Drug Pricing

Seniors who experienced fluctuations in eligibility for Medicare Part D’s low-income subsidy (LIS) spent more money on prescription drugs and filled fewer prescriptions overall, according to new research published in JAMA Health Forum. While researchers said questions remain about whether these temporary losses can impact medication adherence and health outcomes — particularly among non-white seniors — policymakers should consider streamlining LIS eligibility systems to reduce administrative barriers.

In 2023, 13.4 million Part D beneficiaries received full or partial LIS benefits. The program provides assistance with paying premiums and deductibles, and it reduces any post-deductible cost sharing for beneficiaries. The majority of LIS beneficiaries are “deemed,” meaning they are automatically enrolled in the program based on dual eligibility with Medicaid and/or enrollment in a Medicare Savings Program (MSP). (This also includes non-duals who receive Supplemental Security Income.) But 17% of LIS beneficiaries are “nondeemed,” meaning they are not enrolled in Medicaid or an MSP and must apply for LIS themselves. All LIS beneficiaries undergo annual redeterminations, but the process for deemed beneficiaries is automatic, leaving the nondeemed population to face potential administrative challenges and unnecessary coverage loss.

The pharmaceutical and health products industry, which has consistently outspent all other industries on federal campaign contributions and lobbying, spent nearly $378.6 million in 2023 to further policy goals, according to data compiled by OpenSecrets.

With the 2024 presidential election around the corner, the pharma/health products industry nearly evenly distributed their donated campaign funds to Democratic and Republican lawmakers during the 2023-2024 election cycle. Among the 20 lawmakers who received the most contributions from the industry, nine are Democrats. President Joe Biden, who is running for re-election this year, topped the list, receiving over $232,000.

Payers face challenges incorporating drug spending into value-based payment models, making it difficult to reduce overall health care costs, according to panelists who participated in a session at the virtual Value-Based Payment Summit on Jan. 31. The speakers were encouraged with the increased attention being paid to expensive medications and difficulties in ensuring people take their prescriptions. However, they stressed that more needs to be done to educate providers and ensure pharmacy spending is in check.

Frank W. McStay, II, assistant research director at the Duke University Margolis Institute for Health Policy and the session’s moderator, noted the federal government and states have recently proposed and implemented policies to reduce drug costs and increase access to medications. For instance, the Biden administration on Jan. 30 announced that it planned to increase access to sickle cell treatments via the Cell and Gene Therapy (CGT) Access Model that CMS introduced last year.

The pharmaceutical and health products industry, which has consistently outspent all other industries on federal campaign contributions and lobbying, spent nearly $378.6 million in 2023 to further policy goals, according to data compiled by OpenSecrets.

With the 2024 presidential election around the corner, the pharma/health products industry nearly evenly distributed their donated campaign funds to Democratic and Republican lawmakers during the 2023-2024 election cycle. Among the 20 lawmakers who received the most contributions from the industry, nine are Democrats. President Joe Biden, who is running for re-election this year, topped the list, receiving over $232,000.

UnitedHealth Group’s Optum division recently launched a new direct-to-consumer telehealth prescribing venture as part of its Optum Perks vertical, joining a crowded field of DTC prescribing and dispensing. Experts say that the Optum Perks debut is proof that DTC prescribing around “lifestyle drugs” will likely continue to grow rapidly, but they say that there are clear downsides around utilization management and care coordination — particularly where glucagon-like peptide-1 (GLP-1) agonists are concerned.

Optum Perks’ rollout follows closely on the heels of Eli Lilly & Co.’s Lilly Direct launch, which also saw a health care giant steer into DTC prescribing waters. Lilly and industry watchers say that Lilly Direct is mainly intended to dispense its tirzepatide GLP-1 drugs, known by the brand names Mounjaro and Zepbound. Patients may or may not be able to obtain GLP-1s from Optum Perks; UnitedHealth’s press release doesn’t have a comprehensive list of drugs offered under the service, although it says that “low-cost care and prescription treatments for hundreds of conditions ranging from acne to a cough to high blood pressure” are available.

During the recent fourth-quarter earnings calls held by their diversified parent companies, the Big Three PBMs — The Cigna Group’s Express Scripts, UnitedHealth Group’s Optum Rx and CVS Health Corp.’s Caremark — factored prominently into discussions of the firms’ financial results and future growth strategies.

When CVS Health reported its quarterly and full-year results on Feb. 7, CEO Karen Lynch wasted little time before describing what she called CVS’s “innovative models and offerings that create more transparency and choice for consumers and clients.”

U.S. patients paid an estimated 278% more for prescription drugs than patients in other high-income countries did for the same drugs in 2022, according to a RAND Corp. study. U.S. gross prices for brand-name originator drugs were 422% higher than drugs in the comparison countries, RAND found; after rebates were applied, brand-name drugs still cost more than three times the amount paid in other countries. Unbranded generics were the only category that were not “substantially higher” in price than drugs in other countries. As RAND pointed out, unbranded generics account for 90% of U.S. drug volume but just 8% of total drug spending at manufacturer gross prices.

A Johnson & Johnson employee sued the firm over allegations that the medical manufacturing giant overpaid for prescription drugs dispensed by the firm’s employee health plan — which she alleges is a violation of J&J’s fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA). The suit is part of what some legal experts have predicted will be a “” of litigation against plan sponsors that may have paid more than they should have for certain health care services and products, potentially including prescription drugs or pharmacy benefits. The plaintiff in the suit is Ann Lewandowski, a health care policy and advocacy director at J&J, STAT reported.

Blue Shield of California’s plan to replace its traditional pharmacy benefit arrangement with what it hopes will be a more transparent assemblage of services won’t go into full effect until 2025, but it has already generated a lot of hope and criticism across the healthcare landscape. The insurer, though, is aiming to inspire as much at it aiming to succeed on its own.

“It’s going to take more than just one plan, or one employer group or one manufacturer. It’s going to take all of us to look at our business model and think about how it can be simpler, more sustainable, more affordable, with higher quality care,” Alison Lum, Blue Shield of California’s VP-Pharmacy Services, said in an interview with the Pink Sheet on 6 February.

Jan. 12: The FDA broadened the label of Merck & Co., Inc.’s Keytruda (pembrolizumab) to include, in combination with chemoradiotherapy, the treatment of people with FIGO (International Federation of Gynecology and Obstetrics) 2014 Stage III-IVA cervical cancer. The agency initially approved the programmed death receptor-1 (PD-1) inhibitor on Sept. 4, 2014. The indication is the drug’s third in cervical cancer and 39th overall. The application was granted priority review. That review was conducted under Project Orbis in collaboration with the Australian Therapeutic Goods Administration and the Brazilian Health Regulatory Agency, and it used the Assessment Aid. Dosing is 200 mg every three weeks or 400 mg every six weeks via a 30-minute intravenous infusion. The agent’s price for every-three-weeks dosing is $11,115; for every-six-weeks dosing, it’s $22,230.

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?