Spotlight on Market Access

Employers should start thinking about their specialty drug benefit design differently, recommended an industry expert at a recent conference. That includes not only reconsidering tiering but also coverage of biosimilars, as well as disease categories that increasingly will contribute to their specialty spend.

Alex Jung, founder of Alex Jung Consulting LLC and member of the Midwest Business Group on Health's board, opened her session at the MBGH Employer Forum on Pharmacy Benefits, Specialty Drugs & Biopharma: How PBMs Control Prices & What Employers Can Do About It by explaining that she is “try[ing] to correct a lot of the things that became misaligned incentives or…business practices that have resulted in exploitation of employers and their employees.” She expressed an interest in getting public policy experts to “understand that they need to step up and put in some governance and controls so that the burden doesn’t always fall on the employer” because they have enough to deal with.

Brand-name medications introduced from 2013 to 2017 across 12 therapeutic classes reduced net commercial spending by over $10 billion on existing medications, according to a new Health Affairs study.

Entry of new therapeutic competition led to a lower net price growth for 10 of the 12 drugs studied. Four of the medications showed a statistically significant decrease in the growth rate of net prices, including the long-acting insulin Levemir (insulin detemir) and the asthma inhaler Advair (fluticasone/salmeterol). Overall, the introduction of new drugs was associated with a 4.2% decrease in annual net price growth and a 6.8% immediate decrease in the mean net price of the existing drugs.

Among the 12 medications, eight saw lower commercial drug spending with the entry of new competition. Restasis (cyclosporine), a treatment for chronic dry eye, saw more than $7 billion in lower net spending within three years of competitor entry.

While merger and acquisition (M&A) activity in the life sciences industry has been a bit of a mixed bag the past few years, the first half of 2023 may indicate that deal making is picking up, say industry experts. Some headwinds may make it challenging at times, but the overall sentiment is a positive one.

“In life sciences, it’s a period of smart optimism as we head into the back half of the year” in terms of M&A activity, declares Kristin Pothier, healthcare & life sciences deal advisory & strategy leader at KPMG. “The overall biopharmaceutical deal market began to see a significant slowdown in the fourth quarter of 2022, and from a deal volume standpoint this carried through into the first quarter of 2023. As we look at all the potential for megadeals of the past, we don’t expect to see that as we move to the end of” the 2023 fiscal year and into FY 2024.

Humana Inc. is the sixth-largest health insurer in the U.S., serving more than 13 million lives nationwide. The insurer ranks No. 2 in Medicare Advantage (MA), behind UnitedHealthcare. Originally founded in the 1960s as a chain of nursing homes, the company has a long history in elder care, with more than 40% of its members enrolled in MA. Humana in 2021 unveiled a new direction for the company, introducing its payer-agnostic health care services division CenterWell. CenterWell's scope includes senior-focused primary care, home health and pharmacy benefits management. Humana in February 2023 said it will exit its commercial insurance markets and focus entirely on the public sector (Medicare, Medicaid and TRICARE), winding down its fully insured, self-funded and Federal Employee Health Benefit plans over the next 18 to 24 months.

Two congressional committees advanced notable PBM legislation, moving one step closer toward comprehensive changes to PBMs’ dominant business model.

The Senate Finance Committee, with a near-unanimous bipartisan majority, advanced a major Medicare- and Medicaid-focused PBM reform bill on July 26. D.C. insiders tell AIS Health, a division of MMIT, that the committee’s move bodes well for notable commercial market PBM reforms. So does the fact that senators of both parties are emphatically in favor of it, despite reluctance by some Republican members of the House of Representatives to make aggressive changes to PBM regulations.

A new study from the Employee Benefit Research Institute highlights the high — and growing — markups that hospital outpatient departments assign to biologic drugs, while also examining the variation in how HOPDs and physician offices (POs) treat innovator biologics compared to their biosimilars.

The study analyzed medical and pharmacy claims data from Merative MarketScan Commercial Database — which covers nearly 25 million people with private health insurance — from 2013 to 2020, and it focused on seven innovator biologics and their biosimilars that had been launched as of 2020.

With the Inflation Reduction Act (IRA) implemented in a relatively short time frame, many uncertainties remain, including the type of information CMS will deem most useful in drug price negotiations and how the law will impact biosimilars. During a June 20 webinar on navigating the IRA, Mark McClellan, M.D., Ph.D., the Robert J. Margolis Professor of Business, Medicine, and Policy, and founding director of the Duke-Margolis Center for Health Policy at Duke University, addressed some of those issues and how he expects them to play out. McClellan, who served as FDA commissioner from 2002 through 2004 and CMS administrator from 2004 through 2006, also offered advice on what he thinks pharma manufacturers should do as the first steps of price negotiation loom.

The event was presented by Innopiphany and moderated by Lisa Kennedy, Ph.D., managing principal at the life sciences consulting company.

The FDA recently converted accelerated approval to full for Amgen Inc.’s Blincyto (blinatumomab) for certain patients with acute lymphoblastic leukemia (ALL). While the drug is one of many others approved for the condition, respondents to a Zitter Insights survey said there is still unmet need in treating the disease.

On June 21, 2023, the FDA granted full approval to Blincyto for the treatment of adults and pediatric patients with CD19-positive B-cell precursor ALL — which is also known as acute lymphocytic leukemia — in first or second complete remission with minimal residual disease (MRD) greater than or equal to 0.1%. The agency first approved the CD19-directed CD3 T-cell engager on Dec. 3, 2014; the accelerated approval for MRD-positive B-cell ALL was granted on March 29, 2018.

For the past couple of years, payers have been focusing more attention on health inequities related to race, income and other factors by hiring staff and investing money in programs to improve access to care and lower costs. More recently, they have adopted similar strategies to address inequities in the pharmacy side of their businesses, according to health plan executives who spoke at a conference last month at the University of Pittsburgh.

The push among payers is known as “pharmacoequity,” a term popularized by Utibe Essien, M.D., an internal medicine physician and assistant professor at UCLA. Essien, who moderated the panel with the payer executives, defines pharmacoequity as “equity in access to pharmacotherapies or ensuring that all patients, regardless of race and ethnicity, socioeconomic status, or availability of resources, have access to the highest quality of pharmacotherapy required to manage their health conditions.”

Following the launch of Amgen Inc.’s Amjevita (adalimumab-atto), a slew of other FDA-approved Humira (adalimumab) biosimilars entered the U.S. market in July under settlement agreements with Humira originator AbbVie Inc. Major PBMs quickly announced that they would add more biosimilars to their formularies to compete with Humira.

At the end of June, UnitedHealth Group’s Optum Rx said it will place Boehringer Ingelheim's Cyltezo (adalimumab-adbm) and Sandoz's Hyrimoz (adalimumab-adaz) on its formulary at parity with Humira starting July 1. The Cigna Group’s Express Scripts then said it would add three biosimilars — Cyltezo, Hyrimoz and adalimumab-adaz (the unbranded equivalent of Hyrimoz) — to its list of preferred drugs.