Imagine a drug that is approved for the treatment of moderate-to-severe schistoplasia (a made up disease). This is the official label and has been vetted by regulators after a careful review of the safety and efficacy data provided by the manufacturer.

Let's put aside the fact, for a moment that we continue to question the value of randomised control trials as the sole foundation for drug approvals as that is another column on its own. Now imagine that the manufacturer of the drug that treats moderate-to-severe schistoplasia actively promotes its drug on the basis of this label. And imagine further that clinicians see value in using this drug for their patients who have moderate-to-severe schistoplasia because it has a better safety profile, is cheaper than some pricier biological options or brings with it a lower burden of illness by virtue of no ongoing lab monitoring. Then let's suppose that private payers (insurance companies) decide that they are going to reimburse patients whom they cover within their insurance pool only for severe schistoplasia (presumably because the prevalence of moderate schistoplasia is so large that there would be too many patients that they'd have to cover and ultimately pay for).

It is one thing for insurance companies or pharmacy benefits managers (PBMs) to kick and scream about the cost of $84,000 per year hep C treatment regimens or six figure oncology therapies and to try and negotiate lower costs because they have to pay for everyone and the budget impact would be staggering. Most of us can intuitively understand that. It's quite another to re-interpret the terms of market authorisation (i.e. the label) and effectively say: 'We realise this drug is approved for moderate-to-severe schistoplasia but we're only going to reimburse the treatment for severe patients.'

If an insurer covers a drug it should be covered according to the label. Full stop

A shell game is notorious for the use of literal or figurative 'sleight of hand' in which, typically, the game is rigged to move or hide a ball during play and replace it as required. The underpinning of a shell game is that only the person moving the shells knows that the game is rigged. The players assume that the game is being played legitimately and that they have a chance of winning. The parallels to our respective healthcare systems around the world are striking. And disheartening. Disheartening because the figurative sleight of hand leaves both providers and patients frustrated and confused. And more importantly, because this sleight of hand denies patients the opportunity to benefit from therapies that presumably their provider, who is the best judge of treatments that can benefit their health, has chosen for their disease state.

Insurance coverage
If a drug is approved for a certain treatment and has been given clearance by the highest authority in the land (FDA, EMA, etc.), it is inconceivable that an insurance company can be allowed to arbitrarily decide if they are going to cover the drug according to its label or in a more restrictive fashion. If the insurance company decides to cover the drug, it should be covered according to the label. Full stop. There can be no 'end runs' around the label. In fairness to the insurance companies, sometimes the employers who select the extent and nature of plan coverage for their workforce will dictate to the insurance companies (or benefits consultants) the degree of financial exposure or risk they are willing to take on as part of the employer-sponsored plan that is offered to employees. Either way, in my view, this has to stop. The manufacturers will say that they will (for the most part) take what they can get on the private side. That they don't want to rock the boat and that any reimbursement is better than no reimbursement. But I say we're rewarding bad behaviour.

Let's remember that health insurance is designed to reimburse treatment costs. It doesn't (and can't) restore actual health status. At its core, health insurance is simply the pooling of wealth to allow for the compensation of loss arising from an adverse event (illness). It should not act as more. We can talk about the real 'demand side' issues like moral hazard and adverse selection that can potentially lead to health insurance market failure but, ultimately, those factors are a just a part of the equation. When private health insurers start to infringe into the arena of interpretation, things start to get very messy.