Off-Label Prescription Drugs
How Insurance Companies Control Medical Treatment
With the increasing costs of specialized drugs, some insurance companies are refusing to pay for drugs prescribed for off-label conditions--what this means for you.
Responding to rising costs of specialty drugs, some medical insurers are making headlines this month by implementing new policies limiting their coverage of certain therapies. In general, these insurers are only paying for FDA-approved drugs and are no longer paying for drugs prescribed off-label, that is for conditions in which the drug has not been tested for efficacy in formal clinical trials.
Examples of drugs prescribed off-label in autoimmune diseases include low dose naltrexone (LDN), which is widely used for multiple sclerosis, rheumatoid arthritis, Behcet’s disease, Crohn’s disease, and a variety of other autoimmune conditions, and rituximab, which is used off-label for systemic lupus erythematosus (SLE).
How This Affects Us
Although specialty pharmaceuticals, such as Genetech's Avastin, are designed to treat a small number of patients, they represent one of the fastest-growing portions of domestic health spending, increasing by 21 percent over the past year and accounting for one-fourth of all pharmaceutical expenditures in 2006. For insurance companies, this represents a major loss in profit.
Health policy analysts caution that the benefits off-label drugs offer in conditions for which other drugs have failed will be seriously compromised by these new insurance regulations. Furthermore, off-label drugs such as naltrexone, which is relatively inexpensive at less than $100 per month, would be put in the same (unapproved for payment) category as Genetech’s Avastin (bevacizumab), which typically costs $4,400 per month. Avastin is approved for lung and colorectal cancers, but not for brain tumors because of limited evidence validating efficacy despite promising results in patients.
What Insurance Companies Say
Responding in a recent article published in the Wall Street Journal, insurance companies say they must limit use of off-label drugs to help control overall health costs, which they report continue to rise faster than inflation. As it stands, insurance coverage limitations are totally arbitrary with changes to coverage implemented directly correlating to price increases in certain medications. A Morgan Stanley analyst noted that as insurers decline coverage for off-label indications, there’s an unprecedented “elasticity in demand” in the specialty drug market.
Healthy People 2010
One of the goals of the federal initiative Healthy People 2010 is to provide equal health services to all people in the United States regardless of their socieconomic status by 2010. However, with these new provisions, those patients who can afford the cost will still receive off label drugs by paying for them out of their own pockets. Those who can’t afford to pay for their own off-label medications will once again be reminded of the disparity of healthcare services in the United States.
Resources:
Some insurers refuse off-label specialty drug coverage amid surging costs, Daily Briefing, Health Care Advisory Board, September 18, 2007.
Insurers Scale Back Coverage of Costly Experimental Drugs, California Healthline, September 18, 2007.
