Mandating coverage of biologic therapies for rheumatic disease: Where Evidence and Politics meet



In this issue of Arthritis Care & Research, we inaugurate an occasional series of commentaries entitled Policy Matters. In all of clinical research, our goal is to improve patient outcomes. Usually, that means focusing on the medical, demographic, and socioeconomic factors at the level of individuals with rheumatic diseases; sometimes, our scope of inquiry expands to encompass the impact of the communities in which they live. However, increasingly, the welfare of persons with rheumatic conditions is also affected by health policies through such diverse mechanisms as reimbursement decisions for specific treatments, insurance coverage, manpower, and NIH budgets (the foregoing list is hardly exhaustive).

Recently, a piece of legislation was introduced in California (SB913) that has the potential to alter the availability of biologic response modifying agents (BRMs) by mandating that health plans that provide coverage for one such agent include all on their formularies (a revised version would preclude a trial of another disease-modifying antirheumatic drug before use of a BRM). In this state, the California Health Benefits Review Program (CHBRP) provides evidence reviews of the medical effectiveness, cost, and public health impact of proposed health insurance mandates for the legislature. The analysts from the University of California who conducted the medical effectiveness review of SB913 for CHBRP provide a legislative history of the proposed law in this article. We hope that the readership of Arthritis Care & Research find this article informative as an exemplar of the policies that could dramatically alter the welfare of our patients.

According to Hippocrates, “Life is short, the Art is long, opportunity fleeting, experience delusive, judgment difficult.” Few have captured better the challenging and sometimes terrifying complexities of medical practice. Hippocrates' observations, however, do not seem to have dissuaded lawmakers from becoming involved in medical decision-making. At the federal level, Congress has ducked fundamental health care reform, but has boldly taken on problems that would make experts cross their eyes (including the prognosis of chronic vegetative states and the indications for late-term abortion). At the state level, legislatures have dealt more directly with constituents' concerns, especially perceived limitations imposed by managed care. By early 2005, California had 43 health insurance benefit mandates in statute. These mandates imposed requirements that health plans cover specific services for prevention, diagnosis, treatment, or rehabilitation. Although the financial impact of proposed mandates is assessed during the legislative process, until recently, California had no formal process for analyzing the costs and potential benefits of these proposals.

Recognizing this analytic gap, the California Health Benefits Review Program (CHBRP; available at was established by statute in 2002 (California Health and Safety Code, Section 127660, et seq). The purpose of the program is to provide the State Legislature with objective information regarding the proposed mandates: specifically the medical effectiveness of the covered services, the public health implications, and the economic consequences from the perspective of the state, insurers, health plans, and patients. Each analysis summarizes scientific evidence relevant to the proposed mandate, but does not make policy recommendations. The program is funded through an annual assessment of health plans and insurers in California. During the program's first full year of operation, the CHBRP analyzed 12 bills. As of this writing, only 3 were passed by both state houses, and 1 of those 3 was signed by the governor.

Health benefit mandates arise through a kind of political dialectic. The starting point is a medical intervention that is perceived to reduce mortality, improve quality of life, or provide greater patient convenience. The Hegelian “thesis” arises from a managed care industry that places limits on the availability of the intervention. The antithesis springs from a powerful constituency actively lobbying around a specific disease or condition. The synthesis is the health mandate. Biotechnologic agents or drugs that are used to treat rheumatic diseases represent the bio-political convergence of a potent, but expensive therapy, a group of payers and insurers who are deeply concerned about costs (frequently exceeding $1,000 per patient per month), and an army of activated patients. It was therefore not surprising when in 2005, Senator Joe Simitian introduced SB913 to address coverage of biologic response modifiers (BRMs) for rheumatic disease. As introduced, this bill would prohibit insurers from “identifying a preferred drug within the biologic class of drugs for the treatment of rheumatic diseases.” CHBRP assumed that SB913 would continue to allow existing pharmacy management strategies such as formularies, tiered cost-sharing, prior authorization, and step therapy. The impact of the legislation would be to require health plans to apply these requirements equally to each biologic drug for rheumatic diseases. Health care plans would have to carry all of the biologics on their formulary, which would likely have significant fiscal implications because high-volume purchasers often get a discounted price.

CHBRP's analysis concluded that the 4 BRMs currently available for treatment of rheumatoid arthritis are 1) effective in reducing joint pain and swelling, significantly halting bone degeneration and improving quality of life in patients with rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis; and 2) likely interchangeable in terms of effectiveness, although this conclusion is based on indirect evidence, because there are no head-to-head trials. CHBRP also projected an increase in total health expenditures in California of $11.4 million due to a 5% increase in the unit cost of self-injectable BRMs that would follow from health plans losing discounts or rebates from manufacturers because they would be unable to give one BRM “preferred” status over another.

Based on the CHBRP analysis and further discussion about the intent of the bill, SB913 was radically amended. The amended bill no longer dealt with the issue of ensuring the availability of biologics on all formularies, but instead prohibited any health plan from “requiring a step therapy pharmacy management protocol that makes a distinction between biologic and nonbiologic therapies for the treatment of rheumatic disease.” Functionally this means that health plans would have to allow doctors to prescribe a biologic agent before using nonbiologic disease-modifying drugs such as methotrexate. This substantive change in the proposed law prompted the CHBRP to issue a statement addressing the potential impact of the amendment. Clinical guidelines for the treatment of rheumatic disease clearly favor use of nonbiologic therapies as initial treatment, followed by biologic therapy for patients who fail to show improvement after a specified period of time. Therefore, CHBRP assumed that physician practice would change very little based on the new law and newly available coverage of biologic therapies. However, the proposed mandate could potentially increase the number of patients requesting and receiving biologic therapies as a first line treatment, due to an increase in direct to consumer advertising for the newly covered class of drugs.

SB913 has been held over into the second year of the current legislative session due to ongoing appropriations negotiations. The fate of the bill will most likely be determined by the fiscal analysis, rather than the medical effectiveness or public health impact of the mandated benefits. However, the outcome of this proposed legislation has implications for other therapies and conditions, as well as for future therapies of biologic origin. The number of such therapies is very likely to increase in the future due to recent and continued advances in biomedical science, and the precedent set by this legislation could potentially apply to hundreds of expensive treatments in the very near future.