Expect More From… Prior Authorizations!

Prior Authorizations, you either love them or hate them.  Regardless of your personal feelings on them, prior authorizations have been a mainstay of the pharmacy benefit industry in controlling costs.  Why are states across the country, though, implementing regulations to limit the usage of prior authorizations or defining how prior authorizations are administered? “Patients and medical professionals complain that prior authorization interferes with treatment, causes medical provider burnout, and increases administrative costs.” But according to a study performed by the National Bureau of Economic Research, “prior authorization in Medicare Part D actually reduces the use of prior authorized drugs by 25 percent and reduces overall Part D spending by 3 percent. It also found that savings from prior authorization exceed the overhead costs of administration by a factor of 10.” Given these documented savings, why are states continuing to promote regulation of prior authorizations?

In my opinion, the problem with prior authorizations is not the concept, but rather the execution. Like most things in the pharmacy benefit industry, this important cost containment mechanism has been bastardized.  According to a study published by KFF in 2023, the prior authorization “denial rate ranged from 3 percent for Anthem and Humana to 12 percent for CVS (Aetna) and Kaiser Permanente” for Medicare Advantage Plans in 2021.  If a prior authorization is going to be approved majority of the time, I would agree with proponents of prior authorization reform that the system needs to change.  When prior authorizations are administered as a true clinical program, and not simply a check box or rebate generation strategy, they can be very effective in not only reducing cost but also improving clinical outcomes.  We think that PBMs need to go back to prior authorization 101:

1. If the prior authorization request is most likely to be approved, there isn’t a need to have a prior authorization on the drug in the first place or the criteria is not stringent enough.

2. Prior authorization should only be required when there is a concern about inappropriate usage.

3. Prior authorization criteria should be indication based.

4. Attestations should never be allowed.  Documentation should be required.  If it is worth requiring prior authorization, it should be worth reviewing the details.

5. Dosing review should be part of the criteria.

6. Clinical criteria should always be based on the most relevant clinical evidence.  Often FDA approval is very broad and does not consider all the clinical evidence.

7. FDA accelerated approval drugs need to be updated regularly based on after market studies.

8. Given constant changes in the industry, lifetime approvals should never be made.

9. Renewal criteria need to be consistent with the initial approval criteria.

10. Trial and failure of the other therapy options, including diet or other support modifications, must be considered in the criteria.

11. Cost effective data should be included. It is not uncommon for the provider and/or prior authorization reviewer to be unaware of the cost differentiation compared to clinical outcomes for the indication under review.

12. An entire drug list, diagnosis and pertinent lab or imaging should be included. We need to review the case in its entirety. Reviewing a drug request in a vacuum may not optimize the patient's entirety of health.

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What I hear most often from opponents of prior authorizations, is that these programs get in the way of the doctor’s judgement.  I would respectfully disagree.  When administered appropriately, prior authorizations can be a resource to the doctors.  Doctors are inundated with information.  According to studies, it takes an average of 17-21 years for scientific discoveries to be implemented into medical practice.  It is virtually impossible for doctors to keep up with all the innovation.  Therefore, pharmacists play an important role in assisting doctors in understanding what is the most current drug protocol. Prior authorization decisions, when communicated effectively, can be a great resource for doctors, and can assist the doctor in administering the most appropriate drug therapy.

We need to expect more from the prior authorization process.  It needs to be used with precision and thoughtfulness. Prior authorizations are an important tool to not only control cost, but also to increase quality. The current “check the box” system that doesn’t cut it anymore.