Impact of Prior Authorizations on Topical Dermatological Prescriptions

Prior authorizations (PAs) present cost-saving for insurance companies but increase administrative time and cost burden for practices and delay treatment for patients. When PAs are required, only 52.8% of patients initiate treatment, dropping to <15% with PA denial [1]. Expensive copayments are also barriers. Patient Assistance Programs (PAPs) from manufacturers may reduce copayments in cases of inadequate insurance. However, PAPs are not available for most topical non-biologics, may involve multi-step PA processes, and may have limitations on number of dollars or times used per year. 

In the United States, patients with high medication costs can obtain coupons through prescription price tracking companies such as GoodRx [2]. Drug coupons can be obtained irrespective of patients’ insurance coverage, financial status and can be applied to any medications. GoodRx prices can be found on the company’s website while some electronic health record systems even display the GoodRx price when prescribing. However, the coupons are pharmacy-chain specific, thus the coupon and prescriptions must be sent and filled accordingly. Since all patients are eligible for discount coupons, are PAs still worthwhile?

We performed a retrospective review of prescribed non-biologic topical dermatologic medications, PA requests, and copayments at Tufts Medical Center (TMC) from 10/1/2019 to 10/1/2020. This study was approved by the TMC Institutional Review Board.

15,438 non-biologic medications were prescribed, of which 10,879 were topical prescriptions and 590 (5.4%) required PAs. PAs were performed by our central pharmacy team which typically yields a higher approval rate of 72.4% [3]. Pharmacy technicians at TMC spend on average 30 minutes processing, submitting and following up on each non-biologic PA. Utilizing national mean wage plus benefits for a pharmacy technician of $22.25/hr, we estimate each PA cost as $11.13 [4], excluding appeals and peer-to-peer communications requiring more costly physician time. For the patient, paying a co-pay is almost always cost beneficial except for three medications: hydroquinone, benzoyl peroxide, and imiquimod for which the coupon price was less than the co-pay price (Table 1). 

Table 1: Prescription rates, prior authorization rates and copayment prices of non-biologic topical agents in a 12-month period.

^†OTC

In a 2012 study, patient median Willingness to Pay (WTP) for dermatology prescriptions to control disease was reported as $30/month for all income groups [5]. Accounting for an average inflation rate of 1.94%/year, this equates to $35.75 in 2021.Using WTP as a threshold, 62.9% of the topical medications requiring PAs had coupon prices below patient’s median WTP. The average price difference between co-pay and discounted coupon rate was $10.09, less than the PA cost. Of note, 100% of topical steroids were within the WTP with an average price difference of $8.39. Limitations include the retrospective design, single academic center and drug prices subject to market fluctuations.

Overall, when the coupon price is less than the copayment, patients and the practice would benefit by avoiding treatment delays and PA costs through use of a coupon. If the coupon price greatly exceeds the copayment, completing the PA or switching to a covered prescription is ideal. However, additional consideration is needed when the coupon price is below the WTP. Although the PA will save the patient money and allow them to pay towards their deductible, the lack of guaranteed approval, delay in filling, risk of non-adherence, time and cost to the practice, and potential decline in patient satisfaction should be considered. Conversely, notable downsides of GoodRx are continuous price and vendor fluctuations, requiring a search at the time of each prescription. Thus, if GoodRx pricing is not embedded within the EHR workflow, it may still cause practices extra time during critical, high volume, in-clinic time which would need to be considered. Evaluating common topical medication drug-coupon prices compared to co-pay costs may help practitioners decide how best to manage their practices.

Reviewed and approved by Tufts Health Sciences Institutional Review Board; approval# 00001160

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2. Hong M, Shcherbakova N (2021) Comparison of Discounted and Undiscounted Cash Prices for Cardiovascular Medications by Type of US Community Pharmacy. J Gen Intern Med 36: 114-120.
3. Popatia S, Flood KS, Golbari NM, Patel PV, Olbricht SM, et al. (2019) Examining the prior authorization process, patient outcomes, and the impact of a pharmacy intervention: A single-center review. J Am Acad Dermatol 81: 1308-1318.
4. USA Bureau of Labor Statistics (2021) Occupational Employment and Wages. U.S. Bureau of Labor Statistics Website, USA.
5. Seidler AM, Bayoumi AM, Goldstein MK, Cruz PD Jr, Chen SC (2021) Willingness to pay in dermatology: assessment of the burden of skin diseases. J Invest Dermatol 132: 1785-1790.