Benefit Management

In December, the FDA approved the two newest cell and gene therapies, which were the first such agents approved for the treatment of sickle cell disease. As more of these products launch onto the U.S. market — the agency previously predicted that it would be approving 10 to 20 of the treatments by 2025 — payers are taking a variety of approaches to managing the therapies. Cost remains the main obstacle to their use, but their long-term durability also remains a question to some extent.

Dec. 8 saw the newest approvals, both for the treatment of sickle cell disease in people at least 12 years old: bluebird bio, Inc’s Lyfgenia (lovotibeglogene autotemcel; lovo-cel) and Vertex Pharmaceuticals Inc. and CRISPR Therapeutics’ Casgevy (exagamglogene autotemcel; exa-cel). The latter agent is the first CRISPR/Cas9 genome-edited cell therapy that the FDA has approved. The FDA gave both applications priority review, orphan drug, fast track and regenerative medicine advanced therapy designations. It also gave Lyfgenia rare pediatric disease designation.

Entering 2024, growing health care costs are the main worry of employer plan sponsors, according to industry experts. To cope with the problem, those experts add, employers may seek novel benefit designs, while also reaching for tried-and-true cost control methodologies like narrower networks.

Brokerage WTW found in a September survey that 69% of surveyed large employers listed health care costs as a “top health and wellbeing priority” over the next three years, and that health care costs were the most frequently named priority by respondents.

“I think that the emphasis on cost is actually bigger now than it was a few years ago,” says Jeff Levin-Scherz, M.D., population health lead at WTW and an assistant professor at the Harvard School of Public Health.

The FDA recently approved the two newest cell and gene therapies, with one of them earning the distinction of being the first of its kind approved by the FDA. As more of these products launch onto the U.S. market — the agency previously predicted that it would be approving 10 to 20 of the treatments by 2025 — payers are taking a variety of approaches to managing the therapies.

Dec. 8 saw the newest approvals, both for the treatment of sickle cell disease in people at least 12 years old: bluebird bio, Inc’s Lyfgenia (lovotibeglogene autotemcel; lovo-cel) and Vertex Pharmaceuticals Inc. and CRISPR Therapeutics’ Casgevy (exagamglogene autotemcel; exa-cel). The latter agent is the first CRISPR/Cas9 genome-edited cell therapy that the FDA has approved. The one-time treatments come with hefty price tags: Lyfgenia is priced at $3.1 million and Casgevy at $2.2 million.

The ulcerative colitis (UC) space has seen multiple new approvals recently that could focus payer management even more on the condition. Payers already take an aggressive approach toward managing branded agents within the class, according to a Zitter Insights survey. That stance, say industry experts, will only grow with the new drugs and administration routes.

While no cure exists for the inflammatory bowel disease, the FDA has approved numerous agents to treat signs and symptoms of the condition. In addition to the nine biosimilars of AbbVie Inc.’s Humira (adalimumab) that have launched in the U.S. in 2023, a handful of other approvals happened from late September through late October. All of the agents offer maintenance dosing either through an oral or subcutaneous route of administration.

For years, health plans have turned to the prior authorization (PA) process to help prevent the use of unnecessary medications or medical procedures, improve patient outcomes and reduce costs. But as their use has exploded, physicians have pushed back, calling the restrictions onerous and accusing them of hampering their ability to provide care. Now, following years of complaints about PA, several health plans are cutting back on their use of the tactic, potentially spurring others to do the same.

Payers have used PA for decades to help reduce low-value or unsafe care, in turn protecting patients from ineffective or even harmful care and cutting down on waste and unnecessary costs for patients and plans alike. A Milliman report commissioned by the Blue Cross Blue Shield Association and published March 30, 2023, found that if PA were eliminated in the commercial market, increases in premiums could be between $43 billion and $63 billion annually.

Since the FDA approved the first biosimilar — Zarxio (filgrastim-sndz) from Sandoz, then a division of Novartis Pharmaceuticals Corp. — on March 6, 2015, the agency has approved more than 40 additional agents via the 351(k) pathway established under the Biologics Price Competition and Innovation Act (BPCIA), itself part of the Affordable Care Act (ACA). This past year has been especially busy in the space, with highlights including the launch of nine biosimilars of AbbVie Inc.’s Humira (adalimumab) and approvals of the first biosimilars of three different biologics: Biogen’s Tysabri (natalizumab), Actemra (tocilizumab) from Genentech USA, Inc., a member of the Roche Group and Stelara (ustekinumab) from the Janssen Pharmaceutical Companies of Johnson & Johnson. As the FDA approves more biosimilars, uptake of these agents will continue to increase, say industry experts.

“2023 was a banner year for the biosimilar market,” contends Andy Szczotka, Pharm.D., chief pharmacy officer at AscellaHealth. “The availability of biosimilars across multiple therapeutic areas provides opportunities for physicians, patients and payers to have additional clinical and cost-saving treatment choices.”

Continuing a theme of protecting consumers and ensuring appropriate use of Medicare dollars, the Biden administration on Nov. 6 released its annual rule proposing policy and technical changes for the Medicare Advantage and Part D program. The 2025 MA and Part D proposed rule contains provisions aimed at improving access to behavioral health, streamlining enrollment options for dual eligibles, encouraging biosimilar product substitution, and assessing the impact of prior authorization policies on health equity. But some of the rule’s most detailed proposals centered on two hot-button program areas: supplemental benefits in MA and misleading marketing practices.  

With more than 78% of Medicaid beneficiaries enrolled in managed care plans as of the latest update to AIS’s Directory of Health Plans (DHP), winning and maintaining state contracts is crucial to MCOs that serve the Medicaid population. Six states have pending requests for proposals (RFPs) that serve about 11 million lives combined, while four states recently awarded new contracts. 

In recent years, new Medicaid RFPs have emphasized population health, asking payers to focus on health equity and social determinants of health while integrating services such as behavioral health, managed long-term services and supports (MLTSS), and pharmacy services into acute care. For example, Georgia will shift its aged, blind and disabled Medicaid population from fee-for-service care delivery to managed care when its new contracts begin, and Virginia plans to combine its MLTSS and managed Medicaid plans into one program. States also want improved analytics capabilities to track member outcomes and simplify claims and appeals processes.  

An analysis of Humana Inc. commercial insurance data from markets across the U.S. shows a wide variation of prices across regions for seven common procedures, according to a research letter published on Oct. 27 in JAMA Health Forum. Benjamin L. Chartock, Ph.D., the study’s lead author, tells AIS Health, a division of MMIT, this is the first peer-reviewed paper that examined data shared by insurers via the final Transparency in Coverage (TIC) rule that HHS and the Depts. of Labor and Treasury released in October 2020.

The TIC regulation went into effect starting in July 2022, with more requirements phasing in this year and next year. Chartock admits that, while insurers as of January 2023 are required to provide on their website a list of prices for 500 shoppable items, services and prescription drugs as well as a price comparison tool to allow people to compare cost-sharing and provider information, “it’s extremely complicated in terms of processing [for consumers], and on its own, it is not very useful data.”

A KFF report released on Nov. 8 found that 3,959 Medicare Advantage plans are available for individual enrollment next year, the second-largest number of plans since 2010 and a 1% decrease from this year. Meanwhile, the average beneficiary will be able to choose from 43 plans, the same as this year's record high. Eighty-nine percent of MA plans will offer prescription drug coverage in 2024; while 83% will offer telehealth benefits; and at least 97% will offer some dental, vision, fitness or hearing benefits.

A group of 32 Reps. led by Jerrold Nadler (D-NY) and Judy Chu (D-CA) sent a letter on Nov. 3 to CMS Administrator Chiquita Brooks-LaSure requesting increased oversight of artificial intelligence tools (AI) used to guide coverage decisions for Medicare Advantage plans. The elected officials wrote that “in recent years, problems posed by prior authorization have been exacerbated by MA plans’ increasing use of AI or algorithmic software managed by firms such as NaviHealth, myNexus, and CareCentrix to assist in their coverage determinations in certain care settings.” They asked CMS to require MA plans to report prior authorization data, compare guidance generated by AI tools with actual coverage decisions and assess whether plans are inappropriately using AI tools.