RADAR on Drug Benefits

New Blues-Owned Drug Contracting Org Wants to Work With, Not Against Providers, CEO Says

A new venture founded by Blue Cross and Blue Shield affiliates, called the Synergie Medication Collective, aims to improve affordability and access to drugs covered under the medical benefit — a category that includes cancer medications and cell/gene therapies. Synergie’s chief executive says the goal isn’t to disrupt the current distribution system for clinically administered drugs, but rather to leverage the Blues’ size and bargaining power to scale up innovations like outcomes-based contracting for some of the country’s priciest drugs.

“We’re basically a medical contracting organization,” Synergie CEO Jerrod Henshaw tells AIS Health, a division of MMIT. “And by that, I mean we’re not going to be buying and billing like a Vizient or a HealthTrust and displacing any of that. We’re not going to be in the distribution channel.”

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CMS Walks ‘Tightrope’ With Generic-Coverage Proposal for Exchange Plans

Tucked into the annual payment rule for Affordable Care Act exchange plans is a proposal that, if finalized, would upend the way health plans and PBMs go about designing formularies — if only for one business line. Already, industry groups are weighing in to both applaud and criticize the concept of requiring ACA marketplace plans to put only generic drugs on their lowest cost-sharing tiers.

“There will be legitimate points to be made on multiple sides of this, and I think that this is going to be a very delicate tightrope that is going to have to be walked,” says Massey Whorley, a principal at Avalere Health.

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COVID-19 Vaccine Commercialization Will Be Costly for U.S. Health System

COVID-19 vaccines could add billions of dollars to overall health care spending each year if the federal government’s purchasing program ends early next year, according to a Kaiser Family Foundation analysis. To date, the federal government has spent about $25 billion on purchasing Pfizer and Moderna COVID-19 vaccines combined, at a weighted average purchase price of $20.69 per dose.

Pfizer and Moderna both announced that the average commercial price per dose for their vaccines could be three to four times greater than the price paid by the government, between $82 and $130 per dose. If half of U.S. adults receive a booster shot at the expected commercial prices, it could cost between $3.7 billion and $14.8 billion to purchase enough doses for the group (129 million).

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2023 Outlook: PBMs Will Focus on Humira Biosimilars, Specialty Drug Spend, FTC Probe

For the past few years, PBMs and plan sponsors have waited for the arrival of Humira (adalimumab) biosimilars. The first such product, Amgen’s Amjevita, is expected to hit the market on Jan. 31, more than six years after the FDA approved the drug. The agency has approved seven other Humira biosimilars, some of which are expected to become available next year, as well.

The competition means AbbVie, Humira’s manufacturer, will no longer have a monopoly on the drug category, which generated $13.6 billion in revenue in the U.S. during the first nine months of 2022, up 6.5% from the same time period in 2021.

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COVID Vaccine Prices Set to Rise After Commercialization — But Are They Fair?

COVID-19 vaccines are likely to cost payers billions on an annual basis, according to a new analysis based on publicly disclosed vaccine price projections by executives from Pfizer Inc. and Moderna Inc. Despite criticism from some progressive members of Congress, who say the vaccines will be priced too high, one vaccine expert tells AIS Health, a division of MMIT, that per-dose costs aren’t out of line with typical vaccine prices for adults.

The federal government initially bought COVID vaccines, using its purchasing power to accelerate research and development. COVID vaccines were developed in record time, and federal purchasing helped manufacturers hit remarkable earnings figures. However, despite requests from the Biden administration for more funds to purchase future COVID vaccines, Congress seems unlikely to pay for more. Federal vaccination funds and vaccine stockpiles are likely to run out sometime in 2023.

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News Briefs: AbbVie Leaves PhRMA Lobbying Group

AbbVie Inc. is leaving several lobbying organizations, including the Pharmaceutical Research and Manufacturers of America (PhRMA), widely regarded as the most powerful drug industry trade group, according to Politico. PhRMA has had a tough year. In August, the trade group faced its most notable political failure in a generation when Democrats passed Medicare drug price negotiation as part of the Inflation Reduction Act. In the months since, PhRMA has launched an internal review of that episode and has dismissed several of its most prominent executives.

Amgen Inc. plans to acquire Horizon Therapeutics plc. for $27.8 billion, or $116.50 per share, according to regulatory filings; the deal is the largest health care merger of the year, per the Wall Street Journal. Horizon develops specialty drugs for autoimmune and inflammatory diseases. The firm’s best-seller is Tepezza (teprotumumab-trbw), a treatment for thyroid eye disease. If, as expected, Tepezza earns approval in the European Union and Japan, Horizon projects $4 billion in global annual revenue from the drug.

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ICER Report Finds Over $800 Million in Clinically Unsupported Drug Price Hikes During 2021

Seven of the 10 drugs with the highest estimated overall cost to the U.S. health care system in 2021 saw price hikes that were unsupported by new clinical evidence, according to the latest edition of the Unsupported Price Increase Report prepared by the Institute for Clinical and Economic Review (ICER). The report may be the one of the last to document business as usual for the pharmaceutical industry: Starting in 2023, as a result of this year’s Inflation Reduction Act (IRA), drug companies will face pressure from Medicare to restrict price hikes.

The seven drugs introduced $801 million in “incremental added costs to U.S. payers in 2021,” according to the report . ICER also separately identified three Medicare Part B drugs with clinically unsupported price increases. Three of the named drugs also appeared in last year’s report: Salix Pharmaceuticals, Inc.’s Xifaxan (rifaximin); Novartis AG’s Promacta (eltrombopag); and Horizon Pharma plc’s Krystexxa (pegloticase), which was on 2021’s Part B list and 2020’s main list.

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News Briefs: Manufacturers Reset Lobbying Strategy After Medicare Negotiation Loss

Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s most powerful lobbying group, has commissioned a major lobbying firm to review its failure to kill Medicare drug price negotiation, among other drug price reforms included in August’s landmark Inflation Reduction Act (IRA), Politico reported. The lobbying firm, BGR Group, will place its chairman and CEO, former HHS aide Bob Wood, in charge of the review. “Like most organizations, it’s our standard operating procedure to do an after-action review following a large-scale, organization-wide advocacy effort,” PhRMA spokesperson Brian Newell told Politico.

Meanwhile, the Association for Accessible Medicines (AAM), a pharma lobbying group that represents generics manufacturers, is in the middle of leadership turmoil, according to STAT. AAM fired its president, Dan Leonard, and will replace him with the group’s current executive vice president of sciences and regulatory affairs, David Gaugh. Leonard denied he was fired, but anonymous sources told STAT that his ouster was also related to the passage of the IRA.

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Mark Cuban Pharmacy, Employer-Owned PBM Offer New ‘Supplemental Drug Discount Product’

Two newcomers in the pharmacy space are teaming up to offer what they describe as a “first-of-its-kind supplemental drug discount product” aimed at helping self-funded employers winnow down their drug costs. The product — EmsanaRx Plus — is the result of a collaboration between the Mark Cuban Cost Plus Drugs Company and EmsanaRx, a not-for-profit PBM owned by the Purchaser Business Group on Health (PBGH). Yet industry observers tell AIS Health, a division of MMIT, that they’re skeptical about how disruptive the new product will truly be.

“Whether EmsanaRx Plus, integrating Cost Plus Drugs, fills an unmet need in the market will depend on how Cost Plus Drugs is integrated into the self-insured employer's benefit design,” suggests Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates.

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America’s New Most Expensive Drug Reignites Debate Over How to Price Gene Therapies

The FDA on Nov. 22 approved Hemgenix (etranacogene dezaparvovec-drlb), the first gene therapy for adults with hemophilia B, a genetic bleeding disorder. CSL Behring, the medication’s commercial rights holder, set a list price of $3.5 million, making it the most expensive drug in the U.S.

That price exceeds the $2.96 million health benefit price threshold (HBPB) that the nonprofit Institute for Clinical and Economic Review (ICER) determined recently in an evidence report, meaning it is not cost-effective according to the nonprofit’s guidelines.

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