BILL ANALYSIS                                                                                                                                                                                                    






                                 SENATE HEALTH
                               COMMITTEE ANALYSIS
                        Senator Elaine K. Alquist, Chair


          BILL NO:       SB 961                                       
          S
          AUTHOR:        Wright                                       
          B
          AMENDED:       March 9, 2010                               
          HEARING DATE:  April 21, 2010                               
          9
          CONSULTANT:                                                 
          6
          Chan-Sawin/                                                 
          1              
                                     SUBJECT

                      Health care coverage: cancer treatment
                                         
                                         
                                     SUMMARY  

          Prohibits health care service plan contracts and health  
          insurance policies, which provide coverage for oral cancer  
          medications, from charging copayments (copays) for the  
          medication in excess of 200 percent of the lowest copayment  
          required by the plan or policy for brand name medications.   
          Exempts the Public Employees' Retirement System plans.

                             CHANGES TO EXISTING LAW  

          Existing law:
          Existing law provides for the regulation of health care  
          service plans by the Department of Managed Health Care  
          (DMHC) and regulation of disability insurers who sell  
          health insurance by the California Department of Insurance  
          (CDI). 
          
          Existing law requires health care service plan contracts  
          and health insurance policies to provide coverage for all  
          generally medically accepted cancer screening tests and  
          requires those plans and policies to also provide coverage  
          for the treatment of breast cancer. 

          Existing law imposes various requirements on contracts and  
                                                         Continued---



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          policies that cover prescription drug benefits, such as a  
          requirement to cover "off-label" uses and a requirement to  
          cover previously prescribed drugs, as specified. 

          Existing law authorizes DMHC to regulate the provision of  
          medically necessary prescription drug benefits by a health  
          care service plan to the extent that the plan provides  
          coverage for those benefits.  Existing regulation requires  
          health plans providing outpatient prescription drugs to  
          provide all medically necessary prescription drugs, except  
          as specified in that regulation.  

          This bill:
          This bill prohibits health care service plan contracts and  
          health insurance policies, which provide coverage for oral  
          cancer medications, from charging copayments for oral  
          cancer medications above 200 percent of the lowest  
          copayment required by the plan or policy for brand name  
          medications on the plan or policy's formulary.  

          The bill specifically clarifies that it does not: 1)  
          prohibit a plan or policy from requiring prior approval or  
          authorization for the use of oral cancer medications, or 2)  
          require a plan or policy to provide coverage for any  
          additional medication than already required by law.

          This bill exempts the California Public Employees'  
          Retirement System (CalPERS) plans or policies.

                                  FISCAL IMPACT  

          This bill has not been analyzed by a fiscal committee.


                            BACKGROUND AND DISCUSSION  

          According to the author, this bill is intended to require  
          health insurers that cover cancer medications to cap  
          out-of-pocket costs for orally administered cancer drugs.   
          Patient cost-sharing for oral cancer drugs covered under a  
          plan's pharmacy benefit can be significantly higher than  
          comparable intravenous drugs that are covered under the  
          medical benefit.  This bill would ensure copays or other  
          charges for oral medications aren't at a level making them  
          inaccessible to patients.





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          Cost sharing arrangements 
          Cost sharing arrangements used by health plans and health  
          insurers that affect patient's out-of-pocket costs include  
          copays, coinsurance, deductibles, out-of-pocket maximums,  
          and annual or lifetime dollar limitations.  For oral  
          chemotherapy medications, the two most commonly used cost  
          sharing arrangements are copays and coinsurance. 

          Copays are generally defined by health plans, health  
          insurers, DMHC, and CDI as flat dollar amounts an enrollee  
          pays, out-of-pocket, at the time of receiving a health care  
          service or when paying for a prescription (after any  
          applicable deductible).  For example, enrollees may be  
          asked to provide copays of $15 for each primary care  
          physician visit, $25 for a specialist visit, and $20 for  
          each brand-name prescription.  

          Coinsurance is generally defined as a set percentage of the  
          cost of care, where the enrollee or insured will pay a set  
          percentage of the covered costs, after the deductible has  
          been paid.  For instance, under an 80/20 coinsurance, for a  
          $100 prescription, the plan pays $80 and the enrollee pays  
          the remaining $20.  Coinsurance arrangements range from  
          70/30 to 90/10.   

          Cost of oral chemotherapy medications
          According to the federal Department of Health and Human  
          Services, spending on prescription drugs is expected to  
          increase from $216.7 billion in 2008 to $515.7 billion in  
          2017,  a 138 percent increase in 11 years.   Certain drugs,  
          including some oral cancer medications can be very  
          expensive, topping nearly $30,000 per prescription per  
          month.  A 2008 report by the National Comprehensive Cancer  
          Network, an alliance of 21 of the world's leading cancer  
          centers, estimates that over 100 oral cancer medications  
          are now in the drug development pipeline.

          California Health Benefits Review Program analysis
          Pursuant to AB 1996 (Thomson), Chapter 795, Statutes of  
          2002, and SB 1704 (Kuehl), Chapter 684, Statutes of 2006,  
          the University of California is requested to assess  
          legislation proposing a mandated benefit or service, or the  
          repeal of a mandated benefit or service, through the  
          California Health Benefits Review Program (CHBRP).  CHBRP  
          prepares a written analysis of the public health, medical,  
          and economic impacts of such measures.   The following are  




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          highlights from the CHBRP analysis:  

          Federal health care reform
          This March, the federal government enacted the federal  
          health reform, which includes many provisions that go into  
          effect by 2014, and beyond, which will make significant  
          changes to the California health insurance market and its  
          regulatory environment.  For example, the law would  
          establish a state-based health insurance exchange, to offer  
          coverage meeting minimum benefit standards for the small  
          group and individual market.  In addition, federal health  
          reform includes prescriptions as a general category that is  
          included in the "essential health benefits package."  It is  
          not clear what type of prescriptions will be covered as an  
          essential benefit, and if oral chemotherapy medications  
          will be included.  How these provisions are implemented in  
          California will depend on additional regulations and  
          guidance from federal agencies, as well as statutory and  
          regulatory actions taken by the state.  

          Federal health reform also includes provisions that are  
          enacted by September 2010, which would expand the number of  
          Californians with insurance, such as requiring coverage for  
          dependents up to age 26.  This would decrease the number of  
          uninsured and increase the number of people impacted by  
          this mandate.  The federal health reform also bans the use  
          of lifetime limits on benefits, and restricts the use of  
          annual limits on essential benefits, by health plans and  
          health insurers beginning October 2010.  The CHBRP analysis  
          does not reflect the impact from implementation of federal  
          health reform requirements.

          Coverage variations
          Prescription medications may be covered through one of two  
          types of benefits on an enrollee's plan or contract:  1)  
          medical benefits; or, 2) an outpatient pharmacy benefit, if  
          the contract or policy includes an outpatient pharmacy  
          benefit.  Not all contracts or policies have outpatient  
          pharmacy benefits, but all have medical benefits.  

          Medical benefits typically cover medications consumed  
          during: 1) an inpatient hospital stay; or, 2) a visit to a  
          provider's office, as are many injected and intravenous  
          chemotherapy medications.  However, oral chemotherapy  
          medications are typically covered through an outpatient  
          pharmacy benefit and not through a medical benefit.




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          Cost sharing arrangements found in health insurance in  
          California differ significantly from what is present in  
          other states, or available nationally.  According to a 2009  
          California HealthCare Foundation report,  for Californians  
          who receive coverage through their employer, flat dollar  
          copays are more common than four-tier structures for  
          pharmaceutical benefit cost sharing, and cost sharing for  
          fourth tier "specialty drugs" (where oral chemotherapy  
          medications are often placed) may be significantly higher.    
          Thus, many Californians may not be exposed to the high  
          levels of cost sharing for oral chemotherapy medications,  
          either through coinsurance or through fourth tier copays,  
          compared to what have been reported in other states.   
           Currently, 81.5 percent of enrollees in plans and policies  
          subject to this mandate have copays in the $1-49 range  .  At  
          this time, 0.6% of enrollees are subject to copays between  
          $50-99, and no enrollee is subject to copays above $100.   
          The rest of enrollees either are in plans with:

                 No outpatient pharmacy benefits (2.7 percent).

                 Outpatient pharmacy benefits that only include  
               generic drugs (2.4 percent).  For these plans, there  
               is no brand name copay to use as a benchmark.

                 No patient cost sharing is required (2.3 percent).

                 Other forms of cost-sharing, but not copays (10.4  
               percent).

          Furthermore, approximately 87 percent of Californians with  
          health insurance that would be impacted by this bill are  
          enrolled in DMHC-regulated plans.  These plans are subject  
          to DMHC reviews, including a review of proposed cost  
          sharing arrangements that requires that benefits not be  
          subject to "exclusion, exception, reduction, deductible, or  
          copay that renders the benefit illusory."  For example, for  
          outpatient prescription drug benefits, DMHC limits cost  
          sharing to 50 percent of the cost of the drug to the plan,  
          and specifies how such costs are to be calculated.  

          No current California mandate requires coverage of  
          prescription medications, and no mandates currently  
          specifies the terms of copays for oral chemotherapy  
          medications, although DMHC, as noted above, limits cost  




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          sharing for all prescription drug benefits. 

          Five other states have mandates relating to cost sharing  
          for oral chemotherapy medications, including Oregon,  
          Vermont, Indiana, Iowa, and Hawaii.  None are equivalent to  
          SB 961.  There is evidence that suggests a concerted effort  
          across states to bring parity to cost sharing arrangements  
          used for outpatient oral chemotherapy medications and  
          inpatient chemotherapy delivered intravenously.
           
           Assumptions
          This bill would, on a policy-by-policy and plan  
          contract-by-plan contract basis, limit flat dollar copays  
          for oral chemotherapy medications.  CHBRP assumes that the  
          bill would affect flat dollar copays and not other forms of  
          cost sharing.  The analysis also assumes that the cost  
          sharing provisions current in plan contracts and policies  
          would remain constant, so that the percentage of enrollees  
          with coverage for oral chemotherapy medications subject to  
          flat dollar copays would remain stable. However,  it is  
          possible that plans and policies could respond by  
          increasing the percentage of enrollees whose benefit  
          coverage is subject to coinsurance, which is not affected  
          by the mandate.  

          SB 961 would apply to a large number of oral chemotherapy  
          medications for a wide range of cancers, making a  
          systematic review of the literature on the effectiveness of  
          all of them was not feasible for the CHBRP analysis.  
          Instead, CHBRP summarized general, descriptive information  
          about these medications. 
          
          For this analysis, CHBRP compared the lowest copay paid for  
          any brand name medication by enrollees in the plan or  
          policy (defined as "benchmark copay") with copays paid for  
          brand name oral chemotherapy medications.   CHBRP focused on  
          brand name oral chemotherapy medications because generic  
          oral chemotherapy medications are usually subject to copays  
          that would not exceed the relevant benchmark.   Although  
          there are very few generics currently available, and there  
          is limited substitutability for these medications, this may  
          change in the future.   The analysis also assumes, post  
          mandate, that amounts exceeding 200 percent of the relevant  
          benchmark copay would shift from patients to health plans  
          and insurers.  





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          CHBRP modeled the financial impact of the mandate as a  
          shift in cost sharing for brand name oral chemotherapy  
          medications covered through outpatient pharmacy benefits  
          from the enrollee to the health plan or health insurer.  It  
          held other benefits, under which oral chemotherapy  
          medications could be covered constant (e.g., medical  
          benefits covering oral chemotherapy medications delivered  
          during inpatient care or at a providers' office).  

          Population affected by this mandate
          Approximately 19.5 million (51 percent) Californians have  
          health insurance that may be subject to a health benefit  
          mandate law.  The rest of the population are either  
          uninsured, or have insurance that is not subject to health  
          insurance benefit mandate laws.  Of the 19.5 million,  18.7  
          million, or 49 percent, of Californians have coverage for  
          pharmacy benefits.   The breakdown for enrollees with  
          outpatient pharmacy benefit coverage is: 

                  82.1 percent (15,331,000 people) have benefit  
               coverage subject to copays.  Some may also be subject  
               to additional cost sharing requirements, such as  
               deductibles or annual/lifetime caps. 

                  10.4 percent have benefit coverage that does not  
               include copays, but are subject to other cost sharing  
               arrangements, such as coinsurance.   Some may also be  
               subject to additional cost sharing requirements, such  
               as deductibles or annual/lifetime caps. 

                  2.3 percent have benefit coverage that is not  
               subject to any cost sharing.

                 2.4 percent have benefit coverage for generic  
               medications only.   Without a "lowest copay for a brand  
               name medication," there is no benchmark that such a  
               plan could exceed.

          As written, this mandate would only impact the 15.3 million  
          people subject to copays for outpatient pharmacy benefit  
          coverage.  

          Medical effectiveness
          All oral chemotherapy medications must be approved by the  
          U.S. Food and Drug Administration (FDA) before they can be  
          marketed or sold in the United States.  To date, the FDA  




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          has approved 40 oral chemotherapy medications that are used  
          to treat 54 different types of cancer, and approximately  
          100 new oral chemotherapy medications are currently under  
          development.  Oral chemotherapy medications have been  
          available for decades, but the number of such medications  
          has grown dramatically over the past decade, and more oral  
          chemotherapy medications are being developed.  

           Only 11 of the 40 oral chemotherapy medications approved by  
          the FDA have intravenously administered or injectable  
          substitutes, and only nine of the oral chemotherapy  
          medications approved by the FDA have generic equivalents.    
          CHBRP's review indicates one medication for which there is  
          a generic equivalent, tamoxifen, which will account for  
          24.1 percent of prescriptions for oral chemotherapy  
          medications filled in California in 2010. 

           The use of oral chemotherapy medications in cancer  
          treatment vary,  and include pre- and post-surgical  
          treatment, concurrent treatment with radiation, first-line  
          treatment to kill or retard the growth of cancer cells,  
          second-line treatment of cancers that do not respond to  
          first-line treatments, treatment of early stage cancers,  
          advanced or metastatic cancers, recurrent cancers, cancers  
          that cannot be surgically removed, and prevention of cancer  
          recurrence in persons treated for early stage disease.   
           Oral chemotherapy medications are used alone or in  
          combination with other oral, intravenously administered, or  
          injected chemotherapy medications  , depending on the cancer  
          they are being used treat and the stage at which the cancer  
          is diagnosed.  

          The outcome of cancer treatment, including oral  
          chemotherapy medications, varies with the stage at which  
          cancer is diagnosed.   For early stage cancers, use of oral  
          chemotherapy agents and other treatments can enable a  
          person to live cancer free for many years.  For advanced  
          and metastatic cancers, treatment often cannot reverse the  
          disease and may only prolong life for a few months. 
          
          Impact on utilization 
          For enrollees with health insurance subject to the mandate,  
          CHBRP estimates that 4.2 enrollees per 1,000 enrollees use  
          outpatient oral chemotherapy medications during a year.   
          Also, 3.4 enrollees per 1,000 enrollees use brand name oral  
          chemotherapy medications that are subject to copays during  




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          a year.  CHBRP estimates  no measurable change in  
          utilization, because the bill does not change the current  
          number of enrollees with coverage for oral chemotherapy  
          medications.   

          Although CHBRP estimates that the mandate will reduce  
          patients' average copays by about $0.20 per prescription  
          (from $16.78 to $16.58) for brand name oral chemotherapy  
          medications that are subject to copays,  this minor  
          reduction in cost sharing will have little impact on  
          patient demand  .  Cancer is a life-threatening illness;  
          consequently, patients will generally comply with  
          prescribed treatment regimens.   Oncologists' prescribing  
          decisions seem unlikely to change  , as there is little  
          evidence that oncologists base their decisions on the small  
          differences in patient cost sharing requirements. 

          Impact on cost 
           The total aggregated statewide cost for this mandate is  
          estimated to be $3,000.  The increase would be mainly due to  
          the administrative costs associated with implementing this  
          mandate.   The CHBRP analysis projects that this bill would  
          not result in an expansion of coverage; rather it changes  
          the way out-of-pocket costs are structured.  

           The major impact of the mandate would be a small cost shift  
          of approximately $29,000 in out-of-pocket expenses for oral  
          chemotherapy medication costs from patients to health plans  
          and insurers,  estimated to be $0.20 per prescription for  
          covered brand name oral chemotherapy medications subject to  
          copays.  Currently, outpatient oral chemotherapy  
          medications range in their aggregated average total costs  
          from $29.64 to $8,580.96 per prescription.  Often, cancer  
          patients are on more than one drug at any given time.

          Currently, less than 1 percent of enrollees with outpatient  
          pharmacy benefit coverage, that are subject to copays, for  
          both brand name and generic oral chemotherapy medications,  
          have copays of $50 and above per prescription.   The CHBRP  
          analysis indicates a post-mandate copay shifted from  
          patients to plans and insurers ranging from $0 to $65 per  
          prescription.  

          CHBRP also indicates the mandate is estimated to increase  
          premiums as follows: 





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                 Statewide, total aggregated health insurance  
                premiums paid by private employers are estimated to  
               increase by approximately $24,000, or 0.0001 percent.  

                 Statewide, total aggregated enrollee contributions  
               toward  premiums for group health insurance regulated  
               by DMHC or CDI are estimated to increase by  
               approximately $6,000.  

                 Statewide, total aggregated premiums paid by  
                purchasers of individual market health insurance are  
               estimated to increase by approximately $2,000  . 

          DMHC-regulated health plans for: 1) Medi-Cal health  
          maintenance organization enrollees; and, by 2) the Managed  
          Risk Medical Insurance Board for beneficiaries of the  
          Healthy Families program already provide coverage for oral  
          chemotherapy medication - these plans would not be expected  
          to see any changes in patient expenses or premium. 

          Impact on public health
           SB 961 is not expected to affect utilization of oral  
          chemotherapy medications; therefore, no impacts on health  
          outcomes is expected.   A projected decrease in patient  
          out-of-pocket costs for oral chemotherapy medications by an  
          average of $0.20 per brand prescription is small, compared  
          to the other forms of cost sharing cancer patients may  
          face, including deductibles and/or annual/lifetime caps,  
          and other financial burdens facing cancer patients, such as  
          lost wages.  For example:

                 Two-thirds of the prescriptions written for oral  
               chemotherapy medications are written for medications  
               used to treat breast cancer.  In general,  
               out-of-pocket expenditures and lost income for women  
               with breast cancer can be significant.  However, the  
               financial impact on individual patients of this bill  
               is so small, it would have little to no effect on  
               these financial burdens. 

                 Although cancer is a substantial cause of premature  
               mortality in California, SB 961 is not estimated to  
               change the utilization of oral chemotherapy  
               medications or result in a corresponding reduction in  
               the premature death or economic loss associated with  
               cancer. 




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          Related bills
          SB 161 (Wright) of 2009 would have required a health plan  
          contract or health insurance policy that provides coverage  
          for cancer chemotherapy treatment to provide coverage for a  
          prescribed, orally administered cancer medication on a  
                                                                              basis no less favorable than intravenously administered or  
          injected cancer medications.  Vetoed by the Governor.
          
          Arguments in support
          The American Cancer Society supports SB 961 because  
          patients using oral chemotherapy generally experience  
          milder side effects.  Many of these oral chemotherapy  
          treatments do not have intravenous counterparts, making the  
          need to ensure access to them critical.  

          The California Healthcare Institute (CHI), an advocacy  
          organization of biotechnology companies and academic  
          research institutions, supports this bill, stating that CHI  
          member companies are at the heart of biomedical research  
          that has lead to discoveries to treat diabetic neuropathy  
          and other complications from diabetes.  These treatments,  
          when administered after early detection, can prevent  
          amputations.  CHI further points out that these treatments  
          are only effective when patients have access to them.

          The California Medical Association (CMA) supports the bill,  
          stating that oral chemotherapy improves the quality of life  
          for cancer patients, such as producing milder side effects,  
          and avoiding the need for transportation back and forth  
          from chemotherapy appointments.  CMA further states that,  
          because chemotherapy is administered in different ways and  
          the choice of delivery depends on many factors, SB 961  
          would ease some of the difficult choices cancer patients  
          face by protecting patient choice when making treatment  
          decisions.
          
          The Disability Rights Legal Center and the Susan G. Komen  
          Foundation both support the bill, stating that there is a  
          significant difference in the amount cancer patients must  
          pay out of pocket for an oral drug instead of an  
          intravenous drug.  This is echoed by the International  
          Myeloma Foundation, which argues that insurance policies  
          discourage the use of oral drugs when they are medically  
          appropriate.  The Oncology Nursing Society writes in  
          support, stating that many oral anti-cancer drugs have  




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          fewer side effects than infused therapies.

          Arguments in opposition
          Anthem Blue Cross writes in opposition, stating that SB 961  
          does not do anything to stem the increase of prescription  
          drugs.  Rather it sets the rate for one class of drugs,  
          thereby creating an unequal benefit category that  
          artificially sets rates for oral chemotherapy medications  
          lower without requiring manufacturers to charge less for  
          these high cost drugs.  Anthem Blue Cross further states  
          that these costs must be borne somewhere, with the most  
          likely result being higher overall premium costs for  
          employers and consumers.  This legislation could also set a  
          precedent to limit insurers' ability to manage care and  
          provide best value to members.  

          The Association of California Life and Health Insurance  
          Companies (ACLHIC) opposes this bill and points out that,  
          with health insurers poised to implement federal health  
          reform, one of the most expansive pieces of health care  
          legislation at the federal level, SB 961 is unnecessary and  
          untimely.

          Blue Shield of California opposes the bill, arguing that  
          carving out one type of medication from the rest of a  
          health plan's pharmacy benefits is not good public policy.   
          If enacted, Blue Shield believes that pharmaceutical  
          companies will continue to pursue legislation that  
          guarantees government set retail rates for their most  
          expensive drugs.

          The California Association of Health Plans (CAHP) opposes  
          the bill, stating that the bill takes an unprecedented step  
          in micromanaging the cost management strategies for  
          expensive medications.  These strategies limit a health  
          plan's flexibility to consider a drug's side effects and  
          relative cost.  CAHP further states that the bill does  
          nothing to stem the rising cost of prescription drugs while  
          severely weakening drug management as it creates a special  
          benefit category that steers consumers away from medically  
          equivalent and lower cost alternatives.  CAHP states that  
          consumers are already protected under current law from  
          "illusory" drug benefits, as the Knox-Keene Act gives DMHC  
          the authority to object to any copay amount for drugs.  

          The California Chamber of Commerce (CalChamber) opposes  




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          this bill because it will increase health care premiums by  
          limiting copays for one type of pharmaceutical, and it is  
          currently unclear what the impacts of federal health care  
          reform will be on prescription drug coverage.  Furthermore,  
          CalChamber points out that the bill exempts CalPERS in  
          order to keep costs from rising for CalPERS members while  
          imposing these costs on the private market.  CalChamber  
          argues that if this is such an important expansion of  
          benefits, it makes no sense that public employees are  
          exempt, and mandating benefits at a time when the state  
          still struggles through an economic crisis could further  
          exacerbate California's budget crisis.

          Health Net writes in opposition, stating that this bill  
          creates a unique new formulary tier for just one class of  
          drugs.  While anti-cancer medications can be expensive,  
          where one prescription can cost upwards of $10,000, they  
          are not unique in this regard.  Health Net believes that if  
          SB 961 is enacted into law, it will create the incentive  
          for other classes of drugs to seek the same preferential  
          treatment.  Ultimately these costs must be passed onto  
          consumers.  Furthermore, Health Net points out that cost  
          sharing for expensive oral anti-cancer drugs is not unique  
          to commercial plans and insurers.  Government payers also  
          have a substantial share of cost for oral chemotherapy  
          medication.  Mandates like SB 961 only make health care  
          coverage more expensive.  Health Net also points out that  
          if this is a good policy for those enrolled in the private  
          sector, that these same provisions should be extended to  
          other enrollees and insureds covered by the state.

          Medco Health Solutions, a pharmacy benefits management  
          company, opposes the bill, stating that the bill would  
          significantly increase the cost of prescription drug care  
          in California, due to imposed cost sharing.  Medco believes  
          the unintended consequence of the bill would create a  
          perverse incentive -- by limiting insurers' ability to  
          increase cost sharing on a particular (and often time  
          expensive) drug, this forces an employer or plan to choose  
          between either increasing premiums or curtailing drug  
          benefits.  
          

                                     COMMENTS
                                         
        1.Health plan and health insurer current use of copays for  




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          oral cancer medication is restrained.  CHBRP's analysis of  
          outpatient pharmacy benefit design by market segment shows  
          that, of the health plans and health insurers providing  
          outpatient coverage for brand name and oral chemotherapy  
          medications, 2.3 percent require no cost sharing and 81.5  
          percent have copays ranging from $1-49.  Only 0.6 percent  
          had copays between $50-99, and none had copays for oral  
          chemotherapy medications above $100.  The other 10.4  
          percent of insurers used other forms of cost sharing, which  
          are not addressed by this bill.  This data indicates  
          limited current use of high copays by California health  
          plans and health insurers. 

        2.Other forms of cost sharing.  Coverage for prescriptions  
          may be subject to additional cost sharing, such as a  
          deductible, or may be subject to a different form of cost  
          sharing, such as coinsurance.  Although unlikely given  
          current use of other forms of cost-sharing, this bill may  
          have the unintended consequence of health plans and health  
          insurers shifting cost sharing arrangements from copays to  
          coinsurance.  Given that the author's intent is to limit  
          out-of-pocket costs for patients, the author may wish to  
          take amendments that address use of coinsurance and other  
          forms of cost sharing.  If this is to occur, it is likely  
          that another CHBRP analysis will be needed as the  
          underlying cost assumptions of the current CHBRP analysis  
          will have changed. 
          
        3.Copay is not defined.  Copayments are not currently defined  
          in statute.  As such, it may be interpreted beyond a flat  
          dollar amount to any amount of payment rendered by the  
          enrollee or insured, including coinsurance.  The author may  
          wish to define copays as "a flat dollar amount an enrollee  
          pays, out-of-pocket, at the time of receiving a health care  
          service or when paying for a prescription, after any  
          applicable deductible," and that it cannot be construed to  
          include other forms of cost sharing.  
          
        4.Bill does not distinguish between generics versus brand  
          name. There are covered generics, as well as brand name,  
          oral chemotherapy medications.  This bill does not make  
          distinctions between generic and brand name oral  
          chemotherapy medications.  Generic versions of oral  
          chemotherapy could potentially be significantly cheaper  
          than their brand name alternatives.  This bill may have the  
          unintended consequence of artificial selection for brand  




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          name oral chemotherapy medications vs. generic options.   
          The author may wish to consider clarifying amendments  
          addressing if his intent is to remove health plans' and  
          health insurers' ability to provide differential  
          cost-sharing between generic and brand name oral  
          chemotherapy medications.  
          
        5.Setting precedence.  This bill sets precedence for capping  
          a certain type of cost-sharing for a particular subset of  
          prescription medication.  It also sets a precedent in  
          giving preferential treatment to certain types of  
          prescription medications.  As these medications are  
          increasingly expensive and unaffordable for most Americans,  
          there is a need for a larger policy debate regarding the  
          balance between accessibility to life-saving medications,  
          particularly during end-of-life, and cost containment in  
          the health care system to ensure affordability of care.
          
                                    POSITIONS  

          Support:American Cancer Society
                 California Communities United Institute
                 California Healthcare Institute (CHI)
                 California Medical Association
                 Disability Rights Legal Center
                 International Myeloma Foundation (IMF)
                 Leukemia & Lymphoma Society
                 Oncology Nursing Society
                 Susan G. Komen for the Cure

          Oppose:Anthem Blue Cross 
                 Association of California Life and Health Insurance  
          Companies (ACLHIC)
                 Blue Shield of California 
                 California Association of Health Plans
                 California Chamber of Commerce
                 Health Net
                 Medco Health Solutions, Inc.
                 

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