The impact of clinical trial insurance coverage mandates on racial minorities and low income individuals

Abstract

Mandates are often used as a policy tool to decrease disparities in access to health treatments and services. The lack of insurance coverage for routine care costs associated with participating in clinical trials is often cited as a major barrier to clinical trial participation, especially for low income individuals and racial minorities who are highly cost-sensitive. This article examines if state mandates requiring health insurers to cover routine care costs for patients enroled in clinical trials helped reduce the gap in clinical trial access between the affluent and the poor and between whites and racial minorities. Using data on the locations of cancer clinical trials initiated in the US between 2001 and 2007 as well as Census data on income and race, we examine the effects of the policies on clinical trial sponsors’ location choices. Our analysis indicates that the policies helped increase availability of phase 2 clinical trials in areas with a high proportion of black residents, thereby partially mitigating race-based disparity in clinical trial access. We do not find any evidence that the policies helped alleviate income-based disparity in clinical trial access.

Keywords:

• clinical trials
• state reimbursement policies
• race disparities

JEL Classification::

• I18
• I10
• J15

Notes

¹ Interestingly, Gross et al. (2004) found that the mandates had an impact on patient enrolment in phase 2 trials, but not phase 3 trials. This is consistent with our finding of supply side effects in phase 2 trials but not in phase 3 trials.

² DiMasi et al. (2003) estimated that the cost of developing a drug from the start of phase 1 clinical trials to market approval was nearly $802 million in 2003.

³ According to ClinicalTrials.gov, clinical trials typically proceed as follows. (1) Phase 1: testing on small groups of human subjects to evaluate the initial safety of a new treatment. (2) Phase 2: testing on larger groups of people to generate more information about safety and benefits. (3) Phase 3: randomized experiments during which the performance of the new treatment will be compared to the performance of a current standard treatment or placebo. Based on results from the randomized experiments, the developer of the treatment applies for an approval by the Food and Drug Administration (FDA). (4) Phase 4: trials conducted for continued evaluation after the FDA approval.

⁴ To be precise, if a reimbursement policy is introduced in area z in January 2002, M_zt for the first quarter of 2002 will be one. If the policy is introduced in February 2002, M_zt for the first quarter of 2002 will be 0.66. If the policy is introduced in March 2002, M_zt for the first quarter of 2002 will be 0.33.

⁵  INC_z is measured in $100 000 and BLACK_z is measured in decimal points. Correlation between the two variables is –0.307.

⁶ We exclude phase 4 trials from the analysis because of their distinctive nature. Phase 4 trials, unlike the other phases, are conducted after an FDA approval.

⁷ We do not have such an ambiguity when the number of trials is the dependent variable. As different clinical trials are for different experimental therapies, firms do not conduct more trials due to low enrolment in each trial.