BILL ANALYSIS Ó
AB 219
Page 1
ASSEMBLY THIRD READING
AB 219 (Perea)
As Introduced February 4, 2013
Majority vote
HEALTH 15-2 APPROPRIATIONS 15-0
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|Ayes:|Pan, Ammiano, Atkins, |Ayes:|Gatto, Harkey, Bigelow, |
| |Bonilla, Bonta, Chesbro, | |Bocanegra, Bradford, Ian |
| |Gomez, | |Calderon, Campos, Eggman, |
| |Roger Hernández, Rendon, | |Gomez, Hall, Holden, |
| |Maienschein, Mitchell, | |Linder, Pan, Quirk, |
| |Nazarian, Nestande, V. | |Ammiano |
| |Manuel Pérez, Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wagner, Wilk | | |
| | | | |
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SUMMARY : Requires health plan contracts and health insurance
policies that cover prescribed, orally administered anticancer
medications to limit an enrollee or insured's total cost share
to no more than $100 per filled prescription.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)According to the California Health Benefits Review Program
(CHBRP), the provisions of this bill would likely have a
negligible impact on the state because the programs affected,
the California Public Employees' Retirement System and
Medi-Cal, already provide coverage with cost-sharing below the
amounts in this bill.
2)This bill would have minor costs to the Department of Managed
Health Care and the Department of Insurance for plan filings.
COMMENTS : The author states that this bill is needed to ensure
that cancer patients who are prescribed oral anticancer
medications to treat their cancer can afford these treatments
when covered by their health plan or insurance. According to
the author, innovations in the pharmaceutical industry have
resulted in the routine availability of new oral pills that work
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better and have fewer side effects than older intravenous or
injectable medications. The author notes that oral anticancer
medications are covered as a pharmacy benefit by health plans or
insurance so the terms of coverage are different and can include
co-insurance instead of flat rate co-pay. The author maintains
that since oral drugs are new and currently often under patent,
they can be much more expensive than patients expect to pay for
a pill, with prices as high as $10,000 for a prescription,
meaning a patient responsible for a 30% co-insurance payment
could need to pay $3,000 for a single prescription of oral
anticancer medication. The author asserts that out-of-pocket
costs for oral anticancer medications are a de facto denial of
access and cites a 2010 study done by Prime Therapeutics, a
pharmacy benefit management company, which found one in six
cancer patients with high out-of-pocket costs abandons their
medication. Lastly, the author points out that 21 other states
have already passed legislation to address high out-of-pocket
costs for these treatments.
According to an analysis by CHBRP, oral anticancer medications
(usually pills) are used to treat frequently diagnosed cancers,
such as breast, lung, prostate, and colorectal cancers, and they
are also used for rare cancers, such as cancer of the adrenal
gland, cancer of the dermis layer of skin, and retinoblastoma
(an eye cancer).
CHBRP indicates that the roles of oral anticancer medications in
cancer treatment vary. Some oral anticancer medications are
used to reduce the likelihood of recurrence of cancer in
patients with early stage cancers who were previously treated
with surgery, radiation, and/or intravenous anticancer
medications, while others are taken on an ongoing basis to
prevent the growth of cancer cells. Still others are used to
treat metastatic cancers, recurrent cancers, or cancers that
cannot be surgically removed. Oral anticancer medications may
be used as "first-line" treatments for persons newly diagnosed
with cancer or as "second-line" treatments for persons who do
not respond to "first-line" treatments.
Although oral anticancer medications have been available for
many years, CHBRP notes that the number of oral anticancer
medications approved by the federal Food and Drug Administration
(FDA) has grown dramatically over the past decade. To date, the
FDA has approved 54 oral anticancer medications used to treat 50
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different types of cancer. According to CHBRP, approximately
100 oral anticancer medications are currently under development,
and only nine of the 54 oral anticancer medications approved by
the FDA have intravenous or injected equivalents. Only 11 of
the 54 approved by the FDA have generic equivalents.
According to CHBRP, coverage for anticancer medications can
differ in a number of ways, depending on provisions of a
person's health plan contract or health insurance policy.
Anticancer medications may be covered as pharmacy plan benefits
or as medical plan benefits, and most plans and insurers depend
on the dispensing site to determine which will be the form of
coverage. For example, intravenous anticancer medication, which
is usually provided in a hospital or a physician's office, is
generally covered as a medical benefit, while oral anticancer
pills dispensed by a pharmacy are usually covered as a pharmacy
benefit.
CHBRP notes that payers employ a host of strategies to promote
appropriate utilization and cost controls for both medical and
pharmacy benefits. These strategies include creation of
formularies; maximization of manufacturer rebates; quantity
restrictions; use of prior authorization; development of
clinical guidelines; and, implementation of patient cost
sharing, such as deductibles, coinsurance, and copayments. Cost
sharing for medications is frequently complicated by tiered
pricing in which plans and insurers assign drugs to tiers
(generic drugs in the lowest and very expensive drugs in the
highest) and apply varying copayments and coinsurance rates to
different tiers. As with cost sharing in general, the impact of
tiers (if any) depends on the specifics of a person's plan
contract or insurance policy.
Lastly, CHBRP states that the variety of cost sharing provisions
currently used in California makes it difficult to generalize
about the ways in which a cancer patient may be required to pay
out-of-pocket for any anticancer medication. Fixed copayments
are a common form of cost sharing for medications delivered
through a pharmacy. However, some carrier contracts and
policies require coinsurance for one or more medications or the
terms of coverage may or may not include a deductible. Coverage
of medications delivered as medical benefits also varies.
CHBRP was created in response to AB 1996 (Thomson), Chapter 795,
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Statutes of 2002, which requests the University of California to
assess legislation proposing a mandated benefit or service, and
prepare a written analysis with relevant data on the public
health, medical, and economic impact of proposed health plan and
health insurance benefit mandate legislation.
The sponsors of this bill, Susan B. Komen for the Cure
California Affiliates and Carrie's TOUCH, Inc., state that this
bill will make oral cancer chemotherapy treatments more
affordable and therefore more accessible to cancer patients in
California. Supporters, representing patient advocacy groups,
providers, and biomedical research companies, among others,
point to research showing that a $100 cap on cost-sharing
requirements for orally administered anticancer medications per
filled prescription increases patient compliance with their
doctor prescribed therapy and reduces the likelihood of
treatment abandonment that is associated with higher
cost-sharing amounts. The American Cancer Society Cancer Action
Network and the Leukemia and Lymphoma Society note in support
that, typically, orally administered chemotherapy is covered
under a health plan's pharmacy benefit and oral chemotherapy
medications are often classified in the highest tier of a plan's
cost-sharing system. They maintain that this requires patients
to pay a high percentage of the drug's cost and potentially
results in thousands of dollars in out-of-pocket costs each
month. The Association of Northern California Oncologists
writes in support that the emergence of safe, effective, orally
administered anticancer medications has dramatically improved
the quality of life for cancer patients and this bill will make
these medicines, which are often more advanced therapies with
fewer side effects than traditional chemotherapy, more
affordable and accessible. Lastly, biomedical research
companies, such as the California Healthcare Institute and
BIOCOM, add that remarkable breakthroughs in orally administered
cancer treatments are only effective when patients have access
to them.
Health plans and health insurers object to this bill because
they argue that it threatens the efforts of all health care
stakeholders to provide consumers with meaningful health care
choices and affordable coverage options. America's Health
Insurance Plans notes in opposition that cost sharing is a
crucial part of controlling health care costs and setting an
arbitrary cost sharing limit for those who are using oral
chemotherapy medication means more of the cost of these
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expensive medications will need to be borne by other enrollees
and insureds in the form of higher premiums. The California
Association of Health Plans (CAHP) contends that this bill does
nothing to control the high underlying cost of pharmaceuticals,
nor does it do anything to encourage drug makers to be more
efficient and lower costs. CAHP further believes that the
Affordable Care Act provides a more comprehensive solution to
lowering consumer costs without favoring one drug class over
another and still allows for appropriate utilization and benefit
management by health plans. Blue Shield of California adds in
opposition that this bill attempts to carve out special cost
sharing rules for a particular line of pharmaceutical company
drugs and will only exacerbate the affordability crisis by
giving special treatment to certain drug company products.
Analysis Prepared by : Cassie Royce / HEALTH / (916) 319-2097
FN: 0000215