RADAR on Drug Benefits

News Briefs: Humana Wins in Rite Aid Reimbursement Dispute

AllianceRx Walgreens Prime — a specialty and home delivery pharmacy business owned by Walgreens Boots Alliance — is rebranding to AllianceRx Walgreens Pharmacy. The move comes after Walgreens assumed full ownership of the business; previously, it was a joint venture between Walgreens and the PBM Prime Therapeutics. In addition to the company’s name change, it promoted Tracey James, R.Ph., from the role of senior vice president to chief operating officer.

Rite Aid Corp. must pay Humana Inc. $123 million after an arbitrator found that the retail pharmacy chain inflated reimbursement claims above the “usual and customary” prices for drugs, Stat reported. Rite Aid’s rival Walgreens Boots Alliance Inc. faces a similar lawsuit brought by several Blue Cross and Blue Shield affiliates. In both cases, the payers allege that the pharmacy chain systematically charged the health plans inflated prices for generic prescription fills. The health plans claim that their contracts with the pharmacies entitled them to reimburse the pharmacies for drug fills at the lowest price that the pharmacies charged for the drug in question, an arrangement called “usual and customary” pricing. However, the health plans say that the pharmacies charged cash-paying customers less than the “usual and customary” price submitted to health plans for reimbursement. Rite Aid plans to ask a federal court to vacate the arbitrator’s decision in the Humana case, per Stat, while the Walgreens-Blues suit is pending.

Payers Applaud as CMS Stands Ground on Aduhelm Coverage

In a move derided by some health care stakeholders and applauded by others — including private payers — CMS on April 7 finalized its National Coverage Determination (NCD) for an Alzheimer’s treatment that has been steeped in controversy since it received accelerated approval last June.

The final coverage decision largely affirmed what CMS had proposed in its draft NCD: Medicare will cover Biogen Inc.’s Aduhelm (aducanumab) only for patients enrolled in randomized, controlled clinical trials conducted either through the FDA or the National Institutes of Health. Patients also must have a clinical diagnosis of mild cognitive impairment due to Alzheimer’s disease or mild dementia with a confirmed presence of plaque on the brain.

States Pass More PBM Laws, Including Copay Accumulator Bans

PBMs have drawn more attention than ever from state officials responding to the steep cost of prescription drugs. As federal efforts to manage the rising cost of medications have stalled, state lawmakers across the country have considered hundreds of bills that affect PBMs, ranging from prescription drug affordability boards to banning copay accumulators.

The National Academy for State Health Policy (NASHP), a think tank and policy group, identified 118 bills introduced to state legislatures across the country that would change PBM regulations during 2022 sessions. In addition, NASHP found state legislators nationwide have introduced 44 bills that would reform drug coupons, including bans on copay accumulators and maximizers. That follows more than 100 laws passed since 2017 by state legislatures, according to a June 2021 NASHP blog post.

Many Medicare Enrollees Can’t Afford Cancer, Specialty Drugs

Large numbers of Medicare beneficiaries who are ineligible for low-income subsidies and have been prescribed high-price prescription drugs for conditions such as cancer don’t initiate their treatment, likely because they can’t afford it, according to new research published in Health Affairs. One of the study’s authors tells AIS Health that severe illness is a possible outcome of noninitiation in the studied clinical areas and adds that proposals under consideration in Congress to cap out-of-pocket spending for Medicare beneficiaries would make a big difference to the affected patients.

According to the paper, “among beneficiaries without subsidies, we observed noninitiation for 30 percent of prescriptions written for anticancer drugs, 22 percent for hepatitis C treatments, and more than 50 percent for disease-modifying therapies for either immune system disorders or hypercholesterolemia.”

BCBS of Michigan Launches Precision Medicine Pilot Program

Blue Cross Blue Shield of Michigan last month launched a precision medicine pilot program for 500 of its Medicare Advantage HMO members who also have pharmacy benefits. Experts say the move is becoming more common among payers as they look to reduce their medication spending and improve clinical outcomes in high-risk groups.

The program, Blue Cross Personalized Medicine, is using pharmacogenomics (PGx), or genetic testing, to help identify how people respond to certain medications and offer specific treatment recommendations based on their genetic makeup. Its aim is to help BCBS of Michigan manage high drug costs and give its members tailored, cost-effective and clinically relevant care while also decreasing adverse drug reactions.

News Briefs: Express Scripts Wins Anthem Lawsuit

The long-running lawsuit between Anthem, Inc. and Express Scripts — over whether the PBM now owned by Cigna Corp. overcharged Anthem for prescription drugs — has finally concluded. Anthem first sued Express Scripts in 2016, alleging primarily that the PBM failed to honor its contractual agreement to provide “competitive benchmark pricing” for prescription drugs and thus owed the insurer $14.8 billion in damages. Ultimately, Judge Edgardo Ramos dismissed most of Anthem’s claims, finding that the companies’ contract did not “obligate Express Scripts to provide competitive benchmark pricing, but merely to negotiate in good faith in the event that Anthem’s market analysis shows non-competitive pricing.”

As Major Drug Price Reforms Stall, Focus Shifts to Insulin Costs

The Senate Finance Committee held a hearing on March 16 in which politicians and experts discussed drug price inflation and the proposal for Medicare to negotiate prices for some high-cost medications. But the efforts in those areas still seem uncertain and most are unlikely to move forward anytime soon as they were part of the Build Back Better Act (BBBA) bill that stalled out in December, one health policy expert tells AIS Health.

Health insurers and PBMs, though generally supportive of lowering drug prices, have in the past been critical of some of legislators’ reform proposals — including a narrower focus on lowering insulin out-of-pocket costs that has emerged in recent months.

After Aduhelm, Congress May Revamp Accelerated Approvals

The FDA’s accelerated approval of Alzheimer’s drug Aduhelm (aducanumab) last year was extremely controversial, prompting harsh criticism and calls for reform of the accelerated approval process itself. Congress has taken up the issue and is considering one bill from each major party that would revamp the process in the hope of addressing concerns that the pathway has allowed flawed drugs to stay on the market without being revisited.

Medical research and health care policy experts have raised a number of critiques of the current accelerated approval framework. Two critiques stand out: The first concerns the quality of data used in measuring the effectiveness of accelerated approval drugs. After a drug is granted accelerated approval, the FDA mandates that the drug be evaluated using confirmatory clinical trials. Experts have criticized the quality of data collected for accelerated approval drugs; in particular, the measurements used to gain approval for Aduhelm were heavily criticized by clinicians.

Walgreens Faces Another ‘Usual and Customary’ Fraud Suit

Several Blue Cross and Blue Shield affiliates sued Walgreens Boots Alliance Inc. on March 15, alleging that the retail pharmacy giant fraudulently overcharged them and their members for generic drugs over the course of “more than a decade.” The suit follows years of similar allegations from multiple payers, including federal health insurance programs. One legal expert tells AIS Health, a division of MMIT, that the current litigation has the potential to expose Walgreens to years of legal risk.

In the suit, three Blues affiliates — CareFirst, Blue Cross and Blue Shield of South Carolina and Blue Cross and Blue Shield of Louisiana — allege that Walgreens systematically and fraudulently charged the health plans inflated prices for generic prescription fills. The health plans claim that their contracts with Walgreens entitled them to reimburse the pharmacy for drug fills at the lowest price that Walgreens charged for the drug in question, an arrangement called “usual and customary” pricing. The plans allege that, despite those agreements, Walgreens allowed members of its prescription drug savings club to pay less than Blues plan members for the same drug — and intentionally withheld information from the plans to avoid changing the usual and customary price.

Part D Out-of-Pocket Cap: Limited Impact, Low Cost

A small share of Medicare Part D beneficiaries without access to the low-income subsidy (LIS) program would benefit from the introduction of a $2,000 out-of-pocket (OOP) spending cap for prescription drugs, a provision that is included in the Build Back Better Act, according to a recent Urban Institute analysis. In 2019, a $2,000 cap could have saved approximately 866,000 non-LIS Part D enrollees about $900 each, on average. There are 32.8 million total non-LIS enrollees in the Part D program. The cap would carry a small price tag, increasing total Part D expenditures by $782 million in 2019 and the premium across all Medicare beneficiaries by $4.35 annually. The study concluded that capping out-of-pocket costs for certain Part D beneficiaries would enhance the program without significantly raising costs.