A recent study in Health Affairs found that payers, pharmaceutical manufactures, health care providers, and patients incur approximately $93.3 billion in annual costs on implementing, contesting, and navigating drug utilization management programs. Drug utilization management is a collection of cost reduction techniques and programs used by health insurers. They often involve restricting access to medications (e.g., prior authorization and step therapy) or shifting cost-sharing burdens to patients (e.g., nonmedical switching and copay accumulator programs). As a result, these policies can limit patient access to medically necessary treatments.
The study found that, in 2019:
- Patients spent nearly $35.8 billion on drug cost-sharing even after taking advantage of copay assistance programs;
- Health care providers spent nearly $26.7 billion on interactions with payers on behalf of their patients;
- Pharmaceutical manufacturers spent $24.8 billion on administrative programs, direct financial support, and drug donations related to drug utilization management; and
- Payers spent $6 billion on the administration of drug prior authorization programs.