ideasIdea

Federal oral chemotherapy parity for self-funded employer plans

Most states require insurers to charge no more for a cancer pill than for an infusion, but the law does not reach the self-funded employer plans that cover most working Americans; a federal rule would close the gap.

Oral anticancer drugs are usually covered under the pharmacy benefit with coinsurance on a specialty tier, while infused drugs fall under the medical benefit with a copay. Forty-three states and the District of Columbia have parity laws, but the federal ERISA statute exempts self-funded employer plans, which cover roughly two-thirds of workers with employer coverage. The Cancer Drug Parity Act has been introduced in successive Congresses to apply parity to all plans.

Hypothesis

Federal parity will reduce the share of oral oncology prescriptions abandoned at the pharmacy for cost reasons among self-funded plan members by more than a third, at a premium cost of well under 1%.

Rationale

State parity laws had small premium effects and reduced high out-of-pocket bills; the excluded population is the largest remaining group.

What would test it

Enactment followed by claims-based evaluation of abandonment rates and out-of-pocket costs in self-funded plans against state-regulated plans.

Maturity

early clinical

Who has to act

policy

Cost to try

Small (under $1M)

Years to first evidence

Bottlenecks it attacks

Prices and value · New cancer drugs routinely cost over $150,000 a year, often for months of benefit. Systems cannot afford them and patients go bankrupt.
Regulatory divergence between regions · Regulatory divergence means a drug approved in one country can take years to reach another, or never arrive.