The image of the pharmaceutical industry has seen some battering. Pricing issues, recalls, product withdrawals, clinical trial practices, me-too products, some marketing efforts, all have eroded the image of the industry that in essence often brings miracles and therefore people to life. One might not think of a reimbursement policy as something that could add to the image woes, but it can.
Tier 4 pricing is a practice recently profiled in a New York Times article where a co-pay is not set at a strict dollar amount, such as $10 or $20, but rather at a percentage of the overall cost – say 30 percent. If the drug is a generic, probably no big deal. If it is a life-saving cancer therapy, it probably is a big deal. This is quite common among Medicare drug plans, but according to the article, it is increasing among private plans, and your insurer can switch without notice to the insured. The article cites circumstances where patients only discovered the fact that they were moved to Tier 4 pricing when they went to pick up a prescription and found that the price had dramatically increased.
Rather than spreading costs and thus risk among a pool of insured, Tier 4 sticks it to the sickest patients.
There are two bad guys to the story. First and foremost, are the insurance companies. But the reason the patient now has to pay so much is not only because he or she was moved from a set dollar amount to a percentage, but the price becomes so high for the patient because he is now paying a percentage of a very expensive drug. That makes a bad guy of the manufacturer who set the price. Whereas before the insured patient was somewhat removed from the pricing issue of drugs and biologics, with Tier 4 , the issue of pricing becomes far more personal to the patient than it was with a $20 co-pay.
The pharmaceutical industry has an interest in supporting any effort that would bring an end to Tier 4 pricing. Tier 4 essentially does away with the purpose for insurance. Tier 4 is not doing anyone, except insurers, any good.