Spotlight on Market Access

In a newly filed lawsuit, three patient groups are challenging a federal regulation that allows what they call an “evil money grab” by health insurers and PBMs: copay accumulator adjustment programs. The lawsuit contends that the rule violates both the Affordable Care Act and the Administrative Procedure Act, and legal experts tell AIS Health that it’s still an open question whether those claims will prevail.

The rule in question is the 2021 Notice of Benefit and Payment Parameters (NBPP), an omnibus regulation issued annually that chiefly sets ground rules for the ACA marketplaces. It drew the ire of groups that represent patients with chronic conditions by allowing individual and group health plans to implement copay accumulator adjustment programs, which prevent patients from counting the value of drug manufacturer coupons toward their deductibles or out-of-pocket payment limits. Drugmakers often offer coupons for pricey branded drugs — a practice that they say helps increase access to vital medications. But insurers contend that such coupons push consumers toward high-priced medicines, forcing health plans to raise premiums across the board to compensate.

A new study published in Health Affairs urged government leaders to limit market consolidation among the largest dialysis providers as more and more seniors choose Medicare Advantage over fee-for-service (FFS) Medicare. Analyzing 2016 and 2017 outpatient Medicare claims data, the study authors found that MA organizations paid inflated costs for dialysis services compared to what FFS Medicare would have paid, especially to large national dialysis organizations — where the majority of patients receive treatment. Notably, MA plans’ median cost for in-network hemodialysis (the most common form of the therapy) was $301, which was markedly higher than the $232 median cost for out-of-network treatments. Findings were similar for peritoneal dialysis, the less common form of dialysis.

Overall, MA plans paid 131% of the FFS price for in-network hemodialysis at large chains, compared to 120% of the FFS price at regional chains, and they paid 112% of the price at independently owned facilities. These markups were also found for in-network peritoneal dialysis but were not observed for out-of-network services.

As companies are exploring different strategies to keep their pharmaceutical costs in check, a spate of so-called alternate funding companies has emerged in the industry. And while they might appeal to a potential client at first glance, some — such as ones that carve out certain specialty drugs and seek coverage from patient assistance funds — may not be worth the investment, say some industry sources, who encourage companies to take a closer look at what their savings actually are.

During a July 29 webinar titled Specialty Drugs Update: Trends, Controversies, and Outlook, longtime industry expert Adam J. Fein, Ph.D., CEO of Drug Channels Institute, noted that while the use of copay accumulators and maximizers has risen, “there is another newer trend that’s even scarier, and that’s the business of what some people call specialty carve-outs,” he said, calling this “the shady business of specialty carve-outs.” Vendors such as ImpaxRX, Payd Health, SHARx, PayerMatrix and Script Sourcing get payers to exclude specialty drugs and then get those drugs covered via patient-assistance programs at manufacturers or charitable foundations. If patients are denied patient assistance, coverage reverts to the company’s payer/PBM/specialty pharmacy.

Sentara Healthcare is a Norfolk, Virginia-based nonprofit health system of 12 hospitals and more than 300 other sites of care. Its health insurance unit, Sentara Health Plans, Inc., is the third-largest insurer in Virginia, though it also serves employer groups in Ohio and North Carolina on a smaller scale. Many of Sentara’s products are offered under its Optima Health branding. UnitedHealth Group’s OptumRx and Optum Specialty Pharmacy manage Sentara’s pharmacy benefits.

In 2021, prescription drugs accounted for a median of 21% of large employers’ health care costs, and a full 100% of firms said they were concerned about prescription drug spending trends, according to the Business Group on Health’s 2023 Large Employers’ Health Care Strategy and Plan Design Survey.

Yet the rising cost of specialty medications — which are often covered by medical rather than pharmacy benefits — has forced companies to think differently about how to curtail drug spending, the organization found. According to the survey, specialty medications account for 56% of all pharmacy spending by polled employers.

The monthly Medicare Part D base beneficiary premium for 2023 will be $32.74, a slight decrease from $33.37 in 2022, according to CMS. The Part D national average monthly bid amount continues to drop, from $38.18 in 2022 to $34.71 in 2023. Regional low-income premium subsidy amounts have increased over the past few years in most states, yet five states — New York, Illinois, New Jersey, Indiana and Kentucky — are projected to see a decline larger than 5% in 2023. South Carolina is projected to see the biggest jump, with its average subsidy amount going up from $31.12 in 2022 to $37.84.

Multiple companies have been launching over the last several years that provide alternate funding options for patients. But one maximizer company has found itself the target of a legal battle with manufacturer Johnson & Johnson over its strategy to reclassify drugs and maximize the copay assistance it gets from pharma manufacturers.

Traditionally, when a manufacturer provides copay assistance for one of its drugs, that dollar amount would count toward the patient’s deductible and out-of-pocket maximum. But copay maximizer programs will distribute 100% of available manufacturer copay offset funds over 12 months, as opposed to copay accumulators, which apply the maximum manufacturer assistance up front and deplete that contribution before the end of the year. Payments in both approaches do not count toward members’ deductibles and out-of-pocket maximums.

A new formulation of a narcolepsy drug may get uptake among providers, according to Zitter Insights research. But payers indicate that they are likely to require patients to fail at least one generic drug before getting access to the new agent and other branded medications.

On July 19, Avadel Pharmaceuticals plc said that the FDA had granted tentative approval to its Lumryz (sodium oxybate) for the treatment of excessive daytime sleepiness or cataplexy in adults with narcolepsy. The drug — which is also known as FT218 — is a once-at-bedtime extended-release version of Jazz Pharmaceuticals plc’s Xyrem, which requires one dose at bedtime and then another dose between two-and-a-half to four hours later.

As soon as Friday, Congress is expected to pass Medicare prescription drug price reforms as part of the Inflation Reduction Act (IRA). [Editorial update: The House passed the legislation on Aug. 12, and President Joe Biden signed it into law on Aug. 16.] 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.

More than 1.4 million Medicare beneficiaries could see their medication costs plunge if the Senate passes a budget reconciliation bill that contains drug pricing reforms, Kaiser Family Foundation estimated.

The bill — put forward by Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin III (D-W.Va.) — will allow Medicare to negotiate some prescription drug prices starting in 2026 and require drug companies to pay rebates if drug prices rise faster than inflation starting in 2023. Between 2019 and 2020, half of drugs covered by Medicare Part D and 48% of drugs covered by Medicare Part B saw price increases greater than the rate of inflation (1.0%), according to a previous Kaiser Family Foundation analysis.