Insurance Denials for Brand-Name Drugs Surge Between 2018 and 2024

A recent study published in JAMA reveals a significant rise in insurance denials for first-time brand-name prescription drugs that lack generic alternatives. Researchers from Johns Hopkins Bloomberg School of Public Health and the American Enterprise Institute analyzed over two million prescription attempts spanning commercial insurance, Medicare, Medicaid, and ACA marketplace plans between 2018 and 2024. The findings indicate that insurance rejections have surged by 67%, from 24.3% to 40.7% of initial brand-name prescription attempts during this period.

This alarming increase is largely attributed to the expanded use of utilization management rules, such as prior authorization requirements and step therapy protocols, designed to control escalating pharmaceutical costs. Nearly one-third of prescription denials resulted from formulary exclusions or insurer-imposed management rules, which often demand patients try alternative therapies before accessing the originally prescribed brand-name drug.

The study also highlights stark variation in rejection rates across therapeutic classes and insurance types. Incretin-based therapies for weight loss, including GLP-1 receptor agonists, faced an extreme 85% initial rejection rate, while oral anticoagulants had comparatively low denial rates near 6.7%. Marketplace exchange plans and Medicaid managed care exhibited the highest denial frequencies, with nearly half of all brand-name prescriptions initially rejected, whereas Medicare plans showed substantially lower rates.

Patients who eventually obtained their prescribed or alternative treatments experienced an average 12-day delay after rejection, and nearly half of those denied prescriptions never filled any drug in the same therapeutic category within 90 days. This raises concerns about the real-world impact of insurance barriers on timely access to necessary medications.

Researchers emphasize that these formulary-related denials occur downstream in the healthcare process, at point of pharmacy dispensing, thus not reflecting prescribers’ potential adaptation to insurance coverage constraints during initial prescribing. This disconnect may contribute to unexpected treatment delays and administrative hurdles for patients, pharmacists, and clinicians alike.

The authors suggest that integrating real-time insurance coverage information at the point of prescribing, alongside streamlined prior authorization protocols, could mitigate these barriers and reduce delays in critical treatments. However, they also caution against oversimplifying utilization management, which plays a crucial role in curbing drug spending, negotiating discounts, and promoting clinically appropriate prescribing.

While generics and biosimilars constitute 90% of prescriptions and only 12% of pharmaceutical spending, brand-name drugs continue to dominate costs, representing 88% of total spending despite accounting for just 10% of prescriptions. These dynamics underscore complex trade-offs inherent in formularies aimed at balancing cost containment with patient access.

In conclusion, this study illuminates the growing influence of insurance formulary restrictions on medication access in the United States. It calls for policy innovations that optimize utilization management without compromising patient care, ensuring that those prescribed brand-name drugs without generic equivalents can receive timely and effective treatment.