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Trends That Matter for Medicare Part D Costs

August 15, 2019

A recently published study in Health Affairs shines a light on a peculiar quirk of the Medicare Part D benefit structure: For some high-priced specialty medications, seniors might pay less out-of-pocket for brand-name drugs than their generic counterparts.

A recently published study in Health Affairs shines a light on a peculiar quirk of the Medicare Part D benefit structure: For some high-priced specialty medications, seniors might pay less out-of-pocket for brand-name drugs than their generic counterparts.

The study found that, assuming a 61% discount between brand-name and generic drugs, Part D beneficiaries with prescriptions costing between $22,000 and $80,000 per year would have lower out-of-pocket spending if they use brand-name drugs over a generic, AIS Health reported.

The graphics below show the annual out-of-pocket savings associated with generic drugs and the median-point-of-sale price differences of brand-name drugs and their generic counterparts.

Radar On Market Access: More Than 1,000 RM/AT Products Are in Pipeline

August 15, 2019

This past quarter saw two new gene therapies: Novartis AG subsidiary AveXis, Inc.’s Zolgensma (onasemnogene abeparvovec-xioi) received FDA approval May 24 for the treatment of spinal muscular atrophy, and bluebird bio’s Zynteglo (autologous CD34+ cells encoding βA-T87Q- globin gene) received conditional marketing authorization from the European Commission for transfusion-dependent beta thalassemia.

This past quarter saw two new gene therapies: Novartis AG subsidiary AveXis, Inc.’s Zolgensma (onasemnogene abeparvovec-xioi) received FDA approval May 24 for the treatment of spinal muscular atrophy, and bluebird bio’s Zynteglo (autologous CD34+ cells encoding βA-T87Q- globin gene) received conditional marketing authorization from the European Commission for transfusion-dependent beta thalassemia.

While only a handful of therapies in the broader regenerative medicine/advanced therapy (RM/AT) space are available globally, a new report shows that is likely to change, as there are more than 1,000 products in the pipeline, AIS Health reported.

The Alliance for Regenerative Medicine published the report, titled Quarterly Global Regenerative Medicine Sector Report: Q2 2019, on Aug. 1. It shows there are 1,069 clinical trials using specific RM/AT technologies, which include gene therapy, gene-modified cell therapy, cell therapy and tissue engineering. Ninety-four of those products are in Phase III trials.

While Zolgensma’s $2.125 million price for a one-time infusion makes it the costliest drug on the planet, many other newer RM/AT products are certainly not cheap. Though many manufacturers are offering various reimbursement schemes, including rebates if a therapy doesn’t work, other outcomes-based deals and multiyear pay-over-time payment options, experts note that many barriers exist in the execution of these strategies.

“In principle, spreading the cost over a five-year period and putting the cost installments at risk based upon efficacy is a good approach,” says Winston Wong, Pharm.D., president of W-Squared Group, about Zolgensma. “However, the devil is in the details. Do we have the systems in place that have the capability to administer a five-year contract?”

According to Wong, “From the manufacturer perspective, a value-based contract implies that no payment would be made if the patient relapses or passes on. Systems are not in place to have the ability to track the patient once therapy is administered.”

Radar On Market Access: Trump’s Drug Importation Plan Faces Significant Hurdles

August 13, 2019

Amid an ongoing outcry against rising drug costs, the Trump administration recently introduced two importation pathways to reduce what U.S. residents pay for drugs, AIS Health reported.

Amid an ongoing outcry against rising drug costs, the Trump administration recently introduced two importation pathways to reduce what U.S. residents pay for drugs, AIS Health reported.

Under the Safe Importation Action Plan, the first pathway would allow states, wholesalers and pharmacists to propose to HHS demonstration projects for importing certain drugs from Canada. Under the second pathway, drug manufacturers could import non-U.S. countries’ versions of their drugs into the United States.

What do health plan executives need to worry about with these two pathways? Not much, at least not in the next couple of years, according to Jigar Thakkar, Pharm.D., a managing director at FTI Consulting.

“There are so many hurdles that this isn’t something that’s going to happen tomorrow or in the next year or two,” Thakkar says. The hurdles include passage of legislation to allow biologics such as insulin to be imported and the ability of drugs imported from other countries to be tracked via FDA-TRACK, the FDA’s agency-wide performance system that monitors drugs during their journey from manufacturer to distributors to pharmacies.

Another significant hurdle is pushback from interest groups in Canada. Bloomberg News reported that the Canadian Medical Association and 14 other groups sent a letter to Canada Health Minister Ginette Petitpas Taylor protesting the Trump administration’s moves.

Deb Devereaux, senior vice president of pharmacy at Gorman Health Group, isn’t optimistic about the success of the first pathway where drugs would be imported to the United States from Canada. “The bottom line is the Canadian drug supply would be exhausted in 16 months with all the U.S. states trying to avail themselves of Canadian drugs,” she says.

MMIT Reality Check on Ulcerative Colitis (Aug 2019)

August 9, 2019

According to our recent payer coverage analysis for ulcerative colitis treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for ulcerative colitis treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

To help make sense of this new research, MMIT’s team of experts analyzes the data and summarizes the key findings for you. The following are brief highlights. To read the full piece, including payer coverage, drug competition and prescriber trends, click here.

Payer Coverage: A review of market access for ulcerative colitis treatments shows that under the pharmacy benefit, about 62% and 58% of the lives under commercial and health exchange formularies are covered with utilization management restrictions, respectively.

Trends: In April 2019, Highmark Inc. said it is targeting autoimmune diseases under a new outcomes-based contract with Takeda Pharmaceuticals U.S.A., Inc. for Entyvio (vedolizumab).

Perspectives on Electronic Real-Time Benefit Tool

August 8, 2019

CMS in a final Medicare Advantage and Part D drug pricing rule posted in May finalized the requirement that Part D sponsors implement an electronic Real-Time Benefit Tool (RTBT). While the tool offers the potential to accelerate electronic prescribing, improve formulary adherence and lower prescription drug spending, it may pose a heavy information technology burden for some plans and require effort on the part of plans to encourage prescriber adoption, AIS Health reported.

CMS in a final Medicare Advantage and Part D drug pricing rule posted in May finalized the requirement that Part D sponsors implement an electronic Real-Time Benefit Tool (RTBT). While the tool offers the potential to accelerate electronic prescribing, improve formulary adherence and lower prescription drug spending, it may pose a heavy information technology burden for some plans and require effort on the part of plans to encourage prescriber adoption, AIS Health reported.

According to the rule, each Part D sponsor must implement at least one RTBT capable of integrating with at least one prescriber’s e-prescribing system or electronic health record (EHR) to “provide prescribers who care for its enrollees complete, accurate, timely and clinically appropriate patient-specific real-time formulary and benefit (F&B) information (including cost, formulary alternative and utilization management requirements)” by Jan. 1, 2021.

For proponents of e-prescribing like Point-of-Care Partners, LLC, the new requirement is “really exciting,” says Tony Schueth, CEO and managing partner of the health IT management consulting firm. “We have been trying to include formulary in the e-prescribing process for a long time, and the way we were doing formulary in the past just wasn’t patient-specific enough. So we’re at a really important juncture in the evolution of electronic prescribing and the benefit information being integrated.”

Heidi Harmon, a senior consultant with Gorman Health Group, says pushing back the start date of the RTBT to 2021 was very good news for plans because it will involve a “massive IT undertaking.” CMS had originally proposed that sponsors have the tool ready by Jan. 1, 2020, but pushed back the deadline after hearing from concerned stakeholders, the majority of which suggested delaying the start date until an industry standard becomes available. Harmon also notes that the requirement that a plan have a tool that can work with one prescriber’s system could be interpreted as one prescriber group’s system.