Benefit Design and Specialty Drug Use

Published in: Health Affairs, v. 25, no. 5, Sep. 2006, p. 1319-1331

by Dana P. Goldman, Geoffrey F. Joyce, Grant Lawless, William H. Crown, Vincent Willey

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In this paper the authors examine spending by privately insured patients with four conditions often treated with specialty drugs: cancer, kidney disease, rheumatoid arthritis, and multiple sclerosis. Despite having employer-sponsored health insurance, these patients face substantial risk for high out-of-pocket spending. In contrast to traditional pharmaceuticals, the authors find that specialty drug use is largely insensitive to cost sharing, with price elasticities ranging from 0.01 to 0.21. Given the expense of many specialty drugs, care management should focus on making sure that patients who will most benefit receive them. Once such patients are identified, it makes little economic sense to limit coverage.

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