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MMIT Reality Check on HIV (Feb 2019)

February 22, 2019

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

According to our recent payer coverage analysis for HIV 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 HIV treatments shows that under the pharamcy benefit, more than 75% of the covered lives in commercial formularies have utilization management restrictions.

Trends: Contracting is prevalent for drugs in the same HIV grouping, with most activity focused on tiering preference. Patent expirations are expected for single agents. Via AIS Health.

Perspectives on California’s Plan to Move Medicaid Pharmacy Purchasing to FFS

February 21, 2019

Under the direction of its new governor, Democrat Gavin Newsom, California is planning to take control of the pharmacy benefit for all of the state’s Medi-Cal beneficiaries — the vast majority of which currently have that part of their care administered by private insurers and their PBMs, AIS Health reported. What’s more, the order directs state agencies to create bulk-purchasing arrangements for high-priority drugs and establish a framework for letting private businesses and insurers join the state’s buying pool.

Under the direction of its new governor, Democrat Gavin Newsom, California is planning to take control of the pharmacy benefit for all of the state’s Medi-Cal beneficiaries — the vast majority of which currently have that part of their care administered by private insurers and their PBMs, AIS Health reported. What’s more, the order directs state agencies to create bulk-purchasing arrangements for high-priority drugs and establish a framework for letting private businesses and insurers join the state’s buying pool.

The idea of the state’s Medicaid program shifting to an entirely fee-for-service drug benefits system is already sparking worries about what it will do to PBMs’ bottom lines.

“We suspect that the fee-for-service aspect [of the executive order] may have an adverse impact on PBMs and potentially MCOs that provide managed Medicaid services in the state,” RBC Capital Markets, LLC analyst George Hill wrote in a research note. Currently, California’s Medicaid managed care organizations contract with 10 different PBMs to administer the pharmacy benefit for 10.64 million managed Medicaid lives — which comprise nearly 90% of the state’s total Medicaid lives.

According to L.A. Care CEO John Baackes, one concern for managed care plans is the fact that carving out benefits makes it more difficult to coordinate care.

“I think one of the advantages of a managed Medi-Cal plan like ours is that for people who are in very difficult circumstances health-wise, we do provide an element of care management that’s important,” he says. “And if there’s an element of the benefit that we don’t control, then it’s awkward.”

Regarding the the concept of California starting a bulk-pharmaceutical buying program, Andrey Ostrovsky, M.D., former chief medical officer at CMS’s Center for Medicaid and CHIP Services and current CMO at Solera Health, says it could indeed help drive down prices, since the PBMs that currently serve the state operate independently.

But other experts aren’t so sure.

“If you’re negotiating directly with the manufacturers on drug prices, how’s the delivery system of that going to work, and how are the pharmacies, at the local level, going to be able to maintain a profit and not lose money?” asks Brian Anderson, a principal with Milliman, Inc. Just because a state can negotiate a large rebate from drug manufacturers doesn’t necessarily mean it’s negotiating a lower drug price, he adds.

Radar On Market Access: PBMs Prepare for Big Changes Tied to Part D Rebate Rule

February 21, 2019

Nearly two weeks after the Trump administration issued a proposed rule that would effectively overhaul the prescription drug rebate system, the dust has still not settled in the PBM sector as firms brace for a seismic shift in how they do business, AIS Health reported.

Nearly two weeks after the Trump administration issued a proposed rule that would effectively overhaul the prescription drug rebate system, the dust has still not settled in the PBM sector as firms brace for a seismic shift in how they do business, AIS Health reported.

The proposed rule would remove safe-harbor protections under the federal anti-kickback statute for rebates paid by drug manufacturers to PBMs, Part D plans and Medicaid managed care organizations. It would also create two new safe harbors: one for prescription drug discounts offered directly to patients, and one for fixed-fee service arrangements between drug manufacturers and PBMs.

If the rule is enacted, “the entire Part D and Managed Medicaid pharmacy management industry would have to change,” Mike Kolar, senior vice president and general counsel of Prime Therapeutics, LLC, tells AIS Health. “Prime, and other PBMs, will need to develop new tools and methods to continue to negotiate price on behalf of millions of members,” he adds.

What might these changes look like? In lieu of negotiating for rebates, PBMs might have to start negotiating up-front “discounts” with manufacturers that are reflected at the point of sale and begin working with pharmacies to ensure that these discounts are reflected in member transactions, Kolar says. “We would also need to adjust our relationships with manufacturers for services and data to fall under the requirements of the new safe harbor for PBM compensation.”

Kolar adds that Prime is “concerned about the adverse economic impacts of the proposal,” as it could raise Medicare Part D premiums and government program costs.

Dea Belazi, president and CEO of specialty-pharmacy-focused PBM AscellaHealth, says the new proposal, if enacted, “is going to be a revenue hit” for his company, “because it is dollars that come in that will no longer come in if this goes through.” But it’s certainly not going to put the PBM out of business, he adds.

Radar On Market Access: Express Scripts Reports Record Low Drug Trend Across Commercial Plans in 2018

February 19, 2019

For its first annual drug trend report as a part of Cigna Corp., Express Scripts Holding Co. said it had achieved a record low drug trend of 0.4% across its clients’ employer-sponsored commercial plans in 2018. Overall, the PBM reported savings of $45 billion for its clients last year, AIS Health reported.

For its first annual drug trend report as a part of Cigna Corp., Express Scripts Holding Co. said it had achieved a record low drug trend of 0.4% across its clients’ employer-sponsored commercial plans in 2018. Overall, the PBM reported savings of $45 billion for its clients last year, AIS Health reported.

The PBM cited “an unprecedented 0.3% decline” in per-beneficiary drug spending across Medicare plans. Overall, there was a 1.4% decrease in unit cost trend, which allowed clients to absorb a 1.1% increase in utilization, the PBM said. Oncology replaced diabetes as Medicare’s top therapy class by per member per year spend.

Express Scripts also reported falling unit drug costs for employer, Medicare and Affordable Care Act exchange plans. On the specialty side, the PBM said that although list prices for brand-name specialty drugs rose by 7.1% in 2018, specialty drug costs increased by a lower 2.1% for its employer-sponsored plans, 2.4% for its Medicare plans and 2% for its exchange plans.

“ESI’s report reflects a broader pattern that we are tracking industry-wide as it relates to drug trend,” says Josh Golden at Arthur J. Gallagher & Co.’s Solid Benefit Guidance.

“On the non-specialty side, the absence of any significant new blockbuster brands and the continued deflation of generics has offered plans some much-needed cost relief. These trends have helped offset the mounting cost and utilization increases that we are seeing for specialty products,” Golden says. “As a result of these opposing forces, trend is hovering in the low single digits. This is welcome news for plan sponsors.”

MMIT Reality Check on Rheumatoid Arthritis (Feb 2019)

February 15, 2019

According to our recent payer coverage analysis for rheumatoid arthritis (RA) treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for rheumatoid arthritis (RA) 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 RA treatments shows that about 73% of the covered lives under the commercial formularies are covered with utilization management restrictions.

Trends: With more biosimilars coming to market to compete against some of the older biologic-based drugs, an industry expert suggests that the RA market will see more competition. Via AIS Health.