RADAR on Drug Benefits

News Briefs: Centene Appoints New CEO Amid PBM Overhaul

Centene Corp. has named Sarah London as its new CEO after its longtime chief executive, Michael Neidorff, took a medical leave of absence ahead of his planned retirement. London, who was serving as Centene’s vice chairman, will take the helm immediately. In her previous management role, London was responsible for a “portfolio of companies independent of Centene’s health plans, designing differentiated platform capabilities, and delivering industry-leading products and services to third-party customers,” per a March 22 press release. Before coming to Centene, she worked for UnitedHealth Group’s venture capital arm, Optum Ventures, and its data solutions division, Optum Analytics. London’s appointment comes at a time when Centene is planning an overhaul of its PBM assets, with a request for proposal seeking an external vendor due this summer. The firm in recent months has paid millions of dollars to settle accusations by states that its PBM operations overcharged their Medicaid programs for prescription drugs. During Centene’s Feb. 8 conference call to discuss fourth-quarter and full-year financial results, London told analysts that “the strategy here is to outsource administrative PBM functions to an external partner, thereby allowing us to reduce our three PBM platforms down to one and to focus...[on] clinical member and provider engagement.”

Inflation Rebates Would Cost Manufacturers Millions, Studies Say

Drug manufacturers would be on the hook to pay the federal government hundreds of millions of dollars in rebates per year should the Build Back Better Act (BBBA) — and a key inflation-based penalty provision within it — become the law of the land. The breadth of the penalties, however, hinges on various factors, including the current runaway rate of inflation.

While the BBBA, passed by the House in November 2021, remains stalled, lawmakers have expressed a renewed sense of interest in picking up the pieces following President Joe Biden’s March 1 State of the Union address.

A previous holdout to the Democrats’ wide-ranging spending plan, Sen. Joe Manchin (D-W.V.) recently issued an informal counteroffer to Biden’s speech, calling for prescription drug spending to remain central to any legislation that moves ahead.

Nonprofit Will Sell $30 Insulin Direct to Patients Starting in 2024

CivicaRx, the nonprofit drug manufacturer owned by a consortium of health systems and health plans, aims to release a line of three insulins — glargine (Lantus), lispro (Humalog) and aspart (Novolog) — as soon as 2024. Those insulins will be available in vials or prefilled pens and will be priced at “no more than $30 per vial and no more than $55 for a box of five pen cartridges” for all consumers, regardless of whether they have insurance; the products will soon be submitted for review for interchangeable biosimilar approval by the FDA.

The CivicaRx initiative could do something that existing proposals to cap the price of insulin would not: It may actually lower the list price of insulin products. Ge Bai, Ph.D., tells AIS Health, a division of MMIT, that she expects the insulins will set the standard price in their category when they become available. (Bai, a professor at Johns Hopkins University’s schools of business and public health, has authored several publications with Dan Liljenquist, an executive at the Intermountain Healthcare hospital system and the chair of CivicaRx’s board.)

Industry Trade Groups Sound Off About Proposed DIR Overhaul

The main health insurer and PBM trade groups are not fans of CMS’s proposal to reform the direct and indirect remuneration (DIR) system in Medicare Part D, judging by their recently submitted comment letters and interpretation of a recently published actuarial analysis.

The policy in question is part of the 2023 Medicare Advantage and Part D proposed rule, which CMS issued in January. Among a slew of other provisions, the agency is seeking to require part D plan sponsors to apply all price concessions that they receive from network pharmacies at the point of sale. Smaller pharmacies have long complained that the current system — in which Part D plan sponsors can recoup price concessions (i.e., DIR) from pharmacies for dispensed drugs if the pharmacies do not meet certain metrics — makes it difficult if not impossible to do business.

How Can U.S. Prevent Drug Supply Chain Disruptions?

After disruptions during the height of the COVID-19 pandemic, the National Academies of Science, Engineering and Medicine (NASEM) convened a committee to ensure that supplies of medical technology and pharmaceuticals wouldn’t be interrupted during future crises. Experts tell AIS Health, a division of MMIT, that while the report’s recommendations will help prevent disaster pricing if implemented, it won’t have a significant effect on the pricing behaviors or day-to-day operations of PBMs.

The panel, a multidisciplinary group of business leaders, medical practitioners and academics — which included recently approved FDA head Robert Califf, M.D. — had seven notable recommendations, according to an official summary:

News Briefs: Rite Aid’s PBM Joins Trade Group

Elixir, Rite Aid Corp.’s PBM business, has joined the Pharmaceutical Care Management Association (PCMA) trade group. According to a March 1 press release, Elixir Chief Operating Officer Chris DuPaul will also serve on the PCMA board of directors. Rite Aid changed the name of its subsidiary EnvisionRxOptions to Elixir in March 2020, saying at the time that the company plans to significantly invest in the rebranded division’s technology platform.

Pharma Industry Spent Big to Block Drug Price Reform in 2021

With drug price reforms on the agenda, pharmaceutical companies last year rallied their significant lobbying resources to block or water down transformational policies. Partly as a result of those lobbying efforts, drug price reform is on the ropes, though sources say there is a meaningful chance that a standalone drug price reform bill could pass Congress this year before the midterm elections.

Drug price reform efforts have most recently been part of the proposed Build Back Better Act (BBBA), a bill that contains much of President Joe Biden’s proposed policy agenda. That bill stalled out in December, when centrist Sen. Joe Manchin (D-W.Va.) said he could not back the measure as proposed. When Congress disbanded for the holiday recess, the BBBA had several notable drug-pricing provisions. The federal government would have been able to negotiate the prices of certain high-cost medications with pharmaceutical manufacturers. Also, drug prices would be barred from rising at a higher rate than inflation, the Medicare Part D benefit design would be revamped to lower beneficiaries’ out-of-pocket costs and the price of insulin would be capped. Moreover, the never-implemented Trump-era rule that would have overhauled the prescription drug rebate structure in Medicare Part D would have been repealed.

Payers Can Play a Role in Encouraging Naloxone Coprescribing

To prevent deaths and injuries related to prescription opioid misuse, research has shown that coprescribing the overdose-treatment drug naloxone when patients on chronic pain-management therapy receive high doses of opioids can make a big difference. Yet federal data show that less than 1% of patients who should be prescribed naloxone with their opioid medications obtain a prescription for it — a rate that managed care entities can play a role in changing, according to a new paper from the Academy of Managed Care Pharmacy (AMCP) Addiction Advisory Group.

The AMCP Addiction Advisory Group in 2019 polled AMCP payer members, addiction treatment providers and managed behavioral health organizations, with the goal of understanding and evaluating “trends in treatment, coverage, policies, and needs associated with providing health services to patients with substance use disorders.” One particularly notable finding was that 80% of the managed behavioral health organizations and 47% of AMCP payer members who responded to the survey encouraged naloxone coprescribing in patients at high risk of overdose, but “no organizations required coprescribing.”

Optum Aims to Cut Specialty Spend With Management Tool

UnitedHealth Group’s Optum division recently unveiled an analytics-fueled medication management system aimed at tackling rising costs in the specialty drug market. The company says the new product, known as Specialty Fusion, has the capability to generate significant savings while reducing administrative burden for prescribers.

Positioned as a solution for commercial health plans, Specialty Fusion is designed to integrate medical and pharmacy benefit data into a single point-of-service management system. According to Optum, the Specialty Fusion system differs from other solutions on the market because it provides “a full integration” of medical and pharmacy benefits. The system incorporates various cost determinants at the point of care, such as available rebates, lower cost sites of care and manufacturer assistance programs, in addition to a carousel of more affordable drug therapies.

FTC Punts Probe of PBMs but Could Take Up Issue Again

The Federal Trade Commission (FTC) won’t investigate PBMs’ business practices, despite considering a probe in a Feb. 17 meeting. The FTC’s four commissioners deadlocked 2-2 on a party line vote authorizing an investigation, with the two Democratic commissioners voting in favor of an investigation and the two Republicans voting against it.

During the meeting, according to a transcript prepared by the agency, FTC Chair Lina Khan, a Democrat, proposed “the use of the commission’s investigative authority under section 6B of the FTC Act to issue orders to large pharmacy benefit managers, to study a range of their commercial practices, to give us better insight into their drug pricing practices and their contracts with pharmacies, including for the purpose of examining whether those contracts negatively impact independent or unaffiliated pharmacies over recent decades.”