In January, David Pable received some unsettling news from the pharmacy that handles his mail-order prescriptions: The out-of-pocket cost for a month's supply of Prezista, one of his HIV medications, was now $395.
Previously, he had been charged a flat monthly co-pay of $24.
And that wasn't the only worrying news for Pable, 44, a former restaurant manager from South Carolina, who is on long-term disability and receives his medications through a plan from UnitedHealthcare, obtained under Medicare Part D. He also faced a sharp price spike for another of the drugs he takes, Viread, from $42 to $295, as well as smaller increases for two other drugs.
"I was shocked," he said. "That's a significant amount of money for anyone to come up with."
Pable was able to get his medications covered by the AIDS Drug Assistance Program, a federally funded but state-administered program that had already been covering his smaller co-pays. When his pharmacy benefits changed in January, he was able to arrange expanded assistance for the increased expenses.
But others less integrated into the HIV community might have more difficulty accessing such resources and be forced instead to pay for other necessities, Pable said.
"Say somebody had $56 co-pays and then all of a sudden it went up to $1,256," he said. "What are you going to choose, paying for medicine or your place to live? My concern is that someone wouldn't know to ask for help, wouldn't know that there are assistance programs out there."
According to a UnitedHealthcare spokeswoman, Pable was sent a letter in September informing him of changes to his Medicare Part D drug benefits plan. Pable said he does not recall receiving or reading such a letter.
Since the start of this year, many people with HIV have experienced steep increases in the costs of their antiretroviral medications. This isn't just price-gouging, some public health advocates say — arguing it's also a blatant attempt to discriminate against patients who need expensive treatments. The goal, according to these advocates, is to force people with HIV to choose other health plans or force their doctors to prescribe less expensive, and perhaps less effective, medications.
Until this year and the full implementation of the Affordable Care Act — which required the creation of online health insurance exchanges in every state — insurance companies could reject anyone with HIV, or other pre-existing medical conditions, who was applying for an individual plan. That's no longer legal, but public health advocates say that hasn't stopped companies from trying to weed out applicants who might consume more health care resources.
"It's naïve to think that the insurance industry, having spent tens of billions of dollars to keep unhealthy people off their plans, is going to stop trying to figure out ways to maximize the number of healthy people," said Robert Greenwald, a professor at Harvard Law School and a member of the HIV Health Care Access Working Group, a coalition of organizations involved in HIV policy issues.
Soaring pharmaceutical costs are not limited to HIV medications — many people with cancer, hepatitis C, and other complex and expensive illnesses have been facing similar increases. But the problem can be acute for people with HIV, who must take daily antiretrovirals to prevent the virus from replicating. If patients can't pay for medications and therefore miss even a few doses, the potential consequences are dire: increased drug resistance, a greater risk of transmitting the virus to others, and other serious and sometimes fatal medical complications.
Patient groups and government regulators are beginning to challenge the price increases. A complaint filed with the Department of Health and Human Services last month accuses four companies selling plans on Florida's health insurance exchange of discriminating against people with HIV by requiring them to pay 40 to 50 percent of the full retail price for their antiretroviral medications. "We believe it's definitely an effort to keep people with HIV off their plans," said Carl Schmid, deputy executive director of the AIDS Institute, a Florida-based advocacy group that co-filed the complaint.
Also last month, the Illinois Department of Insurance warned insurers that it plans to scrutinize proposed 2015 health exchange plans for evidence of HIV discrimination. Failure to cover medications on the federal government's list of "preferred" and "alternative" HIV drug regimens could be considered discriminatory, noted the statement from director of insurance Andrew Boron.
A spokesman for America's Health Insurance Plans, a trade organization, said that the prices of drugs for many different conditions, not just HIV/AIDS, have risen tremendously, and that consumers have the option of choosing plans with larger premiums but lower cost-sharing for medications. Moreover, he noted, the maximum deductible on health exchange plans is $6,350 for an individual, with subsequent expenses — including medications — covered in full.
In recent years, insurance companies have deployed a variety of techniques to shift more of the burden of medication costs onto their customers, but the trend appears to have accelerated with the advent of the Affordable Care Act, through which more than eight million Americans have obtained individual health insurance plans.
In particular, health insurance plans that pay for drugs compile lists of the medications they will cover, known as formularies. These formularies generally divide drugs into a range of tiers; newer and more expensive drugs are placed in higher tiers that require patients to pay a greater share of the cost and older drugs and generics are placed in the least expensive tiers. For higher tiers, many insurance plans now require patients to pay a percentage of the drug's retail cost, called "co-insurance," rather than a flat co-pay of $20 or $50. Since many antiretroviral drugs used to treat HIV cost well over $1,000 a month, patients often can't afford the co-insurance payments.
When choosing among competing insurance plans, it's relatively easy to compare the monthly premium costs, plus deductibles and co-pays for doctors and other services. But patients are often not aware that drug formularies have multiple tiers and pricing levels; even if they are, information about them is not always readily available. Moreover, health insurers generally can adjust their formularies even while a policy is in effect.
Even before the Affordable Care Act and the health exchanges, insurers were requiring patients to pay more for medicine. Some insurers have excluded some costly medications from coverage altogether. Others have increased use of medication-management techniques that can have the effect of discouraging doctors from prescribing certain drugs, such as requiring doctors to seek pre-approval from the insurance company over and over again for the same patient — a process that can add hours to a clinician's week.
Dr. Howard Grossman, a primary care physician with a large HIV practice in New York and New Jersey, said that insurance companies have been trying for several years to maneuver patients onto cheaper, older drugs through such strategies. But the trend has accelerated this year, he said.
"They have priced some of the drugs so out of range that patients are forced, because of the price, to use one with a lot more side effects," he said. "This has been going on before the ACA, but it's picked up steam."
According to a recent article in the journal Health Affairs, almost a third of people with HIV were estimated to be uninsured, at least before the Affordable Care Act. Many have long accessed medical care and medications through an overlapping network of federal, state, and community-based agencies rather than through standard health insurance. Pharmaceutical companies have also created extensive assistance programs for HIV patients unable to afford the medications or the co-pays.
"Over the years, people with HIV didn't really have to deal with modern realities of the insurance system," said Dr. Grossman. "Now that they're getting regular insurance, they're having to deal with the same things people with other chronic illnesses have. Oncologists and cardiologists are having the same frustration, but we're not used to being the same as anyone else."
The ACA-mandated health insurance exchanges offer bronze, silver, gold, or platinum plans — and at each successive level, the monthly premiums are higher, but out-of-pocket cost-sharing, such as for prescription drugs, is lower. According to the ACA, health plans cannot use "marketing practices or benefit designs that have the effect of discouraging the enrollment in such plan by individuals with significant health needs."
When the Florida advocates analyzed silver plans offered by four companies on the state exchange, they found that all HIV drugs, including generics, were grouped in the highest and most expensive tiers. Other companies offered health exchange plans that spread HIV drugs among all the tiers.
"They say, 'We don't discriminate, we cover all the drugs,'" said Schmid, the AIDS Institute deputy executive director. "But our complaint is that all the drugs are in the highest tier, and that they're charging co-insurance rates that are exorbitantly high."
A spokeswoman for the U.S. Department of Health and Human Services said the complaint is "under review." When asked for comment, spokespeople at Cigna, Preferred Medical, and Aetna, which owns Coventry Health Care, all stated via email that the HIV formularies in their health exchange plans complied with federal health guidelines and standards. Humana did not respond to a request for comment.
In Illinois, public health advocates found similar problems as in Florida. In his warning to insurance companies, state insurance director Boron outlined his concerns not only about HIV drug formularies but also about medical management techniques such as "step therapy" — requiring patients to start on older (and presumably less expensive) antiretroviral drugs to see if they work before allowing them to access more expensive ones.
He warned as well against requiring doctors to repeatedly seek prior approval from the insurance company when writing prescriptions for a particular patient. "Because HIV is a chronic condition that requires continual treatment, an insurer may be found to discriminate if it redundantly requires pre-authorization for refills of HIV/AIDS medications without any justification," stated Boron.
Given the recent cost increases, said Jeff Berry, editor of the Chicago-based HIV treatment magazine Positively Aware, the drug company assistance programs have taken on even greater importance. Some now cover up to $400 monthly to help patients pay for the company's medications, yet many patients are not aware that these programs exist.
"We would hear stories of people who left their prescriptions at the pharmacy because they couldn't afford them," he said.