Drug Pricing

Drug Price Negotiation Will Require New CMS Regulations, Staffing

Now that Medicare can negotiate the price of prescription drugs it purchases, the Biden administration needs to figure out how it will hash out deals with drugmakers. Experts tell AIS Health, a division of MMIT, that implementation of the long-sought negotiation program will come with plenty of challenges and pitfalls.

The administration will have to issue new regulations, hire hundreds of staff, determine which drug prices will be negotiated first and design the criteria that will select drugs for negotiation in the future.

Accelerated Approval Prices Are Unrelated to Clinical Value, Study Says

The manufacturers of many drugs granted accelerated approval by the FDA do not complete timely confirmatory trials of the drugs’ efficacy, according to a recent study published in the journal Health Affairs — meaning that the pricing for many accelerated approval drugs has nothing to do with their clinical efficacy. The study’s author tells AIS Health, a division of MMIT, that “the market doesn’t work very well” for drugs that have received accelerated approval, and “what it leads us to is overpaying at the beginning and underpaying, potentially, later.”

After a drug is granted accelerated approval, the FDA mandates that the drug be evaluated using confirmatory clinical trials. The accelerated approval designation is given to new, unproven drugs that could potentially meet a dire need for a new or more effective therapy to treat a terminal disease. The intention behind the confirmatory trial system is to make sure that the drug actually does what its developer says it will.

Study: Pharma Companies Often Profit From Donations to Patient Assistance Charities

Pharmaceutical companies often profit from their donations to non-profit patient assistance charities that are intended to help people afford high-cost medications, according to a study published in this month’s edition of the journal Health Affairs.

HHS’s Office of Inspector General (OIG) has provided guidance on the charities and cracked down in recent years on several charities and drug manufacturers. However, the authors noted that “the current regulations or enforcement permit donations that violate the spirit of Medicare’s Anti-Kickback Statute,” which prohibits pharma companies from covering Medicare Advantage enrollees’ out-of-pocket drug spending for the drugs they manufacture.

Payers Report Cost Savings From Shifting to Biosimilars

As FDA approval of biosimilars continues and agents are expanding into new indications, more payers are using these drugs and seeing cost savings through that utilization, according to Zitter Insights.

When the FDA approved Fresenius Kabi’s Stimufend (pegfilgrastim-fpgk) on Sept. 1, it was the sixth biosimilar of Amgen Inc.’s Neulasta (pegfilgrastim) that the agency had approved. It also was the 38th biosimilar approved since the first one, Novartis Pharmaceutical Corp. division Sandoz’s Zarxio (filgrastim-sndz), was approved March 6, 2015, referencing Amgen’s Neupogen (filgrastim).

New Suit Claims Copay Accumulators Violate ACA, but Will Judge Agree?

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.

News Briefs: Centene Reaches 11th Settlement Over PBM Practices

Centene Corp. agreed to pay Washington $19 million to resolve allegations that it overcharged the state’s Medicaid program for pharmacy benefit management services. As part of the resolution, Centene will pay an additional $13 million to the federal government “for administration of Medicaid in Washington state,” according to a press release from Washington’s attorney general. The agreement with Washington is Centene’s 11th such settlement with a state regarding how its PBM subsidiary Envolve administered pharmacy benefits in Medicaid.

The public will likely need annual COVID-19 vaccinations in the future, similar to how the flu is treated, White House officials said during a recent press briefing. “It is becoming increasingly clear that, looking forward with the COVID-19 pandemic, in the absence of a dramatically different variant, we likely are moving towards a path with a vaccination cadence similar to that of the annual influenza vaccine, with annual, updated COVID-19 shots matched to the currently circulating strains for most of the population,” said Anthony Fauci, M.D., the president’s chief medical adviser. Ashish Jha, the White House’s coronavirus response coordinator, said the U.S. is able to pursue this strategy because it now has vaccines available that match the dominant strain circulating — a first since the pandemic started. However, some “vulnerable groups” might continue to need more frequent vaccination against COVID-19, Fauci said on Aug. 6.

FDA Committee Backs ALS Drug as ICER Questions Projected Cost

By a seven to two margin, an FDA advisory committee on Sept. 7 voted that there was enough evidence to support the approval of AMX0035, an oral medication that Amylyx Pharmaceuticals, Inc. is developing for amyotrophic lateral sclerosis (ALS). The vote represented a reversal for the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee (PCNSDAC), which on March 30 had recommended against the medication’s approval.

Despite the committee's decision, David Rind, M.D., chief medical officer of the nonprofit Institute for Clinical and Economic Review (ICER), tells AIS Health that Amylyx may have trouble getting the drug covered due to the medication’s likely high cost and lack of clear effectiveness.

Survey Finds That Payers Are Covering Sequential Use of SMA Agents

A recent FDA approval of a label expansion put the three marketed therapies for spinal muscular atrophy (SMA) on equal footing for the youngest patients. And recent survey found that many payers are covering sequential use of the costly agents, including a gene therapy.

The FDA initially approved Evrysdi (risdiplam) from Roche Group member Genentech USA, Inc. on Aug. 7, 2020, for the treatment of SMA in people at least 2 months old. On May 30, 2022, the agency expanded the drug’s label to include the treatment of infants less than 2 months old. The survival motor neuron 2 (SMN2) splicing modifier is an oral solution administered by mouth or feeding tube and can be administered by a patient or caregiver at home after a recommended consultation with a health care professional prior to the first dose.

New Suit Claims Copay Accumulators Violate ACA, but Will Judge Agree?

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.

Specialty Trend Rose in 2021, but Biosimilars Are Having Impact

Specialty drug trend in 2021 largely recovered from the hit it took from the COVID-19 pandemic in 2020, driven mainly by an increase in utilization. That’s according to the 2022 Artemetrx State of Specialty Spend and Trend Report from Pharmaceutical Strategies Group (PSG), an EPIC company.

Published in August, the report is sponsored by specialty pharmacy Reliance Rx. Findings are based on an Artemetrx analysis of 73.9 million medical claims and 55.1 million pharmacy claims from PSG’s book of business. It is the sixth annual version of the report.