Step therapy is the process under which a health insurance plan requires a patient to try one or more alternative—typically lower cost— drugs or treatment options before they can access the prescription which their physician has identified as the optimal treatment option for their diagnosis.
For AHIP, the association representing America’s health plans, the stepwise or tiered access in step therapy is an important tool for improving care and reducing costs in the face of rising drug expenditures. But detractorshave disparagingly characterized step therapy as it is currently employed as “fail first” and are calling upon state and federal governments to take action to regulate its use.
Clinicians argue that being forced to prescribe treatment options they have already rejected before they can prescribe their first choice of medicine limits their autonomy and puts cost-cutting before clinical evidence. Many have joined with patient advocacy groups in contending that step therapy harms patients by delaying effective treatment.
The practice
Like many utilization management strategies, step therapy, also known as step edits, originated in the 1980s. The logic of its sequential prescribing is easily demonstrated with an example from the headlines: insurers reasonably expect that a provider will see how a patient newly diagnosed with Type 2 diabetes responds to metformin which costs less than $10 for a month’s supply before prescribing semaglutide, which can cost over $1,000 a month.
Yet a variety of factors—including media attention to the latest drug—can influence both patient expectations and provider behavior.
Step therapy, health plans insist, helps to keep prescribing both objective and cost-effective. To demonstrate its potential, they point to a study in which a step therapy program for the prescription of blood pressure medications led to a 13 % cost savings.
A 2021 review of data from 17 health plans found that step therapy was applied in 38.9 % of drug coverage policies. The extent and frequency of its use varies across plans, diseases, and, of course, drugs. Step therapy has been identified as the most common method employed by plans in restricting access to specialty drugs, which have been identified as a key driver of rising drug expenditures.
Originally unique to commercial insurance, step therapy was subsequently adopted by some Medicaid programs. Until 2018, its use was generally not allowed in Medicare.
In 2012 the Centers for Medicare & Medicaid Services issued a memo prohibiting the imposition of mandatory step therapy for access to Part B drugs and services in Medicare Advantage (MA) organizations, unless also required through Original Medicare.
This policy was rescinded in 2018 when, acknowledging step therapy as a “recognized utilization management tool,” CMS specified that (MA) plans could “use step therapy for Part B drugs, beginning in 2019, as part of a patient-centered care coordination program.”
Clinicians’ perspectives
A survey of clinically active physicians funded by the American Board of Internal Medicine found that a majority recognized the potential of step therapy to reduce drug expenditures and to improve medication usage. However, most respondents objected to the way step therapy policies are currently implemented.
While family medicine doctors and general internists are more inclined to accept step therapy as a necessary, if inconvenient, mechanism for cost containment, specialists—including endocrinologists, oncologists, and cardiologists—are more likely to question the legitimacy of step therapy mandates.
For Orly Avitzur, MD, MBA, FAAN, immediate past president of the American Academy of Neurology, there is no question. She argues that “(s)tep therapy requirements can cause unnecessary and often harmful delays in care for people with neurologic conditions.”
And there is data to support this assertion. Research has shown that delays in delivery of disease modifying therapies for such diseases as multiple sclerosis can result in central nervous system damage.
Step therapy’s potential for harm through optimal treatment delay has also been documented in the treatment of inflammatory bowel disease (IBD). Research shows that prolonged use of ineffective agents in patients with IBD including Crohn’s disease (CD) and ulcerative colitis (UC) can cause irreversible structural bowel damage. Yet, many health insurance plans require gastroenterologists to prescribe corticosteroids and immunomodulators in the early stages of IBD before progressing to biologics such as anti–tumor necrosis factors (anti-TNFs)—despite their proven efficacy.
There are examples of harm due to optimal treatment delay across specialties. Delays in the delivery of biologics for the treatment of rheumatoid arthritis can lead to permanent joint deformities. Delays in treatment for breast cancer result in lower survival rates. Delays in access to effective prescriptions can cost patients with dermatological conditions such as psoriasis time away from work or school. And step edits for atypical antipsychotic agents can disrupt treatment for patients with schizophrenia.
And, while patient outcomes are of paramount importance, step therapy also has important implications for a healthcare workforce facing mounting administrative burdens. Barbara McAneny, MD, an oncologist and past president of the American Medical Association, has stated unequivocally that step therapy is “bad for the patient.” She also argues that it is “bad for the doctor, because one of the things that contributes to physician burnout is having to argue for every single thing your patient needs.”
Conflict with medical ideals
Critics contend that, by imposing treatment regimens, step therapy is in direct conflict with two key principles of modern healthcare: health equity and patient-centered care.
While a treatment plan comprising multiple rounds of a lower cost infusion or intravenous therapy might look more cost effective on paper than a single dose of a new biologic, step therapy mandates rarely consider the unintended consequences of treatment mandates or social determinants of health.
By contrast, an individual physician working with a low-income population in a rural or frontier setting hours from a major medical center might immediately recognize that transportation issues, cultural mores, and work or family obligations may prevent their patient from being able to make multiple trips to a treatment facility.
Similarly, physicians are positioned to identify which patients are better prepared to receive either oral or intravenous treatment. These personal assessments of a patient’s circumstances are particularly important when attrition rates for patients undergoing treatment for gastric cancer and multiple myeloma can range over 50%.
The appointment an individual patient can keep and the treatment plan to which a patient can adhere are, critics of step therapy maintain, more valuable than treatment mandates based upon statistical averages.
In its “one size fits all” approach to medication, step therapy is also antithetical to the emerging science of precision medicine. While step therapy reduces treatment to statistical averages, precision medicine takes into account the numerous factors which make an individual unique, including their genome, environment, and microbiome.
PBMs
Pharmacy benefit managers (PBMs), the third-party administrators which manage prescription drug benefits for health plans, exercise singular influence in the development of step therapy protocols and requirements. Through their price negotiations and rebate agreements with drug manufacturers, PBMs are positioned to determine where drugs will be placed on a plan’s formulary. They may also negotiate directly with the pharmacies which dispense these drugs.
The complex and opaque nature of the PBM system can make tracing how this influence is wielded difficult to trace. But the market penetration of PBMs suggests that their impact is significant. In 2021, three PBMs—CVS Health, Cigna (through Express Scripts), and UnitedHealth Group (through OptumRX—managed 80% of the prescription claims in the United States.
Patient advocacy
Patients who feel that they have been harmed by step therapy requirements have leveraged social media, the internet, and traditional media to condemn the practice. While some researchers have argued that these personal anecdotes are not properly generalized to the larger population, they can be particularly effective.
In a 2016 op-ed in the Boston Globe an ulcerative colitis patient who had been required to wait for the biologic therapy prescribed by his physician described step therapy as “(a) medical therapy that’s no therapy at all.” His account of undergoing a colectomy at the age of 22 continues to be employed in efforts to pass step therapy reform at both the state and national levels.
Regulation and legislation
To date, 36 states have implemented some form of step therapy regulation specific to either fully-insured employer plans or individual and small group plans (i.e. Exchange plans).
Rather than call for the elimination of step therapy, proponents of step therapy reform maintain that step therapy restrictions must be aligned with the most current clinical guidelines, even in a constantly changing medical landscape. They also argue for greater transparency in the development of step therapy protocols to reduce the potential for step therapy guidelines being influenced by rebate agreements.
But health plans are pushing back. In an amicus brief submitted to the Supreme Court in the case of Rutledge v. the Pharmaceutical Care Management Association, the Academy Of Managed Care Pharmacy, whose members include health plans and pharmacy benefit managers, argued that State regulations dictating how pharmacy benefit plans are to be administered “undercut the ability of managed care pharmacy professionals both to develop and to deploy these clinically beneficial and cost-saving measures.”
The Safe Step Act of 2023 (H.R. 2163/S. 464) would amend the Employee Retirement Income Security Act (ERISA) by requiring group health plans to establish exceptions to step therapy protocols in specified cases. Among these would be instances in which delay of effective treatment could result in “severe or irreversible consequences.” In an important step towards health equity, the bill would require health plans to consider patients’ “documented physical or mental characteristics.”
With bipartisan support and the backing of the American Medical Association and dozens of medical specialty organizations, the Safe Step Act could pass in both chambers.
For some step therapy reform and the end of “fail first” requirements cannot come soon enough. As one oncologist has observed, there are medical specialties in which, “you don’t have the luxury to fail because failing there can mean life threatening or death.”