Drug Pricing

The US Food and Drug Administration’s simultaneous approval of two gene therapies for sickle cell disease from Vertex Pharmaceuticals Incorporated/CRISPR Therapeutics AG and bluebird bio on 8 December provides the competitors an equal start out of the gate, and offers another test for the Rx policy concept that intra-class competition can drive down prices.

Based on the initial list prices, though, it seems like perhaps competition cannot do that, at least not in this case, or at least not yet. Bluebird bio’s Lyfgenia has a wholesale acquisition cost of $3.1m, while the WAC for Vertex and CRISPR’s Casgevy is $2.2m, which might be a significant handicap for bluebird in securing reimbursement.

Hosting its first analyst-focused event in two years, CVS Health Corp. made a splash on Dec. 5 by introducing a pair of new drug reimbursement models, detailing its long-term margin improvement goals, and rebranding its health services segment.

Although the new pharmacy models captured the most headlines, Wall Street analysts also appeared cautiously impressed with the overall picture that CVS painted — depicting a company with ambitious goals to best its rivals in the health benefits, retail pharmacy, care delivery and health services sectors by getting its many moving parts to work together.

The Centers for Medicare and Medicaid Services wants clarification from the federal court that recently ruled against the agency’s interpretation of the law when it comes to commercial insurance plans’ use of copay accumulators before it revises its current policy on such programs.

The Health and Human Services Department filed a motion with the U.S. District Court for the District of Columbia on Nov. 27 seeking an explanation for the court’s late September decision that the policy, which allows plans to use copay accumulators broadly, must be set aside and remanded back to CMS because of the agency’s contradictory reading of the same statutory and regulatory language.

The HHS Office of Inspector General will evaluate the extent and quality of Medicare Part D plan coverage for biosimilars to AbbVie Inc.’s Humira (adalimumab) and expects to issue a report on the study in 2025, according to a recent update to the OIG’s work plan.

The study could provide fodder for reforms to pharmacy benefit manager rebating practices and for changes in Part D coverage policy that could help boost the uptake of biosimilars. Stakeholders and policy makers have viewed adalimumab biosimilars as a test case for the viability of the biosimilar model.

Most employer-sponsored plans that have stop-loss insurance coverage should be able to pay for expensive gene therapies that have proven to be cost-effective, according to a recent paper from Health Affairs Scholar. However, a separate Health Affairs analysis published this month argues that payers must assess alternative payment models to afford the medications, which can cost more than $1 million per dose.

Aaron S. Kesselheim, M.D., one of the authors of the latter Health Affairs paper says that plans have taken varied approaches to paying for gene therapies ranging from “extremely permissive to extremely tight coverage.”

Depending on whom you ask, a new “cost-plus pharmacy pricing” option from The Cigna Group’s Express Scripts is either a half-hearted attempt to compete with true market innovation or an offering that simplicity-seeking PBM clients are likely to embrace. However, industry experts agree on one thing: The model was clearly inspired by Mark Cuban Cost Plus Drug Co.

“I’m not surprised to hear that Express Scripts is rolling this out. The Mark Cuban company set the pathway for this to happen; their business is growing pretty quickly,” says Marc Guieb, Pharm.D., a consulting pharmacist at Milliman. He notes that Blue Shield of California in August awarded a contract to Cost Plus Drugs to manage retail pharmacy pricing and payment for the insurer’s members, as part of an “unbundling” of Blue Shield’s current PBM contract with CVS Health Corp.

Zepbound (tirzepatide), Eli Lilly and Co.’s latest glucagon-like peptide 1 (GLP-1) agonist product and Lilly's first entrant in that category to be marketed only as a weight loss drug, garnered FDA approval on Nov. 8. The approval intensified already fierce public interest in using GLP-1s for weight loss — which could be bad news for payers, especially commercial plan sponsors, who were already concerned before Zepbound’s approval that the high cost and broad appeal of the drugs will cause premiums to spike.

A recent WTW survey found that 38% of employer-backed health plans cover weight loss drugs, while 22% are considering adding coverage. Mercer found that 42% of large employers cover GLP-1 drugs for weight loss. Brokers and employer plan sponsor trade groups have identified burgeoning GLP-1 utilization as a possible reason for future premium hikes.

The Cigna Group’s Express Scripts PBM announced on Nov. 14 that it’s launching a new “cost-plus” prescription drug pricing model for its clients. With the Express Scripts ClearNetwork, “clients pay a straight-forward estimated acquisition cost for individual medications, in addition to a small markup for pharmacy dispensing and service costs.” Express Scripts plans on launching the model in early 2024 and applying it toward generic, branded and specialty drugs. The move comes amid rising scrutiny from regulators over PBMs’ standard business practices like spread pricing, which allows PBMs to pocket the difference when pharmacies charge less for filling prescriptions than payers reimburse.

Five health care organizations, including AHIP and the American Medical Association, have launched the Common Health Coalition: Together for Public Health, according to a Nov. 9 press release. The coalition is “focused on translating the hard-won lessons and successes of the COVID-19 pandemic response into actionable strategies that will strengthen the partnership between our health care and public health systems.” The other founding members are the Alliance of Community Health Plans, American Hospital Association and Kaiser Permanente. Dave A. Chokshi, M.D., a physician at Bellevue Hospital and former New York City Commissioner, is chair of the Common Health Coalition.

In the 2025 version of the government’s annual mega-regulation governing the Affordable Care Act exchanges, multiple proposals appear to be aimed at ensuring state-based marketplaces are adhering to the same standards that apply to the federal marketplace, HealthCare.gov. One health policy expert says it’s probably not a coincidence that the proposed policy changes would take effect the same year that conservative-leaning Georgia is slated to launch its own state-based exchange.

“I see some proposals in here that are trying to safeguard against efforts to reduce the quality of exchange operations or run an exchange on the cheap,” says Sabrina Corlette, co-director of Georgetown University’s Center on Health Insurance Reforms.

Major payer coverage policies across select categories often met fair access criteria for cost sharing, clinical eligibility, step therapy and provider restrictions, according to the third annual “Barriers to Fair Access” assessment published by the Institute for Clinical and Economic Review (ICER).

The analysis examined coverage policies for 18 drugs across 10 commercial formularies, eight Affordable Care Act exchange plans and the Veterans Health Administration national formulary, representing 42 million enrollees in total. ICER asked the payers for coverage policy information and leveraged the MMIT Analytics Market Access Database for additional information. (MMIT is the parent company of AIS Health, which maintains journalistic independence and did not play a role in producing the report.)