Benefit Design

Since CVS Health Corp. dropped the blockbuster drug Humira (adalimumab) from its national commercial template formularies on April 1, the number of prescriptions written for Humira biosimilars has jumped from just 5% to 36%, according to a recent equity analyst report.

Speakers at the Academy of Managed Care Pharmacy (AMCP) conference in New Orleans said the development is encouraging and could change the game for future biosimilars — including those in the pipeline for another immunosuppressive drug, Stelara (ustekinumab). But clinicians speaking at the conference also said that the transition to biosimilars has not always gone smoothly for patients.

For example, rheumatologist Mark Box, M.D., said the potential cost savings associated with switching patients to biosimilars compared to the administrative burden on providers “often does not balance.”

Drugs in the Medicare price negotiation process will be at a disadvantage in Part D plans because their lack of manufacturer rebates and discounts will mean lower profits for plans and more pressure on premiums relative to competitors.

The realization is more dreary news for products that end up in the crosshairs of the Inflation Reduction Act (IRA) pricing process, even though the law requires Part D plans to cover negotiated drugs. There is no requirement that plans put those products on a preferred formulary tier, nor are there limits on utilization management tools like prior authorization or step therapy that plans can impose.

Medicare Advantage plan design — particularly the cost of premiums — has a major influence on who chooses to enroll. The variance in that enrollment mix can have a big impact on outcomes and utilization, according to a new white paper from Inovalon and Harvard Medical School. Using Inovalon’s Medical Outcomes Research for Effectiveness and Economics Registry dataset, which tracks demographic and outcomes information for about 30% of the MA population at any given time, researchers found that socioeconomically disadvantaged populations were more attracted to MA, especially zero-premium products.

“Our research challenges the misconception that Medicare Advantage is a monolith, revealing significant differences in plan designs and features and how those variables affect enrollment and outcomes,” Boris Vabson, Ph.D., a health economist at Harvard Medical School and co-lead researcher on the project, said in an April 8 statement released alongside the research.

As Medicare Advantage insurers face revenue headwinds driven by changes to risk adjustment, Star Ratings and benchmark rates, one overarching question at recent conferences and webinars has been, how will MA plans do more with less? Medicare beneficiaries in recent years have flocked to MA largely because of rich benefit offerings they can’t get in fee-for-service Medicare, and they have grown accustomed to items like comprehensive dental, flex cards and fitness benefits. But as the June 3 bid deadline approaches, insurers are considering what benefits they may have to tweak and how they’ll market those benefits to consumers for 2025.

During an April 3 webinar cohosted by Deft Research and Rebellis Group, Deft Vice President of Client Services Rob Lourenço said the market is already showing signs of revenue changes trickling down to the consumer. In its latest Medicare Shopping and Switching Study, Deft observed a slight “pullback in certain benefits” and at a high level saw more removals of benefits than additions this year. Comparing plans that were offered in both 2023 and 2024, Deft saw that routine eye exam coverage remained stable, while 4% of plans removed eyewear coverage and 1% added the benefit, resulting in a net decline of -3% for eyewear access.

Millions of seniors report needing long-term services and supports that can assist with daily activities and disease management, but many don’t qualify for Medicaid, the primary source of LTSS coverage. Medicare Advantage plans have stepped up to fill in the gap with “LTSS-like” supplemental benefits, which range from select Special Supplemental Benefits for the Chronically Ill such as home modifications and service dog support, to Expanded Primarily Health-Related Benefits, including adult day services, in-home support services and caregiver support.

New research from ATI Advisory explores who has access to and ultimately enrolls in MA plans that offer LTSS-like supplemental benefits. The analysis of CMS data found that 82% of Medicare-only beneficiaries (i.e. those who are not dually eligible for Medicaid) have access to at least one plan that offers at least one LTSS-like benefit. Despite the wide availability of LTSS-like plans — particularly in high-population urban areas — just 9% of beneficiaries are enrolled in them, representing about 2 million people.

While CMS has thus far declined to take action on companies using copayment accumulators, the agency is moving forward to prohibit the use of a similar type of program, it revealed in the final 2025 Notice of Benefit and Payment Parameters (NBPP). Still, the rule — at least at this point — applies only to certain plan sponsors, and it is unclear how manufacturer patient assistance ultimately will be treated.

Several years ago, health plans and PBMs began implementing copay accumulators to counter manufacturer copay assistance programs. A next-generation version of these tools known as copay maximizers soon followed.

Before these tools, manufacturer assistance would count toward beneficiaries’ annual out-of-pocket expenses. When those out-of-pocket maximums were reached, health plans would cover the remainder of members’ costs for the year.

When then-President Barack Obama signed the Affordable Care Act (ACA) into law on March 23, 2010, he established the 351(k) biosimilar pathway via the Biologics Price Competition and Innovation Act (BPCIA), which amended the Public Health Service (PHS) Act. Since then, the FDA has approved almost 50 biosimilars, with nearly one fifth of those gaining interchangeable status. That distinction, however, has been increasingly under fire, most recently in President Biden’s fiscal year (FY) 2025 budget, which proposes eliminating the interchangeability designation entirely. That could help boost uptake of biosimilars, resulting in prescription drug savings, say some industry experts.

In contrast to the EU, whose European Medicines Agency (EMA) and the Heads of Medicines Agencies (HMA) clarified in September 2022 that all biosimilars approved in the EU are interchangeable, the FDA has created two levels of biosimilars: biosimilars and interchangeable biosimilars.

Litigation against health plans over alleged mental health parity violations has proliferated in recent years, with judges notably ruling in favor of UnitedHealth Group and against Elevance Health, Inc. Things may get even more complicated with the Biden administration likely to propose more mental health parity regulation this year, according to attorneys from Manatt, Phelps & Phillips, LLP.

Mental health parity rules, which rely on statutes including the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the Consolidated Appropriations Act, 2021, require health plans to cover behavioral health and substance use disorder (SUD) treatment at the same level as medical/surgical benefits.

As CMS engages in the initial round of Inflation Reduction Act (IRA)-mandated drug price negotiations with manufacturers, one of the agents on the list of Medicare Part D drugs to be negotiated has certain aspects that make it a not-so-straightforward candidate. Stelara (ustekinumab) from the Janssen Pharmaceutical Companies of Johnson & Johnson has particular qualities that could result in unintended consequences, asserts one industry expert.

Stelara is unique among the first drugs to be negotiated in that it is available in both subcutaneous and intravenous formulations. The human interleukin-12 and -23 antagonist is approved for subcutaneous use for the treatment of people at least 6 years old with moderate to severe plaque psoriasis who are candidates for phototherapy or systemic therapy and people at least 6 with active psoriatic arthritis. It also is approved for the treatment of adults with moderately to severely active Crohn’s disease and adults with moderately to severely active ulcerative colitis, for whom treatment is initiated with a single intravenous dose, followed by subcutaneous maintenance dosing.

Most seniors are happy with their health benefits, whether they get coverage via Medicare Advantage or traditional Medicare, but some pain points persist across programs. And when it comes to supplemental benefits that have attracted members to MA, a sizable portion of beneficiaries aren’t even using them. That’s according to new research from the Commonwealth Fund, which released results from its 2024 Value of Medicare Survey last month.

The nationally representative survey of 3,280 Medicare beneficiaries found that a whopping 96% of MA members said their coverage fully or somewhat met their expectations, vs. 93% of traditional Medicare enrollees. Medicare-Medicaid dual eligibles, meanwhile, were much more satisfied with MA than their counterparts in traditional Medicare. The most common reasons beneficiaries reported any dissatisfaction with their coverage were a lack of covered services, uncertainty about benefits and affordability issues. MA beneficiaries were slightly more likely to report frustrations with costs and coverage limitations.