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Congressional Research Service 7-5700 www.crs.gov R44132 Summary Specialty drugs are one of the fastest-growing areas of health care spending. There is no one set definition of specialty drugs, although insurers and other health care payers often characterize them as prescription products requiring extra handling or administration that are used to treat complex diseases including hepatitis C, multiple sclerosis, and cancer. High cost can trigger a specialty drug designation. Biologics, or drugs derived from living cells, are often but not always deemed to be specialty drugs. Over the past several years, spending for specialty drugs has been growing at a faster rate than spending for other pharmaceuticals. For example, in 2014, U.S. prescription drug spending rose by 13% from the previous year—the fastest pace since 2001—led by a 26.5% increase in spending for specialty drugs (with much of that spending for drugs to treat hepatitis C), according to industry and government data. Specialty medications now account for about one-third of total U.S. prescription drug spending, and some analysts predict they could make up as much as one-half of total drug spending by 2018. Insurers have tried to control spending for specialty drugs, in part, by increasing cost sharing for beneficiaries of their health care plans and taking other steps to limit access under their policies. Consumer advocates say that these efforts have undercut some of the recent gains in prescription drug insurance coverage. During the past decade, Congress has expanded consumer access to prescription drugs by enacting the Medicare Part D prescription drug program, requiring certain health plans to provide prescription drug benefits as part of the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended), and expanding the state-federal Medicaid program. Some lawmakers now are focused on ensuring that private and public health care payers do not structure insurance benefits in such a way that certain enrollees cannot afford to fill prescriptions for high-cost medications. During the 113th Congress, for example, lawmakers introduced legislation to cap out-of-pocket spending by insured consumers for specialty drugs. In recent years, states such as New York and Delaware have enacted laws that limit consumer cost sharing for prescription drugs. Dozens of states also have passed laws that bar insurers from imposing higher out-of-pocket charges for oral specialty cancer drugs than for traditional treatments. Others have debated bills to require insurers to detail drug development costs. Although some of the legislative proposals can reduce consumer out-of-pocket costs, they do not address the overall price of specialty drugs. Congress historically has attempted to improve prescription drug affordability by providing incentives to increase supply and market competition. Lawmakers fund basic drug research through the National Institutes of Health and provide nonrefundable tax credits for qualified research spending. Federal laws including the Orphan Drug Act of 1982 (P.L. 97-414), the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman; P.L. 98-417), and the ACA provide financial incentives for both new, breakthrough drugs and lower-cost substitutes. Those incentives may provide some financial relief in the longer term, but in the short run federal programs and private payers face high up-front prices and spending for new specialty therapies, such as recently introduced treatments for hepatitis C and cancer. This report provides background on specialty drugs. To put specialty drug development, distribution, and spending in context, the report provides information about broader U.S. prescription drug pricing, insurance, and regulatory trends. Contents Introduction 1 U.S. Prescription Drug Market 5 Specialty Drugs 7 Biologics 8 Orphan Drugs 9 Specialty Drug Spending Trends 10 Costs and Benefits of Specialty Drugs 11 Specialty Drug Spending Controls 12 Enrollee Utilization Policies 13 Tiered Formularies 14 Site of Care 17 Specialty Pharmacies 18 Manufacturer-Payer Negotiations 19 Sovaldi as Case Study of Payer Negotiations 20 Outstanding Issues 21 Consumer Insurance Coverage of Specialty Drugs 21 Potential Changes in Drug Payment and Pricing 23 Figures Figure 1. U.S. Prescription Drug Spending 1980-2024 7 Figure 2. Factors Determining Specialty Drug Designation 8 Figure 3. 2014 U.S. Spending for Prescription Drugs by Source 13 Figure 4. Percentage of Insurers Using Strategies for Managing Specialty Drug Use 14 Figure 5. Tiered Formulary 15 Contacts Author Contact Information 24 Introduction Specialty drugs are one of the fastest-growing areas of health care spending. Although there is no commonly accepted definition of specialty drugs, insurers and other health care payers generally characterize them as expensive prescription products requiring extra handling or administration (such as injection or infusion) that are used to treat complex diseases including multiple sclerosis, cancer, and hepatitis C. Biologics—complex drugs derived from living organisms—are often but not always specialty drugs, as are so-called orphan drugs, which are targeted at rare diseases or disorders. U.S. spending for specialty drugs increased by 26.5% in 2014 as new drugs for treating hepatitis C came to the market, according to a broad analysis of pharmaceutical market data. Other, more targeted studies also show rapid growth for specialty products. According to one of the largest U.S. pharmacy benefit managers (PBMs), specialty drugs account for less than 1% of U.S. prescriptions but about one-third of prescription drug spending. Some health care industry analysts and PBMs predict that specialty drugs could account for half of all annual prescription drug spending before the end of the decade. To date, the rapid increases in specialty spending have been driven mainly by price inflation, although utilization is starting to play a larger role as manufacturers bring a wider array of specialty drugs to market, including products with broad applications, such as the treatments for hepatitis C. What Is a Pharmacy Benefit Manager? Pharmacy benefit managers (PBMs) serve as intermediaries between drug manufacturers and health care payers, such as self-insured businesses; insurance companies, including insurers that participate in Medicaid and Medicare; and union-run health plans. PBMs handle prescription billing; negotiate drug prices with drug companies; and create retail pharmacy networks for insurers, including contracting with mail-order pharmacies and negotiating reimbursement rates with them. PBMs also design insurance formularies, which are lists of drugs covered by an insurance plan. PBMs oversee prescription drug benefits for more than 210 million Americans. The largest PBMs include Express Scripts, with 28% market share; CVS Caremark, with 27% market share; UnitedHealth Group, with 10% market share; and Catamaran, with 7 % market share. Other large PBMs include Prime Therapeutics, MedImpact, and Cigna. Consolidation in the PBM industry is ongoing. Drug retailers have merged with PBMs to provide integrated health services. CVS Health is a retail pharmacy chain and a PBM. The Rite Aid drug store chain in 2015 purchased the PBM EnvisionRx. Some insurers operate their own PBMs, such as a group of Blue Cross and Blue Shield plans that owns Prime Therapeutics, and UnitedHealthcare, which owns OptumRx. (Catamaran and OptumRx combined in 2015.) The growing use of specialty drugs poses complex issues for private insurers and government health programs such as Medicare, Medicaid, and the Veterans Health Administration. Specialty drugs can provide marked improvement or a cure for individuals with serious diseases, thereby reducing the need for hospitalizations and other health services. The potential long-term benefits of specialty drugs may not always offset their higher up-front costs, however. In addition, because the U.S. health care system is decentralized and consumers may change insurance providers, one insurer may bear the cost of the drugs while another insurer may reap the benefit of reduced health care spending for an enrollee treated with specialty pharmaceuticals. Insurers and employers, and the PBMs with which they contract, control drug costs in part by negotiating discounts and rebates with manufacturers. Because there are no ready substitutes for many newly introduced specialty drugs, health payers may have less ability to negotiate significant price reductions. To contain spending, many health care payers also control enrollees' access to specialty drugs under their plans. Insurers may require enrollees to obtain prior authorization for specialty prescriptions (meaning the insurer must review and approve the prescription before paying for it), impose higher cost sharing for the drugs (charge higher out-of-pocket amounts to fill a prescription), or cover the drugs for only the sickest patients. The net result is uneven access to the products for consumers in private insurance plans and some government programs, in terms of both availability and cost. Congress, which plays a major role in the prescription drug market, has attempted to address broad issues regarding prescription drug price and availability by expanding insurance coverage and providing incentives for pharmaceutical manufacturers to increase the supply of drugs. In the past decade, Congress has provided subsidized drug coverage to tens of millions of consumers by implementing the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA; P.L. 108-173), which created the Medicare Part D prescription drug program and the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended), which requires insurers to provide basic prescription drug benefits in qualified-individual and small-group health plans sold on exchanges. In addition, as part of the ACA, Congress expanded Medicaid, which also provides prescription drug benefits. Reflecting the increasing government role, the federal share of U.S. prescription drug spending rose to a projected 41% in 2014 from 25% in 2005—the year before Medicare Part D took full effect. Lawmakers also have provided patent protection and other financial incentives for pharmaceutical manufacturers to develop drugs through the Orphan Drug Act of 1982 (P.L. 97-414); the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman; P.L. 98-417); and the ACA. Lawmakers fund basic research through the National Institutes of Health and provide nonrefundable tax credits to the industry for qualified research spending. Common Insurance Terms Used in This Report Co-payment: A fixed dollar amount that an enrollee in a health care plan pays for a product or service covered by the plan. For example, an insurer may charge a $20 co-payment for a physician visit or a $5 co-payment for a prescription drug. Coinsurance: The percentage share that an enrollee in a health insurance plan pays for a product or service covered by the plan. An insurer may charge 10% coinsurance for a $100 prescription drug, meaning the consumer's out-of-pocket cost is $10. Deductible: The amount an enrollee is required to pay for health care services or products before his or her insurance plan begins to provide coverage. An enrollee in an insurance plan with a $500 deductible would be responsible for paying for the first $500 in health care services. In some insurance plans, the deductible does not apply to certain services, such as preventive care. Insurance plans vary regarding whether beneficiaries must meet a deductible for prescription drug coverage. Formulary: A list of prescription drugs covered by an insurance plan. In an effort to control costs, insurers are imposing what are known as tight formularies that include a more limited number of drugs. Insurers also are using tiered formularies, under which patients are charged lower co-payments or coinsurance for less expensive generic drugs and certain brand-name drugs that are designated by the plan as preferred drugs because they are lower cost or deemed by an insurer to be safer or more effective. Under these tiered formularies, patients are charged higher co-payments or coinsurance for more expensive drugs or drugs that the plan deems to be less effective. Out-of-Pocket Costs: The total amount an insured consumer pays each year for covered health care services that are not reimbursed by an insurance plan. Out-of-pocket costs can include deductibles, co-payments, and coinsurance. Out-of-Pocket Maximum: The maximum amount an enrollee must pay before his or her health insurance plan covers 100% of health benefits. Certain costs, such as premiums, generally are not counted toward an out-of-pocket cap. Pharmacy Network: A group of retail, mail-order, and specialty pharmacies that contract with health insurers to dispense covered drugs at a set price. Network pharmacies also may provide other services under contract, such as monitoring patient adherence to drugs. Some states require insurance companies to contract with any willing pharmacy that agrees to meet their financial terms. In other states, insurers may contract with a smaller network of preferred pharmacies. Insurers say they have more ability to negotiate price concessions in preferred networks. Premium: The amount an enrollee pays for health insurance coverage. Many plans charge monthly premiums, but premiums also can be assessed on a quarterly or annual basis. Sources: Information from Congressional Research Service (CRS) reports, Healthcare.gov, and other sources. Recently, there has been an increased focus on specialty drugs. During the 114th Congress, lawmakers introduced bills to cap insured consumers' out-of-pocket spending for high-priced drugs. Some state governments have enacted laws to limit consumer out-of-pocket spending for specialty drugs, and many have prohibited insurers from charging consumers higher cost sharing for certain newer specialty cancer drugs than for existing treatments. In addition, some ACA state health insurance exchanges have moved to limit prescription drug cost sharing in exchange-offered insurance plans. This report provides information about the specialty drug market and insurance coverage. To put specialty drug development, distribution, and spending in context, the report also provides information about broader U.S. prescription drug pricing, insurance, and regulatory trends. U.S. Prescription Drug Market The United States is the world's largest pharmaceutical market, making up more than one-third of total global drug spending. Roughly 10 cents of every U.S. health care dollar is spent on prescription drugs ($305 billion in 2014). According to federal data, from 1980 through 2007, U.S. prescription drug spending rose by about 11% annually, on average. From 2008 through 2013, the pace of annual drug spending slowed to about 2% on average. (See Figure 1 for annual growth rates.) There were several reasons for the recent slowdown, including the 2007 economic recession, which also helped reduce overall U.S. health care costs; the increasing use of insurer drug-utilization controls; and the introduction of fewer blockbuster, brand-name drugs than in previous years. Rising utilization of lower-cost generic drugs was a major factor in holding down costs, as patents for a number of best-selling brand name drugs expired. Hatch-Waxman Act In 1984, Congress enacted the Hatch-Waxman Act to spur the development of lower-cost generic drugs. Generic drugs are identical to traditional brand-name drugs in dosage, safety, strength, route of administration, quality, performance characteristics, and intended use. The act provided manufacturers of innovative prescription drugs with patent protection and a period of marketing exclusivity; created a generic drug approval process to help companies bring products to the market more quickly once the patent for an original brand-name drug expired; and established procedures for resolving patent disputes arising from applications to market generic drugs. Consumers and health care payers can realize significant savings from generic drugs, which can cost 75%-80% less than an original brand-name drug. The average price of a brand-name drug also may decline after a generic comes to the market. Only 19% of prescriptions were filled with generics when Hatch-Waxman was enacted. The generic market share rose to 86% in 2013 and accounted for 28% of U.S. drug spending. In its latest forecast for national health spending, the Centers for Medicare & Medicaid Services (CMS) projected that U.S. prescription drug spending rose by 12.6% in 2014, due in part to increased specialty drug use, and would average 6.3% annual growth from 2015 through 2024. (See Figure 1.) CMS says ACA implementation is helping drive the higher spending, as millions of Americans become newly insured or obtain more comprehensive coverage, including prescription drug benefits. The improving economy and improved drug adherence are other noted factors, along with the fact that Americans are using more prescription drugs for longer periods of time to treat chronic ailments such as diabetes or heart disease. Some analysts predict that generic drug utilization will level off at about 91%-92% of filled prescriptions in the next several years, meaning generic substitution could play a smaller role in limiting drug spending. In addition to the fact that fewer blockbuster, traditional drugs will lose patent protection than has been the case during the past several years, a greater share of drugs under development are biologics for which there are not many lower-cost substitutes. Manufacturers also have increased prices for a number of existing brand-name and generic drugs. Figure 1. U.S. Prescription Drug Spending 1980-2024 (annual percentage change from previous year) Sources: Centers for Medicare & Medicaid Services (CMS), National Health Expenditure Projections, 2014-2024, Table 11, and CMS Historical Data. Specialty Drugs As previously noted, specialty drugs are broadly described as prescription drugs that are expensive; need special handling or administration, such as drugs that are infused or injected; have limited distribution; are targeted at a narrow group of chronic diseases; or are biologics. (See Figure 2.) Even those general categorizations do not hold across all insurers and government health care programs. In the voluntary Medicare Part D program, for example, price is the main factor used to determine whether an insurer may classify a drug as a specialty product and impose higher cost sharing. Figure 2. Factors Determining Specialty Drug Designation (leading criteria for specialty drug determination cited by managed care plans) Source: EMD Serono Specialty Digest, 10th Edition, p. 10. Notes: Data are based on a survey of 91 Medicare Advantage and commercial managed care health plans representing 124 million covered lives. For those plans that cited high cost as a factor, 86% defined high cost as more than $600 per month. Biologics Many specialty drugs are biologics. Biologics are products derived from a living organism that can be many times the size of a conventional (small-molecule) drug and have a more complex structure. Biologics may be sensitive to heat and contamination, making them more difficult to ship and store. Biologics often must be injected, although a growing number are available in oral form. Examples of biologics include monoclonal antibodies for treating cancer, botox, and shingles and flu vaccines. Pharmaceutical firms are focusing on development of biologic drugs, which accounted for about 22% of sales by the world's top pharmaceutical companies in 2013, according to research. Congress has provided 12 years of product exclusivity for certain biologic drugs, which limits manufacturers' initial market competition and increases their pricing power. Lawmakers also have attempted to spur development of lower-cost biosimilar products, similar to earlier efforts to stimulate development of generic products. Congress enacted the Biologics Price Competition and Innovation Act of 2009 (BPCIA) as Title VII of the ACA. The ACA/BPCIA gives the U.S. Food and Drug Administration (FDA) authority to license products shown to be biosimilar to or interchangeable with an FDA-licensed biological product. The Congressional Budget Office (CBO) has estimated that the ACA/BPCIA eventually could reduce insurer and consumer spending for biologics. Orphan Drugs Many orphan drugs (which often are biologics) are classified as specialty drugs by insurers and other payers. An orphan drug is a drug targeted at a rare disease or condition (1) affecting fewer than 200,000 persons in the United States or (2) affecting more than 200,000 persons in the United States but for which there is no reasonable expectation that the sales of the drug will be sufficient to offset the costs. The Orphan Drug Act of 1982 (P.L. 97-142) provides seven years of marketing exclusivity, tax credits, and FDA assistance with the review process as incentives for pharmaceutical firms to develop such drugs. Of the 41 novel new drugs approved by the FDA in calendar year 2014, 41% were orphan drugs, the highest annual total since passage of the Orphan Drug Act. Manufacturers often set high prices for orphan drugs. Pharmaceutical companies point out that they have a narrow patient population from which to recoup development and marketing costs. Some orphan drugs expand beyond their target market if they are effective for treating other conditions that were not part of the original FDA approval process (a situation known as off-label use). Some orphan drugs have reached blockbuster status, meaning they have sales of more than $1 billion per year. Specialty Drug Spending Trends Specialty medications grew from 23% of total U.S. prescription drug spending in 2010 to 33% in 2014 and accounted for about 73% of overall drug spending growth during that period, according to one analysis. PBM data show that specialty drug spending has been growing much faster than spending on traditional drugs. For example, businesses and commercial insurers served by PBM Express Scripts posted a 30.9% increase in specialty drug spending in 2014, compared with a 6.4% rise for traditional drugs. Price inflation has been the main driver of specialty drug spending in recent years, but volume growth played a larger role in 2014 because 161,000 people began treatment with hepatitis C drugs. According to IMS Health, spending for hepatitis C drugs amounted to $12.3 billion in 2014, with $11.3 billion of that total coming from spending on newly introduced hepatitis C drugs. Medicare Part D spent $4.5 billion on new hepatitis C medications in 2014, compared with $286 million that the program spent on earlier-generation hepatitis C drugs in 2013. Specialty drug spending in private and public health plans has been concentrated on a relatively narrow range of therapy areas including oncology, autoimmune diseases, HIV/AIDs, multiple sclerosis, hepatitis C, growth factors, and hormones for red cell production. For many insurers, the comparatively small share of enrollees who use specialty drugs accounts for a disproportionately large share of total prescription drug spending. For example, in Medicare Part D, specialty tier drugs made up 0.25% of prescriptions filled by enrollees in 2013 but more than 11% of total Part D drug spending. In the private sector, PBM Prime Therapeutics estimated that specialty prescriptions made up less than one-half of 1% of commercial insurance claims in 2013 but 20% of pharmacy benefit spending for the Blue Cross and Blue Shield plans it served. According to CVS Caremark, 3.6% of its enrollees in the health plans it served used specialty drugs in 2013, which accounted for 20% of prescription drug spending at retail pharmacies and nearly the same share of pharmacy spending in hospitals and other institutions. Health care payers have been scrambling to adjust to the changing drug marketplace. For example, health care actuaries have been having difficulty projecting future costs for specialty drugs, which in turn affects insurers' ability to accurately bid to offer prescription drug coverage to consumers. Costs and Benefits of Specialty Drugs Manufacturers justify specialty drug prices based on the cost of bringing a new product to market and the potential benefits of the drugs. Specialty pharmaceuticals may improve a patient's quality of life or provide a cure, which, in turn, can provide offsetting savings to the health care system by way of fewer hospitalizations and other medical procedures. Although publicly traded pharmaceutical manufacturers release information regarding aggregate company research and development spending, detailed information on the costs of developing specific drugs generally is not readily available. An oft-cited study put the average cost of developing a new prescription drug at about $802 million in 2001. The study was updated in 2014 to a cost of $2.6 billion. There has been considerable debate among researchers about the estimate, with a number of analysts saying that the true cost is likely to be lower. Further, development costs for different drugs vary. Some targeted studies have looked at the costs and benefits of specific biologic and high-cost drugs. For example, a 2008 study found that using biologic drugs to treat rheumatoid arthritis and multiple sclerosis reduced the use of some other types of medical services. In this case, the savings did not offset the full cost of the drugs. A study of biologics used to treat colorectal cancer indicated that the drugs improved outcomes and life expectancy but created large increases in total expenditures and did not substitute for other medical services. A recent study examined the benefit-cost ratio of Sovaldi and another specialty hepatitis C drug, Harvoni. The study, which assumed an 11% average price discount for the drugs across payers, found that the drugs, which can provide a cure, were cost-effective in selected patient groups at a threshold where each additional quality-of-life year was valued at $50,000 and were cost-effective for most patients at a $100,000 threshold. However, the study noted that the resources needed to treat a large number of eligible patients could be "immense and unsustainable." Recent research indicates that the price of new cancer therapies, many of which are specialty drugs, increased by 10% a year (adjusted for inflation and health benefits) from 1995 to 2013. The authors posit that manufacturers were able to set the prices of new products at or slightly above the prices of existing therapies. Government-required rebates and other discounts may have contributed to higher launch prices as manufacturers tried to make up for the discounts by raising prices in other parts of the market. There are increased efforts to provide research on the possible benefits and costs of specialty drugs. During the next two years, for example, the Institute for Clinical and Economic Review plans to produce 15 to 20 public reports on newly approved FDA high-impact drugs. The reports will analyze the drugs' comparative effectiveness, cost-effectiveness, and potential budget impact. Specialty Drug Spending Controls Private employers and insurers are the nation's largest purchasers of prescription drugs, accounting for a projected 43% of annual spending in 2013, followed by the federal and state governments at about 41% and consumer out-of-pocket spending at about 16%. (See Figure 3 for prescription drug spending by source.) The health payers use a variety of strategies to control specialty drug spending. Figure 3. 2014 U.S. Spending for Prescription Drugs by Source (by percentage of total spending) Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Expenditures 2014-2024, Table 11. Notes: The category other health programs includes the state Children's Health Insurance Program, Department of Defense, and Department of Veterans Affairs. Other third party payers includes worksite health care, other private revenues, Indian Health Service, workers' compensation, general assistance, maternal and child health, vocational rehabilitation, other federal programs, Substance Abuse and Mental Health Services Administration, other state and local programs, and school health. Enrollee Utilization Policies Health care payers pass on a portion of specialty drug costs to enrollees through plan premiums and annual deductibles. Many payers also use targeted management tools including (1) requiring enrollees to pay higher cost sharing for expensive drugs (tiered formularies); (2) requiring prior authorization before covering certain medications; (3) mandating that enrollees try a less expensive drug before moving to a more expensive prescription product (step therapy); (4) limiting the length of an initial prescription to assess whether a drug works as intended; (5) requiring use of a specialty pharmacy; (6) offering only a limited formulary; (7) moving a drug to a pharmacy (retail) benefit from an institutional (medical) benefit to cut overhead; and (8) requiring closer oversight and monitoring of patients using specialty drugs. (See Figure 4.) This report will look at some of the most commonly used strategies. Figure 4. Percentage of Insurers Using Strategies for Managing Specialty Drug Use (2012 commercial insurance plan data) Source: Walgreens/Pharmacy Benefit Management Institute, 2013 Specialty Drug Benefit Report. Note: Based on survey of insurers and other plan sponsors covering 17.6 million enrollees. Tiered Formularies Payers commonly include tiered pricing to induce enrollees to use drugs that are less expensive or that are considered more effective. Under tiered pricing, a generic or preferred brand-name drug is put on a tier that requires a comparatively low co-payment, and drugs that are more expensive or deemed less effective are put on tiers requiring comparatively higher co-payments or coinsurance. In 2014, 80% of consumers with employer-sponsored insurance were in plans with three or more drug tiers, and 20% were in plans with four or more tiers. Figure 5. Tiered Formulary (example of pricing under a tiered formulary for a drug with a $100 price tag) Source: CRS. Notes: For purposes of this graphic, the preferred generic tier has a $0 co-payment; non-preferred generics have a $5 co-payment, preferred brand names have a $10 co-payment, non-preferred brand names have a $20 co-payment, and specialty drugs have 33% coinsurance. Payers often place specialty drugs on a tier that requires enrollees to pay coinsurance rather than a co-payment, which helps the payer keep pace with price inflation for expensive drugs and discourages use of the drugs in cases where substitutes are available. For example, a payer could impose a flat $20 co-payment for a $100 drug or it could charge 33% coinsurance for the product, which would result in $33 in out-of-pocket spending. Over time, the cost differential between price tiers has widened, imposing a greater burden on enrollees prescribed higher-priced drugs. While many consumers focus on the cost of monthly premiums when deciding whether a health plan is affordable, prescription drug tiers can have a major impact on the total cost of coverage. A recent analysis of non-group health plans sold through ACA insurance exchanges found that 60% of the least-comprehensive Bronze plans imposed co-insurance of 30% or more for drugs on specialty tiers, with 25% requiring coinsurance of 50% or more. About 23% percent of Silver plans, which cover a larger share of the federally required benefits, still had specialty-tier coinsurance of 30% of more, as did 33% of Gold plans and 10% of the most expansive Platinum plans. A few plans concentrated all drugs for treating certain conditions on a specialty tier that imposed coinsurance requirements, including not just the highest-cost drugs but also less expensive drugs used to treat the conditions, raising concerns about possible discrimination against certain classes of enrollees. In addition, the plans may require beneficiaries to meet a deductible before covering prescription drug