Radar on Drug Benefits

After Michelle McMurray-Heath, M.D., resigned from her position as president and CEO of the Biotechnology Innovation Organization, the major industry trade group said on Oct. 11 that Rachel King, co-founder and former CEO of GlycoMimetics, Inc., agreed to serve in those roles on an interim basis while BIO searches for a permanent successor. Before her departure, McMurray-Heath was on leave following disagreements with some board members over whether BIO should engage on social issues not directly connected to health care policy, which the molecular immunologist opposed, The Wall Street Journal reported. Her exit also comes in the wake of Congress’ passage of major drug pricing reforms as part of the Inflation Reduction Act, representing a rare defeat for the powerful pharma lobby.

Mark Cuban Cost Plus Pharmacy, the online pharmacy and generic manufacturing startup backed by the eponymous billionaire investor, recently struck its first deals with a health plan, Pennsylvania’s Capital Blue Cross, and a PBM, Rightway Healthcare Inc. The direct contracting deal represents a major step for the startup, which has done most of its business so far as a direct-to-consumer retailer — and one drug pricing expert tells AIS Health, a division of MMIT, that the deals help Cost Plus moves toward its ambitious, disruptive goals.

Only 9% of Medicare beneficiaries who sign up for a stand-alone Prescription Drug Plan (PDP) in 2023 will be in contracts rated 4 stars or higher, compared to 42% in the 2022 plan year, CMS recently estimated based on current enrollment figures. The average star rating for stand-alone PDP plans declined to 3.25 in 2023 from 3.70 in 2022, with only two PDP contracts receiving a 5-star rating. The change in distribution is largely due to adjustments in measure scores, and “the unusual circumstance of nearly all contracts qualifying for the regulatory adjustment for extreme and uncontrollable circumstances” driven by the pandemic, which led to higher than normal 2022 Star Ratings distributions, CMS explained in a fact sheet accompanying the release of the 2023 Star Ratings.

The FDA on Sept. 29 approved Relyvrio (sodium phenylbutyrate/taurusodiol), making it only the third medication to treat patients with amyotrophic lateral sclerosis (ALS). While ALS advocates and some clinicians applauded the agency’s decision, other providers have questioned the drug’s effectiveness, and some experts believe the drug is not cost-effective with its approximately $158,000 annual wholesale acquisition cost (WAC).

For instance, the nonprofit Institute for Clinical and Economic Review (ICER) found that Relyvrio, which was formerly known as AMX0035, would be cost-effective if it was priced at between $9,100 and $30,600 per year. And Bruce Booth, a former scientist who’s now a partner at the Atlas Venture biotechnology venture capital firm, wrote on Twitter that the $158,000 price for Relyvrio was “even more egregious than I thought!”

The FDA’s controversial accelerated approval of Biogen Inc.’s Aduhelm (aducanumab) has yielded new fallout, as members of the U.S. House of Representatives have introduced a bill seeking to unwind CMS’s national coverage determination that limited access to the Alzheimer’s treatment — and prevent CMS from issuing restrictive NCD decisions on future drugs.

D.C. insiders tell AIS Health, a division of MMIT, that the bipartisan bill’s fate will likely depend on the outcome of the upcoming midterm elections. They add that the NCD bill represents a renewed effort by the pharmaceutical industry to flex its lobbying muscle after it faced an unprecedented defeat with the passage of Medicare drug price negotiation as part of the Inflation Reduction Act.

More than 50,000 Medicare Part D beneficiaries experienced an opioid overdose in 2021, while almost a quarter of Part D enrollees (12.1 million) received at least one prescription opioid through Medicare, according to a recent report from the HHS Office of Inspector General.

The proportion of beneficiaries receiving opioids has been declining, from 33% in 2016 to 23% in 2021. Alabama saw the highest proportion of opioid recipients (36%), while New York and Hawaii ranked the lowest (15%).

Now that Medicare can negotiate the price of prescription drugs it purchases, the Biden administration needs to figure out how it will hash out deals with drugmakers. Experts tell AIS Health, a division of MMIT, that implementation of the long-sought negotiation program will come with plenty of challenges and pitfalls.

The administration will have to issue new regulations, hire hundreds of staff, determine which drug prices will be negotiated first and design the criteria that will select drugs for negotiation in the future.

The manufacturers of many drugs granted accelerated approval by the FDA do not complete timely confirmatory trials of the drugs’ efficacy, according to a recent study published in the journal Health Affairs — meaning that the pricing for many accelerated approval drugs has nothing to do with their clinical efficacy. The study’s author tells AIS Health, a division of MMIT, that “the market doesn’t work very well” for drugs that have received accelerated approval, and “what it leads us to is overpaying at the beginning and underpaying, potentially, later.”

After a drug is granted accelerated approval, the FDA mandates that the drug be evaluated using confirmatory clinical trials. The accelerated approval designation is given to new, unproven drugs that could potentially meet a dire need for a new or more effective therapy to treat a terminal disease. The intention behind the confirmatory trial system is to make sure that the drug actually does what its developer says it will.

Pharmaceutical companies often profit from their donations to non-profit patient assistance charities that are intended to help people afford high-cost medications, according to a study published in this month’s edition of the journal Health Affairs.

HHS’s Office of Inspector General (OIG) has provided guidance on the charities and cracked down in recent years on several charities and drug manufacturers. However, the authors noted that “the current regulations or enforcement permit donations that violate the spirit of Medicare’s Anti-Kickback Statute,” which prohibits pharma companies from covering Medicare Advantage enrollees’ out-of-pocket drug spending for the drugs they manufacture.

Walgreens Boots Alliance, Inc. (WBA) will assume full control of specialty pharmacy Shields Health Solutions for approximately $1.37 billion cash, the firm said Tuesday. Walgreens already controlled the pharmacy, holding 71% of the company’s stock thanks to a $970 million deal that closed last year. WBA CEO Roz Brewer said in a press release that the deal will allow “further progress on our strategy through Shields’ integrated model, increasing our value to health systems, expanding access to payor partners and supporting improved outcomes and lower costs.”

Centene Corp. agreed to pay $165.6 million to the state of Texas over the state's contention that the insurer overcharged the state's Medicaid program for PBM services, according to legal documents obtained by Kaiser Health News (KHN). The settlement is the largest of a series of settlements from at least a dozen states over similar charges. The Texas settlement is the largest such arrangement, with Centene paying out at least $475 million so far to the states of Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New Mexico, Ohio, Texas, and Washington; three other states have not released the value of their settlements with the Medicaid-focused insurer, per KHN. Centene has divested most of its PBM assets over the past year, and told investors in 2021 that it set aside $1.25 billion to wind down its liability to states in this area.