RADAR on Drug Benefits

In Blow to PBMs, CMS Floats Reform of Part D Price Concessions

As part of a sweeping new Medicare Advantage rule, CMS recently proposed a policy aimed at reforming a reimbursement system that local pharmacies have long claimed is straining them to the breaking point. PBMs, on the other hand, argue that the proposal could hamper value-based contracting in Part D and potentially increase Medicare spending.

At issue are arrangements in which Part D plan sponsors can recoup money from pharmacies for dispensed drugs if the pharmacies do not meet certain metrics. Generally speaking, these payments to plan sponsors are known as price concessions, and when assessed retrospectively — as they currently are — they are counted as direct and indirect renumeration (DIR).

PBMs Will Face Pressure From Transparency Rules, Startups

This year, PBMs will continue to face growing pressure from plan sponsors, regulators and policymakers to prove that they deliver value and keep drug costs down — and could face additional legislative or regulatory challenges to the way they do business. Meanwhile, investors are likely to put even more capital into startups that challenge the traditional pharmacy benefit paradigm, and the post-pandemic boom in risk-based contracting could expand into pharmacy benefits.

Federal and state regulators have increased scrutiny on PBMs in recent years. In particular, state efforts to regulate PBMs were buoyed by the Supreme Court’s 2020 decision in Rutledge v. Pharmaceutical Care Management Association (PCMA), a lawsuit in which the justices held that states were not in violation of the Employee Retirement Income Security Act of 1974 (ERISA) in attempting to regulate the rates at which PBMs reimburse pharmacies. According to the National Academy for State Health Policy (NASHP), a think tank and policy advocacy group, so far this year 42 states considered 111 bills relating to PBM regulation in 2021. That activity is likely to continue in 2022.

Payer Groups Applaud CMS Coverage Decision on Aduhelm

CMS on Jan. 11 issued its long-awaited proposed National Coverage Determination (NCD) for Aduhelm (aducanumab), the Alzheimer’s drug that has been the subject of controversy since the FDA approved it last June. In what officials acknowledged was an unusual decision, CMS said Medicare will cover Aduhelm — and any other FDA-approved monoclonal antibodies that target amyloid plaques — only for people who are enrolled in qualifying clinical trials.

Health insurer trade groups praised the decision, which comes after Aduhelm manufacturer Biogen cut the price of the drug approximately in half in a bid to encourage both provider uptake and payer coverage.

As Omicron Surges, U.S. Struggles With Booster Rate

On Jan. 10, the U.S. reported 1.35 million new coronavirus cases as the highly contagious Omicron variant swept across the nation, breaking the previous daily record of 1.03 million. While a COVID-19 vaccine booster could increase immune response, the Centers for Disease Control and Prevention’s data show that only 36.7% of fully vaccinated people have received a booster dose nationwide, as of Jan. 11, 2022. Doubling the pace of booster vaccinations per day could prevent more than 41,000 deaths and 400,000 hospitalizations by the end of April, according to a recent analysis by The Commonwealth Fund.

New Drugs for Asthma, Kidney Disease, HIV Are On the Horizon

A new biologic for severe asthma, a drug for anemia related to chronic kidney disease (CKD) and a long acting pre-exposure prophylaxis (PrEP) for HIV-1 are among the first-in-class therapies featured in OptumRx’s Q1 2022 Drug Pipeline Insights Report. In addition to these new drugs, the PBM also calls attention to the likelihood of more COVID-19 vaccines and treatments receiving full approval and additional uses in 2022.

Tezepelumab (brand name Tezspire) was approved by the FDA for maintenance treatment of severe asthma in December 2021. Many biologics for severe asthma are already on the market, but these drugs target asthma subtypes determined by baseline blood eosinophil counts, according to the OptumRx report. On the other hand, tezepelumab, developed by AstraZeneca and AmGen Inc., has been developed with a broader indication.

News Briefs: Dept. of Justice to appeal 340B ruling | January 13, 2022

New drugs are becoming less expensive to bring to market and more profitable at launch, according to a new Deloitte Ltd. white paper. “Cost to bring an asset to market has declined over the past three years, as peak sales forecasts increase,” the report says. “The combined cohort’s average cost to develop an asset was $2,006 million, a decrease of $370 million from 2020....This decrease in 2021 compared to 2020 is due mainly to the overall increase in the number of assets in the late-stage pipeline.” However, the report also notes that this figure is “an increase of $710 million from 2013.” In addition, the cycle time for drug development has increased, especially since the start of the pandemic.

New Hampshire is the latest state to settle its suit against Centene Corp, accepting $21 million from the Medicaid-focused carrier. More than a dozen states have sued the health insurer, accusing Centene of mismanaging their Medicaid programs’ pharmacy benefits. As with the other settlements, in the New Hampshire agreement Centene denied it was liable for any wrongdoing or violations of federal or state statute. The insurer has paid out more than $241 million in settlements with Arkansas, Illinois, Kansas, Mississippi and Ohio out of the $1.25 billion it set aside earlier this year to settle such suits.

Drug Price Reform May Be Doomed Without Standalone Bill

Drug pricing reform hit another major roadblock on Dec. 19, as Sen. Joe Manchin (D-W.Va.) said he would not support the Build Back Better Act (BBBA) in its current form. While drug pricing reforms are more likely than many of the dozens of policies included in the bill to pass Congress, D.C. health care insiders tell AIS Health that there still are barriers that could prevent such provisions from ever making it through the Senate.

The BBBA is a massive package that includes most of President Joe Biden’s domestic policy agenda. In its latest form, the bill would cost in the neighborhood of $2 trillion. Manchin, a centrist, has objected to the large price tag. The Senate has an even partisan split, meaning no member of the Democrats’ caucus can vote against the BBBA, as all the chamber’s Republican members have come out against it — giving Manchin (and each other member of the Democratic caucus) an effective veto over the bill.

What Will Be Impact of Allowing Abortion Pill to be Mail-Ordered?

Earlier this month, as the debate over legal abortion in the U.S. intensified, the FDA removed a requirement that the pregnancy-ending drug mifepristone be dispensed only in clinics, medical offices and hospitals. That move will effectively open the door for “certified prescribers or pharmacies” in states that haven’t already banned the practice to dispense mifepristone by mail.

Experts tell AIS Health, however, that there are more questions than answers about how those loosened regulations will ultimately affect patient access to the controversial drug, as well as how industry players such as health plans and PBMs will be affected.

Aduhelm Price Cut May Not Sway Private Payers’ View of Drug

Since the FDA greenlit the Alzheimer’s drug Aduhelm (aducanumab) in July under the accelerated approval program, concerns over the drug’s hefty price tag and overall effectiveness have been mounting. Now, the drug’s manufacturer, Biogen Inc., has cut the price approximately in half. One expert tells AIS Health that the move may cause private insurers to view the drug slightly more favorably, but they’re still likely to impose coverage restrictions on it. And a health plan trade group signaled that it isn’t impressed by the price cut.

After all, the furor surrounding Aduhelm is not all about price. “The clinical evidence that the FDA relied upon when approving the drug had various limitations, and the findings of the two clinical studies were conflicting,” James Chambers, Ph.D., MPharm., an associate professor at the Tufts Medical Center Institute for Clinical Research and Health Policy Studies, tells AIS Health via email.

Nearly 13 Million Americans Skipped Prescription Drugs Due to Costs Before COVID

Almost 12.8 million adults delayed or did not get prescription drugs in 2018-19 due to costs, including about 3.8 million privately insured nonelderly adults and 2.3 million elderly Medicare beneficiaries, according to a study by the Robert Wood Johnson Foundation and Urban Institute based on 2018–19 data from the Medical Expenditure Panel Survey. About 9.5% of adults who were uninsured all year reported unmet prescription drug needs, compared with 4.9% of Medicare beneficiaries and 5.6% of nonelderly Medicaid enrollees. More than one-quarter of adults with Medicare and 5.3% of privately insured people spent more than 1% of their family incomes on out-of-pocket prescription drug costs. In November, the House of Representatives passed the Build Back Better Act, which includes provisions seeking to bring down drug costs, but the bill’s fate in the Senate is in peril.