Drug Pricing

Commercial Payers Wrestle With Managing Weight Loss Drug Coverage

With the launch of a new website, Eli Lilly and Co. recently became the first pharmaceutical company to offer weight loss medications though a telehealth provider. The platform — LillyDirect — comes less than two months after Lilly’s weight loss drug Zepbound (tirzepatide) gained FDA approval and joined fellow glucagon-like peptide 1 (GLP-1) agonists from Novo Nordisk A/S, Wegovy (semaglutide) and Saxenda (liraglutide), in the burgeoning obesity drug market.

The weight loss medication market is currently dominated by Wegovy, a once-weekly injectable drug. The FDA initially approved semaglutide for Type 2 diabetes under the brand name Ozempic, but the agency expanded the indications to include weight management three years ago. Pharmacy formularies that cover more than half of commercial-plan enrollees categorize Wegovy as “preferred” or “preferred with utilization management restrictions,” — such as prior authorization and/or step therapy — according to MMIT Analytics. (MMIT is the parent company of AIS Health.)

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© 2024 MMIT

Drug Utilization Is Down in Medicaid, but Spending Continues to Climb

Medicaid drug spending shows no signs of slowing despite a drop in prescriptions, according to new research from KFF. Net spending on prescription drugs grew 47% to $43.8 billion from fiscal year (FY) 2017 to 2022. The average Medicaid enrollee had 11.4 prescriptions in FY 2017, with a net spend of $39 per prescription. In FY 2022, the number of prescriptions per enrollee dropped to 9.4, while net spending per prescription rose to $58.

Meanwhile, Medicaid enrollment climbed to historic levels amid the COVID-19 pandemic, reaching 96.3 million lives in June 2023, according AIS’s Directory of Health Plans (DHP). With the end of the COVID-era continuous enrollment provision, states are now in the middle of a lengthy — and sometimes controversialunwinding process. Yet utilization (the overall number of prescriptions) stayed under 2017 levels despite the enrollment boom. That could be because the number of days supplied per prescription has increased, with 90-day supplies becoming more common, in addition to lower utilization overall.

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© 2024 MMIT

Some Proposed Changes to ACA Marketplace Rules Aren’t Legal, Insurers Say

Health insurer trade groups have several bones to pick with the proposed 2025 Notice of Benefit and Payment Parameters (NBPP), the annual regulation that sets the rules of the road for the Affordable Care Act exchanges. In the case of certain proposals, AHIP and the Blue Cross Blue Shield Association (BCBSA) are even arguing that CMS is exceeding its legal authority.

Those proposed rule changes concern the process that states use to define their essential health benefits (EHB) benchmark plans, according to comments on the 2025 NBPP filed on or before a Jan. 8 deadline. The ACA lists 10 general categories of EHB that all individual market plans must cover — such as emergency services and prescription drugs — allowing states to determine the specific services that are included in those broad categories. To do that, state officials select a benchmark plan among a list of HHS-approved options, and insurers then use that benchmark to design their benefits.

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© 2024 MMIT

Obesity Meds, Gene Therapies, NASH Drug Make Payers’ Cost Concern List

For years, payers have been concerned about the rising prices of prescription medications and how to cover newly approved drugs. Pharmaceutical experts tell AIS Health, a division of MMIT, that PBMs and plans will continue to be challenged in 2024 with similar issues, particularly when it comes to gene therapies, obesity medications and other expensive products.

Andy Szczotka, Pharm.D., chief pharmacy officer at AscellaHealth, notes that more than half of pharmacy benefit spending is on specialty medications even though only a small percentage of members use those drugs.

He says dealing with high-cost specialty products “is a focus for most payers” and adds there is a “large target on specialty drugs.”

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© 2024 MMIT

After Big, Bruising 2023, This Year May Be Quieter for PBMs

Although 2023 trained a harsh spotlight on the country’s dominant PBMs — pressuring some to introduce new pharmacy pricing models — industry observers tell AIS Health, a division of MMIT, that this year may not be nearly as paradigm-shifting.

Take, for example, potential policy action aimed at changing PBMs’ increasingly criticized business models, particularly those associated with the Big Three PBMs: The Cigna Group’s Express Scripts, CVS Health Corp.’s Caremark, and UnitedHealth Group’s Optum Rx.

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© 2024 MMIT

Commercial Payers Wrestle With Managing Weight Loss Drug Coverage

With the launch of a new website, Eli Lilly and Co. recently became the first pharmaceutical company to offer weight loss medications though a telehealth provider. The platform — LillyDirect — comes less than two months after Lilly’s weight loss drug Zepbound (tirzepatide) gained FDA approval and joined fellow glucagon-like peptide 1 (GLP-1) agonists from Novo Nordisk A/S, Wegovy (semaglutide) and Saxenda (liraglutide), in the burgeoning obesity drug market.

The weight loss medication market is currently dominated by Wegovy, a once-weekly injectable drug. The FDA initially approved semaglutide for Type 2 diabetes under the brand name Ozempic, but the agency expanded the indications to include weight management three years ago. Pharmacy formularies that cover more than half of commercial-plan enrollees categorize Wegovy as “preferred” or “preferred with utilization management restrictions,” — such as prior authorization and/or step therapy — according to MMIT Analytics. (MMIT is the parent company of AIS Health.)

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© 2024 MMIT

CVS Removes Humira From Formulary — But the Fine Print Is Key

CVS Health Corp.’s PBM, CVS Caremark, said recently that it will remove AbbVie’s immunosuppressive drug Humira (adalimumab) from its major national commercial template formularies. The move comes on the heels of a year in which 14 near-identical copies of the world’s best-selling drug entered the U.S. market after years of delays, leading major PBMs to generally put selections of several biosimilars on the same coverage tiers as their reference product.

Yet while Wall Street analysts heralded CVS’s decision as an indication that it’s become a trailblazer in the biosimilar space, one prominent PBM critic remains skeptical of the company’s motivations — especially since CVS is working with Humira’s manufacturer on a new cobranded version of the drug.

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© 2024 MMIT

Legal Battle Over Copay Accumulators Continues; Questions Remain Over HHS Policy Enforcement

A district court judge wasted no time in responding to the latest motion in an ongoing lawsuit filed against HHS by patient advocacy groups over the use of copay accumulators. In his decision, the judge reiterated his September decision vacating one rule and reinstating another that prohibits the use of accumulators for drugs that do not have a medically appropriate generic equivalent. It’s not entirely clear what next steps will be, but one patient advocacy group says it hopes to see HHS enforce the policy limiting plans’ use of accumulator programs.

While pharma manufacturers began offering the programs to help patients stay on costly therapies, payers have pushed back, saying they lead to higher-cost agents to be used over lower-cost ones. At the same time, similar programs, such as copay maximizers and alternate funding programs, have increased in use, to payers’ dismay.

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© 2024 MMIT

News Briefs: Walgreens Agrees to Pay Humana $360 Million to Settle Pricing Allegations

Walgreens Boots Alliance Inc. agreed to pay Humana Inc. $360 million to settle allegations that Walgreens’ retail pharmacies overcharged for prescription drugs. Walgreens said in a Jan. 4 U.S. Securities and Exchange Commission filing that it had paid $150 million of the settlement amount last month. In May 2023, Walgreens filed a lawsuit asking a judge to overturn a $642 million arbitration judgement awarded to Humana two months earlier. Walgreens has faced other lawsuits in recent years alleging the company overcharged for medications. For instance, Walgreens in 2019 paid the federal government and states a $269.2 million settlement related to allegations that it improperly billed Medicare, Medicaid and other health care programs for insulin pens. And in 2022, three Blue Cross and Blue Shield affiliates sued Walgreens over generic medication pricing.

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© 2024 MMIT

Lilly’s Direct-to-Consumer GLP-1 Service Likely Doesn’t Threaten PBMs

Eli Lilly & Co. will sell its glucagon-like peptide-1 (GLP-1) weight loss drugs directly to consumers through a telehealth service called LillyDirect, the drugmaker revealed on Jan. 4. Pharmacy benefit experts say that the move is sure to improve market access for Lilly’s weight loss drugs, but they also say that the impact of the new service on PBMs is likely to be minimal.

LillyDirect will contract with “independent healthcare providers,” per a press release, to prescribe the GLP-1 tirzepatide, known by the brand names Mounjaro () and Zepbound. Weight loss-focused telehealth provider Form Health Inc. will be one of those partners, NBC News reported. LillyDirect will also provide “tailored support” from unnamed providers. The service will also feature free “direct home delivery…through third-party pharmacy dispensing services.”

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© 2024 MMIT