PrEP approved as a no cost sharing service

Earlier this week, JAMA ** published the recommendation of the US Preventive Services Task Force that Preexposure Prophylaxis be a no cost sharing preventive service for some high risk populations.

Findings The USPSTF found convincing evidence that PrEP is of substantial benefit in decreasing the risk of HIV infection in persons at high risk of HIV acquisition. The USPSTF also found convincing evidence that adherence to PrEP is highly associated with its efficacy in preventing the acquisition of HIV infection; thus, adherence to PrEP is central to realizing its benefit. The USPSTF found adequate evidence that PrEP is associated with small harms, including kidney and gastrointestinal adverse effects. The USPSTF concludes with high certainty that the magnitude of benefit of PrEP with oral tenofovir disoproxil fumarate–based therapy to reduce the risk of acquisition of HIV infection in persons at high risk is substantial.

Conclusions and Recommendation The USPSTF recommends offering PrEP with effective antiretroviral therapy to persons at high risk of HIV acquisition. (A recommendation)

This is good news for individuals who will benefit from PrEP. It is good news for future individuals who will never be exposed to HIV because their counterfactual exposing partner never contracts HIV. It is good news.

One of the challenges of the recommendation is financial. PrEP, in the United States, is expensive and will not be off patent for several (or more) years. Expensive treatments that can be applied to many people are a technological or policy shock for insurers. We saw this with Solvaldi and the other Hep-C anti-virals in 2013-2014 where many insurers and other payers such as state Medicaid agencies attempted to pay for as few courses of treatments at high price levels while they waited for near substitutes to enter the market and bring down the effective price level.

The big problem for ACA regulated plans is that PrEP is not risk adjusted. The economic cost of PrEP is supposed to be baked into the underlying premiums with no transfers from insurers that cover proportionally few people with PrEP to insurers. But the problem is that the potential PrEP using population is not randomly distributed nor completely unpredictable. This leads to potentially bad incentives:

8/8 But in the short run if there is a requirement that a 4 or 5 figure year drug be prescribed with no cost sharing and no risk adjustment, insurers have strong motivations to avoid wanting to pay for the drug even if/when they have to. The avoidance toolbox is big and deep
/END

— David Anderson (@bjdickmayhew) June 6, 2019

Right now, someone under the age of 40 who is likely to use zero cost-sharing PrEP is a guaranteed money loser as their premiums won’t cover their PrEP costs net of no risk adjustment. Insurers don’t like to cover guaranteed money losers. They will cover folks with high cost conditions enthusiastically if the premiums are high enough or the combination of reinsurance and risk adjustment makes the proposition of covering a high cost individual not a money loser.

There are several ways insurers can be in a situation where they have to pay for PrEP but don’t want to pay for any more PrEP. The easiest one is to selectively pull out of some counties that are likely to have large potential PrEP populations. This makes the costs and increased premiums some one else’s problem. Another obvious way is to minimize PrEP prescriptions is to minimize the network of prescribers while also throwing up a paperwork minefield of pre-authorization, re-authorization and and random verification. There are other ways insurers in competitive markets will try to avoid getting hit with the new price/policy shock that feeds straight into premiums but these are the obvious methods.

PrEP is a good public health measure but it presents technocratic challenges on getting the risk adjustment right.

** JAMA. 2019;321(22):2203-2213. doi:10.1001/jama.2019.6390