By Henry Ehrlich
Some Facebook friends in food-allergy groups have been complaining that they still can’t get their insurance companies to pay for the new auto-injector, or can only get it at much higher cost than EpiPen. I decided to look into how insurers adopt new product and what they charge, so I called my friends at a not-for-profit HMO and spoke to their director of pharmacy.
He said that insurance companies are either “open formulary” or “closed formulary.” In an open formulary company, the clock for a new product starts typically as soon as it’s available—not when it’s FDA approved. At that point, the product will be offered on a higher, non-preferred co-pay tier than an established product until the Pharmacy and Therapeutics Committee has a chance to review it for safety, efficacy, and pricing. Assuming it’s equivalent to an existing product, reimbursement will be the same, and patients can make their choices on the basis of other features, although manufacturers may employ direct rebates to the insurance company or financial concessions to the consumer. The older, dominant company will probably have more price leeway.
In closed formulary companies, which include most private insurers, the
committee approves all reimbursements. Assuming that a new product is competitive on safety, efficacy, and price, they are in a good position to bargain on the basis of money. In the case of a dominant product they are in a position to negotiate large rebates from the manufacturer in return for exclusivity, or at least on a favored co-pay tier compared to the newcomer. The newcomer might give some financial concession to the consumer in the form of a savings card, which can be used to offset a significantly higher co-payment charged by the insurance plan, making them somewhat competitive. Or it can be used to offset some of the retail price if there is no reimbursement from the insurer, but that may not be enough, as when the consumer cost of Auvi-Q is $240.
We can see these dynamics at work in this information from Sanofi, maker of Auvi-Q:
Sanofi is offering a savings card. Most commercially insured patients who utilize the card will pay no more than $25 for their first two Auvi-Q prescriptions. Cash paying patients can receive up to $60 off their first two prescriptions of Auvi-Q. For details and exclusions, visit Auvi-Q.com.
For those patients without insurance coverage who cannot afford their prescriptions, Sanofi offers a patient assistance program, Sanofi Patient Connection. For more information visit, https://www.visitspconline.com/, or call 888-VISITSPC (1.888.847.4877) Monday thru Friday from 9 a.m. to 8 p.m. (eastern time).
Many thanks for the information (you know who you are), and may you never need to use your auto-injector, whatever brand it is.
Auvi-Q photo by AmazingandAtopic.com
EpiPen by Epipen.com