Step therapy exceptions (Sections 3381 and 3591) — scope and exception process
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Clarifies Delaware insurers' obligations under 18 Del. C. §§ 3381 and 3591 for step therapy exception processes, and limits the subsection (e) exception by specifying it does not apply to biologics or biosimilars; applies to insurers, health service corporations, and managed care organizations issuing plans in Delaware.
The Department clarifies that the statutory subsection allowing carriers to require an AB‑rated generic prior to covering the equivalent branded prescription drug does not apply to biologics or biosimilars.
Coverage Criteria and Scope
Step Therapy Exception Scope
Carriers must grant exceptions and maintain a process as required by statute; the narrow statutory exception in subsection (e) is limited as follows.
From Department bulletin clarifying scope of subsection (e)
The statute includes a narrow exception in subsection (e) that permits an insurer, health plan, or utilization review entity to require a patient to try an AB‑rated generic equivalent before providing coverage for the equivalent branded prescription drug. This allowance is limited to conventional brand/generic substitution as written in the statute and does not create broader authority to impose alternative-step requirements beyond that scope.
Specifically, carriers may rely on subsection (e)(1) only to require an AB‑rated generic equivalent prior to covering the equivalent branded prescription drug. The Department clarifies that this subsection does not authorize requiring an AB‑rated generic (or any substitute) in circumstances not contemplated by the statutory language.
Provider Actions, Prior Authorization, and Denials
Follow statutory prior‑auth/step‑therapy framework; do not treat biologics as generics
Prior authorization and step therapy exception processes must be implemented consistent with 18 Del. C. §§ 3381 and 3591; carriers must not treat biologics as having AB‑rated generic equivalents when applying the subsection (e)(1) allowance.
- Maintain exception processes required by statute
- Do not apply (e)(1) to biologics or biosimilars
Limit (e)(1) to AB‑rated generics for branded drugs (not biologics)
When applying step therapy, carriers may require a patient to try an AB‑rated generic equivalent before covering the equivalent branded prescription drug only where the statute’s (e)(1) language plainly applies; that statutory allowance does not authorize requiring biosimilars or treating biologics as AB‑rated generics.
- Limit use of (e)(1) to traditional brand/generic substitution scenarios
- Do not extend (e)(1) to biologic/biosimilar relationships
Maintain clear step‑therapy exception process and provider override
Carriers must maintain a clear, accessible process for requesting step therapy exceptions and allow providers to request an override when step therapy is not medically appropriate, consistent with 18 Del. C. §§ 3381 and 3591.
- Provide a transparent exception-request mechanism
- Permit provider overrides based on medical necessity
Avoid denials for biologics based on misapplied (e)(1)
Do not deny step therapy exception requests for biologic drugs by citing subsection (e)(1); biologics are not ‘branded prescription drugs’ with AB‑rated generic equivalents, so (e)(1) is not a lawful basis to require a different biologic or biosimilar.
- Avoid invoking (e)(1) to deny biologic exception requests
- Recognize biologics lack AB‑rated generic equivalents
Step Therapy Protocols and Implementation
| Requirement | Applies to AB‑rated generic equivalents? | Applies to Biologics / Biosimilars? |
|---|---|---|
| Carriers must implement step therapy protocols consistent with 18 Del. C. §§ 3381 and 3591, including a clear and accessible process for requesting exceptions and allowing provider overrides when step therapy is not medically appropriate. | ||
| Yes — where the statute explicitly contemplates conventional brand/generic substitution, carriers may require a patient to try an AB‑rated generic equivalent before covering the equivalent branded prescription drug under subsection (e)(1). | ||
| Not covered by subsection (e)(1) — biologics do not have AB‑rated generic equivalents; carriers must not apply the (e)(1) AB‑rated generic requirement to biologics or biosimilars. |
Key Definitions
Background and Legal Context
Delaware law (18 Del. C. §§ 3381 and 3591, enacted by HS 1 for HB 105) establishes a standardized, patient‑centered framework for step therapy protocols that requires carriers to maintain a clear and accessible process for requesting exceptions and to identify clinical circumstances where an exception must be granted. The statutes preserve a health‑care provider’s clinical judgment by allowing providers to request an override when step therapy is not medically appropriate for a particular patient.
The Department emphasizes that this framework differentiates traditional brand/generic substitution from biologic/biosimilar relationships: biologics are not "branded prescription drugs" with "AB‑rated generic equivalents," and therefore the statutory subsection permitting an AB‑rated generic trial does not apply to biologics or their biosimilars.
Biosimilars — Specific Guidance
Do not treat biosimilars as AB‑rated generics under (e)(1)
Carriers should not expand subsection (e)(1) to treat biosimilars as AB‑rated generic equivalents or require biosimilars in place of prescribed biologics; the Department makes clear this alters the statute’s plain language and is inappropriate when implementing Sections 3381 and 3591.
- Do not require biosimilars in lieu of biologics under (e)(1)
- Interpret (e)(1) according to its plain statutory scope
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