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RETROVIR (AZT) COVERAGE: CALIFORNIA WARNS INSURANCE CARRIERS

Executive Summary

RETROVIR (AZT) COVERAGE: CALIFORNIA WARNS INSURANCE CARRIERS that the state "expects" insurance plans offered in the state that contain drug benefits to cover use of Burroughs Wellcome's AIDS drug. California Department of Insurance Commissioner Roxani Gillespie said in an April 24 letter to insurers that the state "will take strong exception to any interpretation of policy or plan language which denies AZT coverage on the ground that the drug is 'experimental,' not listed in a specified formulary, etc." Medi-Cal is providing coverage for AZT, which carries an estimated annual cost of between $7,000 and $10,000 per patient. The letter to insurers also urges those health insurance plans that do not routinely cover Rx drugs to make an exception "for humanitarian reasons" in the case of Retrovir. "We understand that some health benefit entities are contemplating covering AZT in their plans without drug benefits but, for anti-selection reasons, may not do so if it appears that their competitors will not cover the drug," Gillespie noted. "We particularly encourage insurers participating in multiple option group plans to consult with plan sponsors and other participating carriers about covering AZT in plans without Rx drug coverage." Gillespie suggested that AZT insurance coverage is advisable, despite the high costs, due to the "high political and social visibility of the insurance industry's reaction to the drug's availability." Gillespie warned that if private health benefit payers do not assume "a substantial fair share" of the financial responsibility for AZT costs, "the potential cost transfer to the public sector will require government to consider extra-ordinary measures."
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