More evidence on the limited impact of state oral oncology parity laws

By the beginning of 2018, all but 7 states had passed oral oncology parity laws—a dramatic success story for community advocates and grassroots organizing. These laws attempt to address concerns related to very high out-of-pocket costs for patients filling orally administered anticancer drugs on their private health insurance plans, at least for patients who are enrolled in fully insured plans that are subject to state insurance mandates. Specifically, the objective of these laws is to equalize cost-sharing between oral and infused anticancer therapies (ie, creating “parity” between these 2 parts of the insurance benefit) or to introduce out-of-pocket spending caps for prescription drugs.

In the current issue of Cancer, Chin and colleagues provide an evaluation of how parity has impacted out-of-pocket spending on endocrine therapy for the prevention of breast cancer recurrences, comparing states with and without oral oncology parity laws between 2007 and 2014.1 Consistent with prior work, their study indicates that oral oncology parity laws did not consistently reduce out-of-pocket spending for endocrine therapy.2 Indeed, parity reduced spending at the 25th percentile of spending for 2 drugs (anastrozole and exemestane), increased it for a third drug (letrozole), and had no effect on the fourth drug (tamoxifen). Furthermore, the authors observed limited changes in out-of-pocket spending for fills at the 50th percentile or above and no changes in the mean copayment amounts paid for any drug as a result of parity. Despite these findings, Chin et al document that adherence improves when copayments decrease, which is consistent with prior research in this area.3, 4

In previous work, our study team has produced similarly disappointing results for the effect of oral oncology parity laws on out-of-pocket spending on anticancer drugs, with most savings accruing to those whose out-of-pocket prices already were low. However, the current study must contend with several other factors that complicate the investigation of the effect of parity. These include generic drug entry over the study period and ambiguity regarding the role of parity for adjuvant therapy, in which the goals of treatment are recurrence prevention rather than cancer treatment itself.

Prior studies have documented how generic entry of endocrine therapy reduced copayments and improved adherence3-5; therefore, the authors try to untangle the impact of generic entry and parity by conducting stratified analyses. The unadjusted analyses demonstrate that median copayments differ statistically only when considering generic drugs, and not branded drugs. The adjusted results reveal a more consistent impact of parity for generic drugs (a decrease in the 25th percentile of out-of-pocket spending for generic anastrozole, a decrease in median out-of-pocket spending for generic and brand exemestane, and an increase in median out-of-pocket spending for branded letrozole). This stratified analysis again documents that parity reduced copayments for patients who had the lowest out-of-pocket spending, particularly for generics: the most affordable medications.

To the second point, there is ambiguity regarding whether parity laws would extend to adjuvant endocrine therapy. For example, parity laws typically specify that an insurer, “shall provide coverage for a prescribed, orally administered anticancer medication used to kill or slow the growth of cancerous cells on a basis no less favorable than intravenously administered or injected cancer medications that are covered as medical benefits” (the text is from Kansas regulations but is similar or verbatim in other states).6 Given its role in the adjuvant setting, endocrine therapy may not meet the legal definition for products under the scope of oral oncology parity laws. However, it may be argued that it would fall under this definition because this process should slow the growth of cancer cells.

Beyond the ambiguity regarding whether parity extends to include adjuvant endocrine therapy, the response to parity laws may vary by insurer because of a lack of clarity regarding how these laws should best be implemented. Examples of outstanding questions include: Does cost-sharing for oral therapies have to be actuarially similar to infused therapies over the course of a therapy, the benefit year, or for each fill of a prescription? Do copayments have to be reduced for branded products if there is a generic that is below the threshold? Should cost-sharing be similar for medications used for a particular cancer or across all cancers?

In response to these challenges, some insurers, such as Blue Cross and Blue Shield of Massachusetts, simply decided to reduce copays to zero dollars.2, 7 Some plans may choose this approach because the overall budget impact will be relatively small in a small patient population and will garner positive publicity. The budget impact would be particularly small if the insurer is already providing generous coverage, with relatively low copays for patients, as demonstrated for privately insured patients filling orally administered anticancer therapies during the timeframe of the current study. In the context of endocrine therapy, particularly after the approval of generic formulations for these products, reducing cost-sharing for patients from $20 per fill to zero would have a very small budget impact.

Similar to prior work, Chin and colleagues report that oral oncology parity laws modestly reduced out-of-pocket spending for women receiving endocrine therapy. With median out-of-pocket prices for the generic products ranging from $11 per month for letrozole and anastrozole to $22 per month for exemestane, it is unclear whether affordability will remain a challenge for women who need these treatments, with or without parity. However, this issue should be carefully monitored given the long-term use of these drugs. Despite the lack of benefit of parity in this setting, it should be further explored in drugs that incur higher out-pocket costs, which likely were the original target for parity laws.

Funding Support

This publication was supported by the National Center for Research Resources, the National Center for Advancing Translational Sciences, and the Office of the Director, Nation Institutes of Health, through grant number KL2TR001438. Its contents are solely the responsibility of the authors and do not necessarily represent the official views of the NIH.

Conflict of Interest Disclosures

The authors made no disclosures.