Benefit Design

In a new draft guidance document, CMS lays out a litany of tasks Medicare Part D plans must complete to help enrollees take advantage of an Inflation Reduction Act (IRA) provision that allows people to pay off their prescription drug copays over time.

The memo is the second draft guidance document released by CMS regarding the Medicare Prescription Payment Plan, or “copay smoothing” — a program that the managed care sector appears to be growing uneasy about.

“Part D smoothing is coming; it’s coming like a typhoon,” said Nikki Hungate, an industry consultant speaking at the 7th Annual Medicare Advantage Leadership Innovations conference, held Jan. 30-31 in Scottsdale, Arizona.

A study published this month in JAMA Health Forum indicates people with diabetes can see short-term health benefits from enrolling in plans offering preventive drug lists (PDLs) that sharply reduce or eliminate cost-sharing for certain medications. However, the study’s lead author and a pharmacy benefits consultant tell AIS Health, a division of MMIT, that more work needs to be done to evaluate whether such programs are cost-effective for employer-sponsored plans.

Still, they were encouraged with the results, which found that people who switched to plans with PDLs had an 8.4% reduction in acute, preventable diabetes complication days compared with the non-PDL group. In addition, there was a 10.4% reduction in preventable diabetes complication days among members from lower-income areas who switched to PDLs.

A recent report from Morgan Health, JP Morgan Chase & Co.’s health care venture fund and consultancy, documents troubling disparities for health care access and outcomes among Black, Asian American and Hispanic employer-sponsored insurance plan members; lesbian, gay and bisexual (LGB) plan members; and ESI members with low incomes. Experts tell AIS Health, a division of MMIT, that plan sponsors and insurers must consider plan design and provider incentives, among other strategies, to close health disparity gaps.

Plan sponsors and insurers can take proactive steps to reduce health disparities among their plan members, experts say — and they add that there are clear business incentives for doing so.

In late 2023, the FDA approved a new treatment regimen for urothelial cancer that represents a “paradigm change,” according to one industry expert. The cost of the therapy, however, could pose a barrier to its uptake.

On Dec. 15, 2023, the FDA approved Pfizer Inc. and Astellas Pharma Inc.’s Padcev (enfortumab vedotin-ejfv) in combination with Merck & Co., Inc.’s Keytruda (pembrolizumab) for the treatment of people with locally advanced or metastatic urothelial cancer (la/mUC). The agency gave accelerated approval to this combination for people with la/mUC who are not eligible for cisplatin-containing chemotherapy on April 3, 2023. The newest approval converts that accelerated approval to full and expands the labeled indication to include the treatment of people eligible for cisplatin chemotherapy. The application had priority review and breakthrough therapy designation.

An ongoing lawsuit over the use of copay accumulators is drawing to a close following the defendants’ and plaintiffs’ motions to dismiss their appeals. The ball is now in the federal government’s and state insurance commissioners’ courts to enforce a district court judge’s ruling, which states that manufacturer assistance must be counted toward patients’ out-of-pocket responsibility unless a brand-name drug has a medically appropriate generic equivalent.

Health plans and PBMs several years ago began implementing copay accumulators — and then a new iteration known as copay maximizers that declare certain drugs non-essential health benefits to avoid covering them per the Affordable Care Act (ACA) — to counter manufacturer copay assistance programs. Before these tools, that 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. With accumulators and maximizers, patients can still use that assistance, but it does not help reduce their out-of-pocket costs.

Physician-administered drugs could catch some windfall due to the Inflation Reduction Act’s Medicare Part D redesign.

Much time and energy has been focused on thinking about how drug pricing, rebating and Part D plan design may shift due to changes set to finish taking effect in 2025, including new caps on enrollee out-of-pocket spend and more liability falling on plans rather than taxpayers.

But a “sleeper issue here is what all of this is going to mean for Medicare Part B drugs,” said Avalere’s Kesley Lang on a January webinar on the health policy outlook for the new year.

“Subpar” Medicare Advantage provider networks are costing the Medicare Advantage industry approximately $23 billion a year, according to Quest Analytics. That was just one of the staggering statistics shared at the 7th Annual Medicare Advantage Leadership Innovations forum, held Jan. 30 and 31 in Scottsdale, Arizona. As speakers discussed common industry themes of health equity, member engagement and quality improvement, the following percentages and dollar amounts helped to illustrate the impact of addressing (or failing to address) these and other health care issues. Click the quote icons below to see what presenters had to say about each one.

A couple of months after the FDA revealed that it was investigating the risks of chimeric antigen receptor T cell (CAR-T) immunotherapies, the agency is seeking updated language in their labels warning about those risks. However, the fact that the FDA is allowing the therapies to remain on the market suggests that their overall benefits outweigh their potential risks, says one industry expert.

In late November, the FDA revealed that it was investigating the risks of CAR-T therapies following reports of T cell malignancies in people who had undergone treatment with the agents. Less than two months later, the agency issued safety labeling change notification letters to the six available B cell maturation antigen (BCMA)-directed or CD-19 directed autologous CAR-Ts, which cover a range of hematologic cancers:

While the FDA approved a large number of specialty drugs in 2023, payers shouldn’t let their attention wander in 2024. Multiple potential blockbusters are slated for decisions by the agency this year, as are several biosimilars and generic versions of specialty medications. Gene therapies will continue to garner headlines — and payer dollars. All of these trends and more point to an active year ahead within the specialty pharmacy space. AIS Health, a division of MMIT, spoke with some industry experts about what’s on board.

AIS Health: What are some specialty pharmacy issues to keep an eye on in 2024, and why?

In two recent proposals, CMS outlines numerous changes to technical aspects of the Medicare Part D program — many of which are related to provisions in the Inflation Reduction Act (IRA) that restructured the Part D benefit phases. Sources tell AIS Health, a division of MMIT, that the proposals could have both positive and negative effects on Part D plan sponsors and beneficiaries and will likely attract a bevy of industry feedback.

The documents in question are the 2025 Advance Notice of payment changes for Medicare Advantage and Part D plans and the Draft 2025 Part D Redesign Program Instructions. While the Advance Notice is unveiled around the same time every year, the draft Part D redesign instructions are being issued to help implement provisions of the IRA that make major changes to the structure of the Part D benefit.