Radar on Drug Benefits

Although several PBM reform measures are already circulating in Congress, lawmakers recently added even more legislative proposals to the fray. The Senate Finance Committee released a discussion draft that would introduce a host of financial reporting requirements for PBMs contracted by Medicare Part D plans, and then announced it would mark up a package including that measure and other PBM reforms later this month. And, following a markup, the House Education and Workforce Committee advanced a spate of bills focused on promoting transparency for PBMs, health care providers and insurers.

A Capitol Hill insider tells AIS Health, a division of MMIT, that how exactly these measures will fit into a final package of PBM reform legislation remains to be seen, although a few possible scenarios are beginning to come into view.

People with higher copays are significantly less likely to adhere to their commonly prescribed cardiovascular medications than those with low copays, according to a study published this month in JAMA Network Open. Utibe R. Essien, M.D., the study’s lead author, tells AIS Health the variations in adherence based on copays are “striking” and could have broader implications if some of the drugs are approved for obesity as expected and become even more widely used.

Utibe adds that people who do not take these drugs could have serious medical complications, leading to more of a health burden for them and financial burden for payers due to the high costs associated with hospitalizations, emergency room visits and other expenses.

The Pharmaceutical Research and Manufacturers of America (PhRMA) sued the Biden administration over Medicare drug price negotiation and inflation cap provisions in the Inflation Reduction Act (IRA), arguing that the policies are unconstitutional. Two patient assistance groups, the National Infusion Center Association and the Global Colon Cancer Association, joined the lawsuit, which was filed in the U.S. District Court for the Western District of Texas, per a PhRMA press release. The U.S. Chamber of Commerce, Bristol Myers Squibb, and Merck & Co. Inc. filed their own lawsuits against the drug price provisions of the law in recent weeks, and Biogen Inc.’s CEO said that his firm may do the same. The Chamber of Commerce was a major financial backer of legal efforts to overturn the Affordable Care Act during the 2010s, and it filed an amicus brief in support of the lawsuit that ultimately led to the U.S. Supreme Court’s move to strike down mandatory state Medicaid expansion.

The introduction of five Herceptin (trastuzumab) biosimilars contributed to a 21% decline in the cancer drug’s average sales price from the first quarter of 2019 to the second quarter of 2022, according to a study published this month in Health Affairs. Alice J. Chen, the study’s lead author, tells AIS Health that the adoption of Herceptin biosimilars and subsequent price decrease of the biologic is “a pretty promising case” at a time when biosimilars’ cost-saving potential is generating considerable interest.

However, Chen says the uptake of other drugs’ biosimilars has varied, leading to more modest price declines and questions about how much the health care industry will save as a flood of biosimilars becomes available in the U.S. in the coming years.

CMS on June 9 revealed a list of 43 Medicare Part B drugs that will be sanctioned for having their prices increase faster than the rate of inflation, as part of the Inflation Reduction Act (IRA). The number of drugs affected is almost double the number that made CMS’s initial list, which the agency made public in March. Starting in July, beneficiaries who normally pay 20% coinsurance under Part B for the 43 drugs will see their cost sharing decline based on an inflation-adjusted price. The federal government will invoice manufacturers for 2023 and 2024 Part B inflation rebates no later than fall 2025, and those funds will be deposited into the Medicare Trust Fund.

Seven of Amgen, Inc.’s medications made the list, including its blockbuster bone cancer treatment Prolia, cancer medications Kyprolis, Vectibix and Blincyto, and Nplate for immune thrombocytopenia.

Alex Oshmyansky, M.D., the CEO of Mark Cuban Cost Plus Drug Co. (MCCPDC), the online cash pharmacy funded by the eponymous billionaire investor, said the company has become a licensed drug wholesaler nationwide and has plans to roll out quasi-PBM business lines including a retail pharmacy network. Oshmyansky discussed these new ventures — and addressed criticism by health care experts that his firm can’t lower specialty pharma costs — during a June 13 keynote at the 2023 AHIP Conference in Portland, Oregon.

“I think it was always our ambition” to work with retail pharmacies, Oshmyanksy said. “I think there’s a variety of products where it just doesn’t necessarily make sense for them to be mail-order products,” citing “cold supply chain” and “acute care medications” as examples.

The Senate Finance Committee recently introduced a bill that adds to a growing swell of legislation aimed at changing how PBMs conduct business. This latest measure, which is focused solely on Medicare Part D, aims to delink PBM compensation from drug list prices and utilization. Industry experts say it is meant to complement, rather than compete with, other legislation that targets a broader range of business practices and insurance markets.

The Patients Before Middlemen (PBM) Act, introduced on June 14, targets just Medicare Part D because that program is where the Senate Finance Committee’s jurisdiction lies, explains James Gelfand, president and CEO of the ERISA Industry Committee (ERIC). And based on the Senate Health, Education, Labor and Pensions (HELP) Committee’s jurisdiction, the legislation that it advanced in May — the Pharmacy Benefit Manager Reform Act — would apply just to employer-based health plans and address issues such as rebate retention and spread pricing.

Although health plans’ formularies have largely been making it easier for people to access buprenorphine in recent years, new research indicates that coverage barriers and access gaps remain — particularly for a newer, costlier extended-release formulation of the opioid use disorder (OUD) drug.

However, a recent FDA approval could usher in more competition that decreases the price and increases coverage of extended-release buprenorphine, which has major advantages over the immediate-release versions, according to one of the study authors.

With the Federal Trade Commission investigating major PBMs’ business practices and reform measures gaining momentum in Congress, executives of the country’s three largest PBMs have been busy assuring investors and analysts that they can withstand the heat. The recent Bernstein Strategic Decision Conference proved no exception, as CVS Health Corp.’s chief financial officer made the case there that employers and health plans — rather than PBMs — are in the driver’s seat when it comes to deciding how contracts are written.

Industry experts tell AIS Health, a division of MMIT, that while it is true that some employers may prefer the status quo, that’s certainly not the case universally. And they say the argument that employers and health plans use “sophisticated consultants” ignores the fact that those same consultants can get paid hefty sums by PBMs when they win contracts.

Optum Rx, the PBM owned by UnitedHealth Group, recently launched new programs that will reimburse community pharmacies for helping vulnerable and underserved patients access critical health care services. The move comes as major PBMs like Optum Rx are facing ever-increasing scrutiny for their business practices — including from rural and independent pharmacies that contend big PBMs are driving them out of business.

A trade group for community pharmacists and a health policy expert both say that the programs have promise, although they also say it’s unclear how big of an impact Optum Rx’s initiatives will ultimately make.