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Radar On Market Access: Remdesivir’s $3,120 Price Tag Stirs Debate

July 14, 2020

Gilead Sciences, Inc. recently revealed that for promising COVID-19 treatment remdesivir, it will charge $2,340 for a typical five-day, six-vial treatment course for people covered by U.S. government health programs and $3,120 for those covered by private insurance, AIS Health reported.

In an open letter, Gilead CEO Daniel O’Day argued that Gilead priced remdesivir “well below” its estimated value, considering it can save the U.S. health care system approximately $12,000 per patient by reducing the length of COVID-19 patients’ hospital stays.

Gilead Sciences, Inc. recently revealed that for promising COVID-19 treatment remdesivir, it will charge $2,340 for a typical five-day, six-vial treatment course for people covered by U.S. government health programs and $3,120 for those covered by private insurance, AIS Health reported.

In an open letter, Gilead CEO Daniel O’Day argued that Gilead priced remdesivir “well below” its estimated value, considering it can save the U.S. health care system approximately $12,000 per patient by reducing the length of COVID-19 patients’ hospital stays.

But not everyone is convinced by that argument.

“So they’re saying by shortening hospital stays, the system is going to save all these monies, but I always ask the question, ‘Why is it that the drug company should get to pocket all or some substantial portion of that savings?'” says Jack Hoadley, Ph.D., a research professor emeritus at Georgetown University’s Health Policy Institute. “That’s a savings we should accumulate for consumers, for payers [and] everybody else.”

Hoadley is not alone in those views. The advocacy group Patients for Affordable Drugs, in a June 29 statement, wrote that “Gilead’s price for remdesivir shows once again that we can’t trust Big Pharma to act responsibly — even in the face of a global pandemic.”

The U.S. government helped fund the development of remdesivir, and dexamethasone — a generic steroid — is priced at less than $1 per day even though it ‘showed promise for combating severe COVID-19 cases and reducing potential mortality rates,” the organization said.

The Institute for Clinical and Economic Review (ICER) also brought up dexamethasone in its statement. The U.S. price range of $2,340 to $3,120 is “is largely in line with ICER’s independent assessment suggesting that a price of approximately $2,800 would be reasonable in proportion to the added benefits for patients and the cost offsets in the health system now that dexamethasone is rapidly becoming standard of care,” wrote ICER President Steven D. Pearson, M.D.

Leerink analyst Geoffrey Porges, in a June 29 note to investors, pointed out that the U.S. commercial price set for remdesivir was below his firm’s expectations. Still, “we believe the disclosed [remdesivir] pricing is reasonable, and should provide significant value to the Gilead shareholders and still deflect much of the criticism the company might face in this emergency,” Porges wrote.

MMIT Reality Check on Acute Lymphoblastic Leukemia (July 2020)

July 10, 2020

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

According to our recent payer coverage analysis for acute lymphoblastic leukemia 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 acute lymphoblastic leukemia treatments shows that under the pharmacy benefit, about 49% of the lives under commercial formularies are covered with utilization management restrictions.

Trends: In April 2020, the FDA cleared an investigational new drug (IND) application for Autolus Therapeutics plc’s AUTO1, a CD19-targeting chimeric antigen receptor T-cell therapy for the treatment of adults with acute lymphoblastic leukemia.

Radar On Market Access: Upheld Transparency Rule Is Slated to Reshape Payer-Provider Negotiations

July 9, 2020

In another blow to an industry already beleaguered by the COVID-19 pandemic, a federal judge recently upheld a federal rule that requires hospitals to engage in unprecedented price transparency measures, AIS Health reported.

The rule would require hospitals to disclose the rates they negotiate with payers for all items and services they offer. It is slated to go into effect on Jan. 1, 2021, but the American Hospital Association (AHA) and other trade groups and health systems sued to block it.

In another blow to an industry already beleaguered by the COVID-19 pandemic, a federal judge recently upheld a federal rule that requires hospitals to engage in unprecedented price transparency measures, AIS Health reported.

The rule would require hospitals to disclose the rates they negotiate with payers for all items and services they offer. It is slated to go into effect on Jan. 1, 2021, but the American Hospital Association (AHA) and other trade groups and health systems sued to block it.

The crux of the plaintiffs’ argument in American Hospital Association v. Azar is that CMS exceeded its authority by redefining the “standard charges” that hospitals must disclose under the Affordable Care Act to include negotiated rates. But in a decision issued June 23, U.S. District Court Judge Carl Nichols determined that CMS’s interpretation of the statute was reasonable.

The AHA has already appealed the decision, and depending on how the D.C. Circuit Court rules on that appeal, the case could make it to the Supreme Court, says David Kaufman, a partner at Laurus Law Group LLC.

“Insurers today actually do have a pretty good sense of how hospitals are charging, but this is going to be a quantum leap forward for them in understanding the strategy that hospitals take in negotiating across insurance markets,” Dan Mendelson, founder of Avalere Health says regarding what will happen if the rule does take effect.

However, “the insurer will have more information, but I question whether they will have more leverage,” Mendelson says. “I think over time what this [rule] is likely to do is to drive more consistency in pricing — not necessarily lower prices across the board.”

Kaufman observes that the disclosure of hospitals’ negotiated rates may not have a uniform impact across different types of insurers.

“In certain ways, it’s a procompetitive kind of rule by providing more transparency,” he says. “However, large established insurers that have the advantage of broad networks with lower prices based on their large membership benefit by keeping their prices confidential. It helps them with providing better prices to large employers, etc. So by making those prices more transparent, it might ease barriers to entry [for] other insurers.”

Perspectives on MedImpact’s New Program to Accelerate Pharmacogenomics

July 9, 2020

With precision medicine an increasingly hot topic in health care, MedImpact is betting that a newly launched program — which reviews every drug prescribed to patients against their genetic profile — will simultaneously give the PBM a competitive edge and improve care, AIS Health reported.

In a Feb. 26 press release, MedImpact describes its new program as the industry’s first “any drug, any time, any prescriber” approach to pharmacogenomics (PGx).

With precision medicine an increasingly hot topic in health care, MedImpact is betting that a newly launched program — which reviews every drug prescribed to patients against their genetic profile — will simultaneously give the PBM a competitive edge and improve care, AIS Health reported.

In a Feb. 26 press release, MedImpact describes its new program as the industry’s first “any drug, any time, any prescriber” approach to pharmacogenomics (PGx).

“Pharmacogenetics, in the most basic sense, is looking at someone’s genes to determine their drug-metabolizing enzymes,” explains Emily Cicali, a clinical assistant professor at the University of Florida’s College of Pharmacy. For people who have lower levels of drug-metabolizing enzymes, certain medications may be less effective or ineffective, and for those have too much of those enzymes, that could overactivate drugs and “put people at risk for toxicity,” Cicali adds.

The concept of a PBM having a PGx program isn’t new, MedImpact acknowledges in its release. But up until now, most PGx programs generally operated along the lines of “one gene being tested for one drug at one point in time” to determine if there’s a potential conflict, says Karen Geary, the company’s vice president of strategy and innovation. MedImpact’s program, however, screens for genetic interactions with more than 240 commonly prescribed medications and then reviews all future prescriptions for potential drug-gene issues.

Michael Schneider, a principal at Avalere Health, says that if a program like MedImpact’s is able to significantly avert problems like adverse drug events, “then I think this type of analysis could have a big impact on the PBM industry and potentially become the standard of care.”

However, if genetic testing becomes more commonplace across wider swaths of the population, there could be downsides, he suggests. For example, the expense of large-scale genetic testing might trickle down from plan sponsors to consumers in the form of higher premiums.

Radar On Market Access: Reports Show Medicaid MCOs Are ‘Dominant,’ Increase Affordability

July 7, 2020

Two recent reports found that Medicaid managed care plans now enroll most Medicaid members, help keep costs and premiums low in the markets where they participate, and are competitive with commercial plans at the low end of the individual market in areas including network quality and benefit design, AIS Health reported.

One white paper was prepared by consultancy The Menges Group for America’s Health Insurance Plans (AHIP), and the other was authored by researchers at the Robert Wood Johnson Foundation (RWJF) and Urban Institute.

Two recent reports found that Medicaid managed care plans now enroll most Medicaid members, help keep costs and premiums low in the markets where they participate, and are competitive with commercial plans at the low end of the individual market in areas including network quality and benefit design, AIS Health reported.

One white paper was prepared by consultancy The Menges Group for America’s Health Insurance Plans (AHIP), and the other was authored by researchers at the Robert Wood Johnson Foundation (RWJF) and Urban Institute.

The Menges Group-AHIP white paper, which had a national scope, found that Medicaid MCO enrollment increased by 121% between fiscal years 2010 and 2018, from 26 million to over 56 million members, and that as of 2018, more than 75% of all Medicaid enrollees are members of an MCO, up from 50% in 2010. The report also found that, since 2017, capitated payments to MCOs have exceeded fee-for-service expenditures.

The RWJF-Urban Institute paper, which relied on case study surveys in Arkansas, California, Florida, New York, Ohio, and Washington state, concluded that MCOs offer coverage that is at least as good as commercial plans in the low end of the Affordable Care Act individual market.

“Many [stakeholders] feel there are no longer major distinctions between Medicaid and commercial insurers in the marketplaces. Most interviewees have positive perceptions of Medicaid insurers, crediting their ability to increase choice and affordability in the individual health insurance market,” wrote the paper’s authors.

Most of the surveyed stakeholders, which the paper says “included representatives from state departments of insurance, hospital associations, medical or primary care provider associations, insurance brokers, and consumer advocates,” believe that Medicaid MCOs have improved the level of competition in their state marketplace, and offer their members similar network quality to commercial plans.