugs are a growing concern for biopharma companies.

The need for biopharma companies to have a clear understanding of the short and long-term of the employer market has never been greater. This understanding is necessary to identify and understand payers’ current and anticipated management methods for orphan drugs and the impact those decisions will have on their drugs.

Access Market Intelligence (AMI), in collaboration with EPIC (Employer-Provider Interface Council), a non-profit council of the Hospital Quality Foundation (HQF, 501c3), works with biopharma companies and employers to gain a deeper understanding of the market landscape.

Today, orphan drugs and related therapies are nearly half of the “specialty” drugs that achieve FDA expedited or standard approval. However, because of high costs and low patient volume, concerns are raised by plan sponsors about access, pricing, distribution contracts, and value.

To control costs, employers are increasingly using various carve-outs to eliminate coverage from the employer’s health benefits for drugs used in rare diseases.

Biopharma manufacturers need to understand that this trend will only increase in the future.

Several innovative financing mechanisms for rare disease programs have been discussed, developed, or introduced for commercial or employer plans to consider adopting, but the uptake has not been strong, nor did they fully address the financial risk.

Rare and orphan disease therapies are generally covered in medical plans so there is additional scrutiny in addition to coverage considerations for supplemental drugs under the pharmacy benefit. Patients, providers and plans are aggressively seeking a better solution.

AMI and EPIC collaborate with biopharma companies to help provide a better understanding of the commercial insured employer market landscape, as well as the factors that drive the medical and pharmacy benefit coverage decisions impacting access for patient use.