Are Oral Parity Laws Really Effective?

Oncology Business News®April 2016
Volume 5
Issue 4

Oral parity legislation for getting newer drugs to patients under similar coverage terms as for older drugs often involves a battle that doesn’t stop when a law is passed.

Cary Presant, MD

Oral parity legislation for getting newer drugs to patients under similar coverage terms as for older drugs often involves a battle that doesn’t stop when a law is passed. Forty states have now enacted some kind of costlimiting legislation, four states are holding out, and the remainder have legislation in the works.1 A number of these deals involve compromises that soften the financial impact for payers, and not enough is being done to educate doctors and patients about the benefits these programs do allow, physicians and advocates say. They say an important part of the safety net aspect of these laws has to be education that lets patients know they have another option for lessening the cost of cancer care.

Table: Higher Out-of-Pocket Costs Lead to Nonadherence

Source: Streeter SB, Schwartzberg L, Husai N, Johnsrud M. Patient and plan characteristics affecting abandonment of oral oncolytic prescription. J Oncol Pract. 2011;7(suppl 3):46s-51s. doi: 10.1200/JOP.2011.000316.

A case in point is AB 219, an oral drug law enacted in California in early 2015 that underwent a rocky road to passage in a form that was different from what its proponents had envisioned. In the end, two advocacy groups dropped their support because they didn’t think the law was going to do an adequate job of improving access to care for patients with cancer. The bill originated as a desire for a “pure parity” law that would force payers to cover oral anticancer medications on the same cost basis as they would for intravenous or injected chemotherapy, but the legislation was buffeted by opposition and vetoed by former Gov. Arnold Schwarzenegger before being modified into a caps bill that simply limited patient co-payments and coinsurance expense to $200 per medication, per month, after deductibles were met.

One of the triggers for this less favorable adjustment, explained Meghan Buzby, senior director of advocacy for the International Myeloma Foundation (IMF), was first the adoption of a $100 cap bill in Louisiana and later a $300 cap bill passed in Utah. Advocates began to worry that opponents of the California bill would notice what was happening elsewhere and decide to push hard for similar legislation. “We knew that Utah would potentially affect the California bill. And in fact it did. They brought up caps as opposed to pure parity,” Buzby said.

This caused certain sponsors to back out. Buzby explained that a $100 cap might have been acceptable to patient advocates but that $200 was statistically too far out of the comfort zone (Table, Cover). Too many patients would find that amount above their ceiling of affordability and balk at paying, thereby foregoing treatment and missing out on the opportunity to bring their cancer under control. The National Patient Advocacy Foundation went against the bill, and so did the IMF. “We do not support caps bills that go over $100,” Buzby said, citing an Avalere study showing declining adherence among patients the more they pay out-of-pocket.

Although it’s still important to the IMF and other groups that patients in California have affordable access to cancer medications, there is no reliable tracking system for following up and finding out whether payers are, in fact, adhering to the new caps law. Patients from other states with laws intended to equalize intravenous (IV) and oral drug costs have notified the IMF that there are issues of noncompliance in those localities, whereas California has registered only one complaint about noncompliance with AB 219, according to the Department of Managed Health Care. The Association of Northern California Oncologists has attempted to find out how well the law is performing but did not get very far, according to group Executive Director Jose Luis Gonzalez: “In late 2015, we attempted to survey the members on the implementation of AB 219 in light of some reports that some health plans were not in compliance. No members responded to that survey,” he stated in an e-mail response.

Cary Presant, MD, chairman of the board of the Medical Oncology Association of Southern California and the author of Surviving American Medicine, said that although laws like AB 219 may not be everything advocates desire, they represent an important element of the access network for patients. He said an education program that encompasses both physicians and patients is key to making certain that people know that such options are available to them.

At the same time, he said, a caps program that sets the bar at $200 does not have to be a patient’s best hope for affordable medication. As many as 80% or 90% of the pharma companies selling drugs in the cancer market make their products available at significant discounts to enable the indigent and the hard-pressed to obtain them, Presant noted. “Rather than a 20% co-pay, there may be a $50 a month co-pay, and they do that to encourage utilization of the medications—so the patients will be willing to take them.”

Such programs make up for a portion of the damage for which failed legislation may be responsible, and they do help to ward off noncompliance, whose incidence tends to become more of a problem the longer patients have to contend with large out-of-pocket expenses, said Presant, a hematology/oncology practitioner with the City of Hope Medical Group in southern California. “We found that as you get out to a few years of therapy, the noncompliance rate gets to be very high. We were looking at a 40% noncompliance rate.“

The American Cancer Society Cancer Action Network (ACS CAN) was one of the groups that supported AB 219. However, ACS CAN was disappointed about the switch to a caps format, for the reason that evidence shows that patients back away from their drug purchases when it starts to hit them harder in the wallet. “Typically, we would have a preference for oral chemo fairness bills that ensure that the cost of orals doesn’t exceed the cost someone would pay for IV treatment under a plan,” said Dana Malick, senior specialist for state and local campaigns for ACS CAN.

“There are a number of bills that have run in different states since California that looked to cap the per-drug, per-month cost for all drugs under a plan at a certain number, and we’ve supported some of those and not supported others; so we do look at that number really closely and try to look at the data that’s out there to support where to draw a line in the sand.”

The California law applies to high-deductible health plans that emerged in the wake of the Affordable Care Act, whereas older plans are grandfathered in. Nevertheless, it is the standardized payment structure of some of these newer plans that makes it much easier to determine what payers have to cover and to what extent, Malick said.

The results of recent studies done by ACS CAN show that transparency is still lacking in many plans, owing to coinsurance provisions that make it difficult for consumers to compare one plan with another2,3; in addition, such complexities make it harder to determine whether a fair cost sharing design does exist between what health consumers are being required to pay out-ofpocket for newer oral cancer medications versus what they would be paying for chemotherapy administered by infusion in a doctor’s office, Malick says.

“For an oral oncology medication, it’s usually, hopefully, listed on a formulary, and the corresponding cost sharing for whatever formulary tier it falls on is listed in plan documentation, as well, so the consumer has some idea of what that drug will cost. But IV drugs administered in a physician’s office are covered under the plan’s medical benefit typically, and it is rare to find those drugs listed on a formulary or really anywhere else in plan documents,” she said. “I think it’s difficult to verify how plans are complying in that way, as well, because the information about how much IV drugs cost under a health plan is not easy to find.”

After all of the effort to get cost limiting legislation passed, the ongoing potency of a legislator who acted as a sponsor is diminished in relation to their staff’s ability to monitor the outcomes of the legislation and respond to problems. In the case of cost curbing legislation for which there are no frameworks established to oversee performance and compliance, a blind spot develops that makes it difficult to gauge whether the laws are having any effect whatsoever, patient advocates said. “Like so many legislative initiatives where carriers are required to do something specific to cost sharing, a lot of times regulators don’t have the bandwidth to go through and check each plan for every single requirement on the books in their state,” Malick said.

This means that consumers need to speak up when they have difficulty obtaining drugs for what they think is a statutorily acceptable price. In order to have that sort of a voice on the issue, they first need to be properly educated to know their rights and how the laws are meant to work, advocates said. ACS CAN has attempted to work with providers to convey this information to health consumers, but the effort remains “a work in progress,” Malick said.

Such an effort should be complemented by good, sound follow-up by physicians who are themselves properly educated on patient financial need, says Presant. “Roughly 20% of patients have really severe financial problems, and about 30% have a perception of really severe financial risks,” meaning that the fear of going into debt or assuming a large uncovered expense can often be the catalyst for refusing to purchase or take their medication. “Physicians need to be more aware of the financial problems that patients face,” said Presant. “We need to ask our patients, ‘How are you doing in terms of being able to afford these medications and your treatment programs?’ so that we can help them with financial counselors, social service support, and the use of different programs, whether it is AB 219 or a pharma company support program.”

More work by patient advocacy organizations could certainly help with this need, Presant says. Oncological societies should step up as well by informing their constituencies about the existence of parity laws and other sources of assistance, and also by pushing their memberships to become more directly involved in helping their patients navigate the financial matters that may constitute barriers to effective care.

The achievable payoffs are not insignificant, Presant says. “There will be fewer possible problems with patients failing therapy and becoming higher users of national resources. Most success is when you have a successful treatment program and you don’t see premature recurrences and death.” For this reason, more study is necessary, particularly with respect to Medicare patients and their adherence issues, he said.

On the federal level, attempts to get a national parity law enacted are continuing4, and the advantages of this would be a degree of uniformity that evens out the disparities found among the multiple state plans in existence, advocates say. An additional benefit of a national law would be applicability to health plans that currently fly above the reach of existing mandates.

Current federal legislation would amend the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act, and the Internal Revenue Code so that health insurance plans are required to cover prescribed and patient-administered anticancer medications on terms no less favorable than for medications that are administered by health care providers. These entities govern and set standards for many insurance plans that are not touched by state drug equalization laws, and a federal law would therefore widen the access net for patients.

This legislation would also prevent a payer from simply modifying other terms of coverage to avoid having to pay out more for anticancer medications whose coverage terms would be changed by enactment of price equalizing legislation. Also there would be no out-of-pocket limits established, such as exist with caps bills enacted by California and various other states, according to Keysha Brooks-Coley, director of federal relations for ACS CAN. “The requirement for the federal bill is that health plans would not be allowed to increase out-of-pocket costs that go over [the cost of] a comparable medication that is infused. That’s the way the language is drafted. That’s very different from the state legislation,” she said. “The federal legislation goal is to make sure it doesn’t matter what state a patient is from. They would have access to these oral drugs,” she said. The national bills are currently in the House and Senate, and no hearing has taken place so far. “We’re trying to make sure to get more support on both sides of the aisle,” Brooks-Coley said.


  1. Ensuring equal access under the law. International Myeloma Foundation website. http://myeloma. org/ArticlePage.action?articleId=3708. Accessed March 16, 2016.
  2. Skopec L. ACS CAN examination of cancer drug coverage and transparency in the health insurance marketplaces. American Cancer Society Cancer Action Network website. content/wp-content/uploads/2015/11/ACS%20CAN%20Drug%20Formulary%20Paper%20FINAL. pdf. Published November 18, 2015. Accessed March 16, 2016.
  3. Cancer drug coverage in health insurance marketplace plans. American Cancer Society Cancer Action Network website. formularies_whitepaper.pdf2014. Published March 2014. Accessed March 16, 2016.
  4. Oral parity bill will help limit the out-of-pocket costs of cancer care [news release]. Washington, DC: American Cancer Society Cancer Action Network; June 12, 2015. content/media-center/oral-parity-bill-will-help-limit-the-out-of-pocket-costs-of-cancer-care/ Accessed March 16, 2016.

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