Summary

Recent increases in prescription drug costs have been fueled in part by the high and rising cost of specialty prescription drugs. Specialty prescription drugs are typically used to treat chronic or life-threatening conditions, such as multiple sclerosis and cancer, for which few other treatment options exist. The drugs typically have few competitors or generic alternatives and may require frequent dosage adjustment, special storage, patient education, or special methods of administration, such as by injection. Costs for specialty prescription drugs are usually high, typically ranging from $1,200 to $40,000 for a 30-day supply. Health plans--including those participating in the Federal Employees Health Benefits Program (FEHBP), which covers nearly 8 million federal employees, dependents, and retirees-- provide coverage for many specialty drugs. Enrollees may be required to pay a portion of specialty drug costs through a copayment--a flat dollar amount--or coinsurance--a percentage share of the drug's actual costs. To manage the high and rising costs of these drugs, some health plans have begun to require enrollees to contribute a greater share of their costs, such as by increasing the use of coinsurance. Congress asked us to examine the costs that FEHBP enrollees may incur for specialty prescription drugs. In this report we describe cost-sharing requirements and limits for specialty drugs covered by FEHBP plans.

Enrollees in FEHBP plans are subject to varying cost-sharing requirements for the 18 specialty drugs. More than 6.6 million of the nearly 7.8 million enrollees in the plans we reviewed (86 percent) are generally subject to copayments that limit enrollee costs to about $55 on average for a 30-day supply of the drugs. Nearly 900,000 enrollees (11 percent) are subject to coinsurance for more than 1 of the 18 specialty drugs, which requires the enrollees to pay on average nearly 31 percent of the cost of the drugs. About 700,000 of the enrollees subject to coinsurance are in plans requiring it for all 18 of the drugs. Enrollees' coinsurance costs for specialty drugs are typically limited by per prescription dollar maximums or annual out-of-pocket limits. Depending on the plan, these varying requirements can result in a wide range of costs for enrollees for the same drug. For example, we estimate that an enrollee taking the multiple sclerosis drug Betaseron for a year could pay $420 if subject to a copayment, $2,400 if subject to a coinsurance with a per prescription dollar maximum, or $6,000 if subject to a coinsurance with an annual out-of-pocket maximum.