Market access

One in five state Medicaid programs covered at least one anti-obesity medication in 2023, while the amount of reimbursement for these drugs has increased dramatically over the past decade, according to a recent JAMA study.

The researchers studied state Medicaid coverage policies for six anti-obesity drugs approved by the FDA through 2022 — orlistat, lorcaserin, phentermine-topiramate, bupropion-naltrexone, liraglutide, and semaglutide. For the two GLP-1s — liraglutide and semaglutide — the study examined both their branded versions for obesity treatment (Saxenda and Wegovy) and the versions to treat diabetes (Victoza and Ozempic). (It is likely, per news reports, that a substantial amount of diabetes-coded utilization of GLP-1s is actually off-label weight loss utilization.)

Prescription drug affordability boards (PDABs) have been rising in popularity as a way for states to tamp down on soaring drug prices. But a recent lawsuit filed by one drugmaker and public remarks from the industry’s main trade group make it clear that the pharma sector sees such boards — and the price caps some are authorized to set — as a major threat.

In a suit filed on March 22, Amgen Inc. takes aim at Colorado’s Prescription Drug Affordability Review Board, which is the closest to becoming the first state board to set an upper payment limit (UPL) on a drug. The state in late February initiated formal rulemaking to set a UPL for Enbrel (etanercept), Amgen’s rheumatoid arthritis treatment, after determining it was unaffordable.

Bristol Myers Squibb on March 18 completed its $14 billion acquisition of Karuna Therapeutics, Inc., whose lead drug, KarXT (xanomeline-trospium), is expected to gain FDA approval for treating schizophrenia later this year. That deal and results from clinical trials suggest KarXT could gain significant market share in a crowded schizophrenia medication marketplace.

However, two drug pricing experts tell AIS Health that it remains to be seen how payers will cover KarXT, especially if it’s priced significantly higher than its generic competitors, as it is expected to be. KarXT, an oral medication, has an FDA Prescription Drug User Fee Act data of Sept. 24, meaning the FDA will make an approval decision by then.

In newly released guidance, CMS told Medicare Part D plans that they’re allowed to cover weight-loss drugs if they’ve been approved for another medical use — a description fitting Novo Nordisk’s Wegovy (semaglutide) after it recently received an FDA nod for preventing major heart problems.

So far, CVS Health Corp., Elevance Health, Inc. and Kaiser Permanente have said their Part D plans will cover Wegovy for its newest approved use: reducing the risk of heart attacks and strokes in people who have cardiovascular disease and who meet body-weight criteria, the Wall Street Journal reported on March 28.

For other insurers that sell Part D plans, the decision about whether to cover Wegovy represents an additional challenge to grapple with, as they’re also facing significant regulatory changes.

The growing use of biosimilars has reduced spending in the Medicare Part B program, but there are opportunities to further reduce costs — through greater use of more affordable biosimilars and through the implementation of different payment policies, according to a study published by the HHS Office of Inspector General (OIG).

The OIG analyzed the average sales prices, utilization and costs of 21 biosimilar drugs and their reference biologic products in the Medicare Part B program between 2015 and 2021. The agency found that overall use rate of biosimilars in Part B jumped from 18% in 2015 to 62% in 2021. While the adoption of biosimilars has lowered both the prices of biologics and biosimilars, Part B spending could have been reduced by $179 million in 2021 if the five biosimilars that cost less than their reference products — epoetin alfa, infliximab, bevacizumab, rituximab and trastuzumab — had been used at the same rate as the most widely used biosimilar, filgrastim.

The FDA on March 8 granted Novo Nordisk A/S’s Wegovy (semaglutide) yet another indication — for cardiovascular risk reduction — that could further boost staggering GLP-1 sales. Wegovy is now approved to reduce risk of “major adverse cardiovascular events (MACE) including cardiovascular death, non-fatal heart attack (myocardial infarction) or non-fatal stroke” in adults who are either overweight or obese and have established cardiovascular disease, per a Novo press release. FDA official John Sharretts, M.D., described Wegovy as the first weight loss medication “to also be approved to help prevent life-threatening cardiovascular events in adults with cardiovascular disease and either obesity or overweight.” As the FDA noted in a press release, approximately 70% of U.S. adults are obese or overweight. The new indication was approved after a priority review.

PBMs often place biosimilar medications on preferred formulary tiers soon after the drugs hit the market, a change from a few years ago, when payers were more hesitant to cover biosimilars, according to a recent Cardinal Health report. However, one of the report’s authors tells AIS Health that PBMs in some cases have kept the reference biologic product on their preferred tier as well, leading to slower adoption of biosimilars.

For instance, Fran Gregory, Pharm.D., Cardinal Health’s vice president of emerging therapies, notes that CVS Health Corp.'s Caremark, The Cigna Group's Express Scripts and UnitedHealth Group's Optum Rx all added Humira (adalimumab) biosimilars to their national preferred formularies when they launched last year. Gregory says those PBMs were “very strategic” about which of the nine Humira biosimilars to place in a preferred tier, analyzing the wholesale acquisition costs (WACs) and concentrations of the products and tailoring them “based on the lines of business they’re serving.” But the payers all put the same tier as the biosimilars, which Gregory says “is where the challenge lies” with adoption.

The growing use of biosimilars has reduced spending in the Medicare Part B program, but there are opportunities to further reduce costs — through greater use of more affordable biosimilars and through the implementation of different payment policies, according to a study published by the HHS Office of Inspector General (OIG).

The OIG analyzed the average sales prices, utilization and costs of 21 biosimilar drugs and their reference biologic products in the Medicare Part B program between 2015 and 2021. The agency found that overall use rate of biosimilars in Part B jumped from 18% in 2015 to 62% in 2021. While the adoption of biosimilars has lowered both the prices of biologics and biosimilars, Part B spending could have been reduced by $179 million in 2021 if the five biosimilars that cost less than their reference products — epoetin alfa, infliximab, bevacizumab, rituximab and trastuzumab — had been used at the same rate as the most widely used biosimilar, filgrastim.

As demand for GLP-1s has grown, so has the desire of plan sponsors and other payers to avoid covering the costly drugs as "lifestyle" products — instead, they want to allow only patients who will derive clear medical benefits from GLP-1s to use them. To address that desire, vertically integrated payer-PBMs, among other vendors, have launched buy-up services for commercial plan sponsors that promise to curb demand for GLP-1s by making other weight loss care more available to patients.

Experts say it’s not clear whether those programs will make a difference for patients — or be worth the money for payers.

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.