RADAR on Drug Benefits

Experts Predict Drug Price Reforms Will Have Modest Impact on Commercial Market

As soon as Friday, Congress is expected to pass Medicare prescription drug price reforms as part of the Inflation Reduction Act (IRA). The reforms are less ambitious than previous versions of drug pricing legislation considered by the current Congress, but various experts and health care stakeholders are mounting vehement arguments about the reforms’ ultimate impact on prices.

Under the bill, HHS would be able to negotiate the price of a gradually increasing number of drugs starting in 2026, when 10 drugs will be eligible for negotiation. The bill would also limit out-of-pocket drug costs for Medicare Advantage and Part D beneficiaries to $2,000 per year, and repeal the so-called rebate rule in Medicare Part D. In addition, the proposal would bar Medicare Part B and Part D drug prices from growing faster than inflation. In a summary of the late version of the reconciliation bill, Senate Democrats estimated that the drug pricing reform program would save $288 billion over 10 years.

Looming FDA Decisions Could Swell Number of Gene Therapies on Market

In its latest drug pipeline report, UnitedHealth Group-owned PBM Optum Rx takes a look at two high-priced gene therapies that are slated for FDA approval soon. But those are far from the only gene therapies that payers should be watching, an Optum Rx executive tells AIS Health.

Both drugs highlighted in Optum’s report, Zynteglo (betibeglogene autotemcel) and Skysona (elivaldogene autotemcel), are manufactured by bluebird bio, Inc., a Massachusetts-based biotech company. An FDA advisory panel in June recommended both drugs for approval. Currently, only two gene therapies are on the U.S. market: Luxturna and Zolgensma.

CivicaScript Launches Initial Generic Drug, Plans Several More in Coming Years

CivicaScript last week began selling its initial generic drug, a 250 mg abiraterone acetate tablet. It’s the first of what the health insurer- and PBM-backed nonprofit company hopes are many medications that it will produce to help patients and payers lower their drug spending.

The product is currently only available through Intermountain Healthcare, a Utah-based integrated health plan and system that owns a specialty pharmacy, and Lumicera Health Services, a specialty pharmacy owned by Navitus Health Solutions. But CivicaScript President Gina Guinasso tells AIS Health, a division of MMIT, that she expects other pharmacies to offer the medication in the coming months.

News Briefs: Drug Spend Increased by 12% in 2021

Spending in the U.S. on medicines increased by 12% in 2021, primarily because of COVID-19 vaccines and therapies, according to the IQVIA Institute’s annual report on drug trends. The report also found that “Despite an increase in overall spending, costs per prescription on average are flat or slightly declining. Prescription drug use reached a record 194Bn daily doses in 2021 as new prescription starts for both chronic and acute care recovered from the slowdown recorded in 2020…[but] spending on medicines is expected to return to pre-pandemic growth trend lines by 2023.”

A federal appeals court on July 25 held that a Pfizer Inc. coupon program violated the federal Anti-Kickback Statute. The Second Circuit Court of Appeals ruled that Pfizer offering copay assistance to Medicare beneficiaries was illegal under the statue. AHIP applauded the ruling, arguing that “By upholding these protections, the courts have taken an important step to protect Americans from what would otherwise be an unchecked multi-billion-dollar price tag that would make coverage and care less affordable for everyone.”

UnitedHealth Eyes No Out-of-Pocket Costs for Certain Drugs; Other Large Payers May Follow Suit

UnitedHealth Group announced on July 15 that it would eliminate out-of-pocket costs for insulin and a few other medications for beneficiaries enrolled in fully insured plans. The managed care organization expects to implement the changes starting as early as Jan. 1, 2023, pending regulatory approval.

Health and drug policy experts who spoke with AIS Health, a division of MMIT, applauded UnitedHealth’s decision, and noted it would benefit patients who struggle to pay for medications and increase adherence. They also said the move could help United financially, as members are more likely to stay out of the hospital and have better long-term health, but they said it could lead to higher premiums for employers and employees. UnitedHealth did not respond to AIS Health’s request for comment on how the company would foot the bill for implementing the zero cost-share policy.

Medication Abortion Faces Legal Uncertainty Post-Dobbs

With abortion banned or on the verge of a ban in a growing number of states following the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, medication abortion has become more important than ever for women and pregnant people seeking abortion care. Abortifacients, the class of prescription drug used to terminate pregnancies, can be used more discreetly than surgical abortions: they don’t require an in-person consultation and, since the start of the pandemic, have been dispensed online without medical risk to patients.

However, experts say that the legal status of medication abortion is far from settled in states where abortion has been banned. Many patients haven’t heard that medication abortion is available, and women and pregnant people who do use abortifacients — or suffer a miscarriage — could face prosecution in states where abortion has been banned. It’s not clear what sort of criminal or civil risk providers, purchasers and carriers will bear if their patients and plan members use abortifacients prescribed across state lines.

Pharmacist Care Managers Could Help Improve Diabetes Outcomes

Pharmacists and other non-physician care managers can improve the quality of diabetes care in the primary care setting, but structural issues make it difficult to fully leverage their potential, according to research published in the July issue of the journal Health Affairs.

“We need to have a different way of taking care of people with a chronic illness,” said Thomas Bodenheimer, a professor emeritus of family and community medicine at the University of California, San Francisco, who spoke at a Health Affairs briefing on July 19. The briefing convened several researchers who published diabetes-focused articles in the journal’s July issue.

Medicare Beneficiaries Are More Likely to Reach Catastrophic Spending on Insulin

Among people who filled at least one insulin prescription, 14.1% reached catastrophic health spending — out-of-pocket medical spending greater than 40% of a household’s remaining income after subsistence needs are met — and almost two-thirds of them were Medicare beneficiaries, according to a recent Health Affairs study.

The study was based on data from the Medical Expenditure Panel Survey in 2017 and 2018. Among the respondents who filled at least one insulin prescription, 41.1% were covered by Medicare and 35.7% by private insurance. Median annual out-of-pocket spending on insulin was $97.72, while people with Medicare coverage and private insurance paid much more than Medicaid enrollees.

Drug Price Reforms Return to the Senate’s Agenda

After more than a year of deliberation and false starts, Congress might finally reform pricing and federal purchasing of prescription drugs in the fall, D.C. insiders tell AIS Health, a division of MMIT. The substance of the drug pricing bill is similar to previous proposals, but the political ground inside the Democrats’ Senate caucus may have shifted enough to allow prescription drug pricing to eke through as part of a diminished catch-all spending bill that would still be the signature achievement of the beleaguered Biden administration.

Progress on the drug pricing bill resumed when Senate Majority Leader Chuck Schumer (D-N.Y.) on July 7 submitted the text of a bill to the Senate parliamentarian. The parliamentarian will deem whether the bill conforms with the Senate rules that govern the budget reconciliation process. Budget reconciliation is an arcane procedure that allows the Senate to pass legislation with a simple majority, so long as the bill in question relates largely, in the parliamentarian’s judgment, to the budget.

Payers Are Taking Steps to Manufacture Cheaper, More Accessible Generic Medications

The state of California announced last week that it would become the first state to manufacture its own insulin, while a payer-owned coalition said it would distribute its initial generic medication later this summer. Taken together, the moves show that some payers, be they the government or health insurers, are serious about reining in the costs of generics and dealing with inefficiencies in the pharmaceutical supply chain, according to health policy and drug pricing experts who spoke with AIS Health, a division of MMIT.

California Gov. Gavin Newsom (D) revealed the insulin plans on July 7 via a video on Twitter, keeping to a promise he had first made in 2019 when he was elected to office. The announcement followed the news in June that EmsanaRx became the first PBM to join CivicaScript, a company founded two years ago by a consortium of payers that is aiming to manufacture and lower the cost of generic medications in outpatient settings. In addition, Navitus Health Solutions, a startup PBM that touts a 100% pass through model, joined the CivicaScript partnership on July 13.