Spotlight on Market Access

The guessing game surrounding the identities of the first 10 drugs to be selected for Medicare price negotiations under the Inflation Reduction Act (IRA) finally ended on Aug. 29 when CMS published the list of agents. While many on the list were expected, there were still a few surprises, and other uncertainties around the process remain, industry experts say.

The first 10 Medicare Part D drugs selected by CMS to be negotiated — listed in order of their total Part D gross covered prescription drug cost from June 1, 2022, through May 31, 2023 — are:

Founded by a physician in 1980 as a primary care clinic for low-income Californians, Molina Healthcare is now the fourth-largest Medicaid insurer in the U.S., serving more than 4 million lives. In addition to its Medicaid products, Molina also offers Affordable Care Act exchange plans in 16 states and is growing its Medicare Advantage (MA) business. The insurer in June unveiled a $600 million deal to acquire struggling insurtech Bright Health's California MA assets, which is expected to close in the first quarter of 2024. Molina has been on an acquisition spree of smaller, public sector-focused insurers in recent years. Other deals include its purchases of YourCare Health Plan, Affinity Health Plan, Magellan Complete Care, Senior Whole Health, Passport Health Plan and My Choice Wisconsin.

Two patient advocacy groups are declaring victory after Blue Cross Blue Shield of North Carolina made midyear formulary changes that shifted several HIV treatments from higher to lower tiers, meaning patients can access them at much lower cost-sharing levels.

In an Aug. 31 press release, the HIV+Hepatitis Policy Institute and the North Carolina AIDS Action Network pointed out that the move came after they filed discrimination complaints with the North Carolina Dept. of Insurance and HHS’s Office for Civil Rights arguing that the Blue Cross NC formulary violated the Affordable Care Act’s prohibitions against discriminatory plan design. The formulary in question is the Blue Cross and Blue Shield of North Carolina Essential Formulary, which applies to ACA marketplace plans sold in the state.

Major blood thinners are among the first 10 prescription drugs for which the Biden administration will seek lower Medicare prices as part of the Inflation Reduction Act (IRA). The negotiated prices will be announced on Sept. 1, 2024, and go into effect in 2026.

Medicare beneficiaries who filled prescriptions for the 10 selected drugs paid a total of $3.4 billion in out-of-pocket costs for those therapies in 2022. The Medicare program paid more than $50 billion for the drugs between June 2022 and May 2023, CMS reported. Bristol Myers Squibb’s blood thinner Eliquis (apixaban) alone accounted for more than $16 billion.

Digital health funding hit a six-year low in the second quarter of 2023, dropping for the sixth quarter in a row. That’s one of the findings of CB Insights’ State of Digital Health Q2’23 report. And while funding is unlikely to return to the peaks it saw in 2021, the industry may be undergoing more of a reset to funding seen in 2018-2019.

“The headline here really is that digital health funding has hit a six-year low,” remarked Chris Sekerak, intelligence analyst II at CB Insights, speaking during an Aug. 10 webinar titled Digital Health’s Midyear Review & What to Expect Next. For the second quarter of 2023, funding on a global basis dropped to $3.4 billion, a 3% decline from $3.5 billion in the first quarter. The last time that funding was this low was third-quarter 2017.

The FDA recently granted another approval to Taiho Pharmaceutical Co., Ltd. division Taiho Oncology, Inc.’s Lonsurf (trifluridine/tipiracil) for a type of colorectal cancer. The decision provides another treatment option for a condition that respondents to a Zitter Insights survey regard as in need of more effective therapies.

On Aug. 2, the FDA approved Lonsurf as a single agent or in combination with bevacizumab for the treatment of adults with metastatic colorectal cancer previously treated with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy, an anti-vascular endothelial growth factor (VEGF) drug and, if Rat sarcoma (RAS) wild-type, an anti-epidermal growth factor receptor (EGFR) therapy. The agency first approved the oral nucleoside antitumor agent on Sept. 22, 2015. The newest use had priority review. Dosing for the tablet is 35 mg/m2 twice daily on days one through five and days eight through 12 of each 28-day cycle. Drugs.com lists the price of 20 6.14 mg/15 mg tablets as more than $4,204.

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.