Medicare Advantage Rx Drug

Medicare will likely focus on 38 Part D and two Part B drugs in the first three years of Medicare drug price negotiation — a provision of the Inflation Reduction Act — and these drugs combined accounted for $67.4 billion in gross Medicare spending in 2020, according to a study published in the Journal of Managed Care & Specialty Pharmacy. The authors identified 40 drugs expected to be negotiated by CMS for 2026-2028 based on “drug age, drug or biologic status, orphan drug status, Part B and Part D gross spending in 2020, and estimates of when a drug will be subject to generic or biosimilar competition.”

The 10 drugs likely to be selected for negotiation in 2026, which include several anticoagulants and cancer therapies, accounted for $33.7 billion of Medicare Part D gross spending as of 2020. The majority of insured people under Medicare formularies have plans that put these drugs under the preferred/preferred (prior authorization and/or step therapy) tier and covered/covered (PA/ST) tiers, according to data from MMIT Analytics. (MMIT is AIS Health’s parent company.) Biden administration officials said that the first 10 drugs selected for negotiation will officially be announced on Sept. 1, 2023.

Medicare will likely focus on 38 Part D and two Part B drugs in the first three years of Medicare drug price negotiation — a provision of the Inflation Reduction Act — and these drugs combined accounted for $67.4 billion in gross Medicare spending in 2020, according to a study published in the Journal of Managed Care & Specialty Pharmacy. The authors identified 40 drugs expected to be negotiated by CMS for 2026-2028 based on “drug age, drug or biologic status, orphan drug status, Part B and Part D gross spending in 2020, and estimates of when a drug will be subject to generic or biosimilar competition.”

The 10 drugs likely to be selected for negotiation in 2026, which include several anticoagulants and cancer therapies, accounted for $33.7 billion of Medicare Part D gross spending as of 2020. The majority of insured people under Medicare formularies have plans that put these drugs under the preferred/preferred (prior authorization and/or step therapy) tier and covered/covered (PA/ST) tiers, according to data from MMIT Analytics. (MMIT is AIS Health’s parent company.) Biden administration officials said that the first 10 drugs selected for negotiation will officially be announced on Sept. 1, 2023.

The U.S. will likely save billions of dollars in the first few years of Medicare drug price negotiation — a provision of the Inflation Reduction Act (IRA) — suggests a recent study published in JAMA Health Forum. Acting as though the IRA had been implemented from 2018 to 2020, researchers from Harvard Medical School and Brigham and Women’s Hospital created a simulation of the drug selection process, and found that Part D and Part B drug spending would have been reduced by 5% — $26.5 billion — over those three years.

Overall, 40 drugs were selected. CMS’s criteria are strict — spending on each drug must exceed $200 million in the year prior to its selection, and products must have been on the market for at least nine years (or 13, if the drug is a biologic). Selected therapies cannot have any generic or biosimilar alternatives, and orphan drugs and plasma-derived products are also ineligible. Then, the negotiated price must fall below a drug’s “ceiling price,” which is determined by the lesser of two figures: the average net price of a drug after its existing rebates and discounts, or between 40%-75% of the drug’s nonfederal average manufacturer (non-FAMP) price, depending on the drug’s age.

HHS set important deadlines for Medicare drug price negotiation on Jan. 11: Biden administration officials said that the first 10 drugs selected for negotiation will be announced on Sept. 1 of this year, and the maximum fair price for those drugs will be revealed on the same day in 2024. Those prices will go into effect at the start of 2026. HHS also released more information about the process it designed to select drugs and negotiate prices, which will include public comment periods and official consultations with stakeholders including manufacturers, insurers and providers.

HHS has a “plan to voluntarily solicit public comments on key elements of the program,” said CMS Administrator Chiquita Brooks-LaSure during a press conference call. “Input from our partners is essential to effectively and expeditiously implementing the Medicare drug pricing negotiation authority. We are committed to engaging with our partners through our timeline to maximize transparency, predictability and collaboration.”

Less than two years after the FDA approved the first treatment for Alzheimer’s that was aimed at targeting the underlying disease process, it has approved a second similar agent. Payers are likely to cover the drug, one industry expert says, but they almost certainly will try to place restrictions on their coverage.

On Jan. 6, the FDA gave accelerated approval to Eisai Co., Ltd. and Biogen Inc.’s Leqembi (lecanemab-irmb) for the treatment of Alzheimer’s disease in people with mild cognitive impairment or mild dementia stage of disease. People must have confirmed presence of amyloid beta pathology before starting treatment. The agency gave the humanized immunoglobulin gamma 1 monoclonal antibody fast track, priority review and breakthrough therapy designations.

As multiple biosimilars to AbbVie’s Humira (adalimumab) are set to hit the market in 2023, two of the largest pharmacy benefit managers (PBMs) in recent weeks made favorable coverage decisions for the soon-to-debut drugs. The FDA has approved seven Humira biosimilars so far, with Amgen’s Amjevita set to launch first, in January 2023. Bloomberg on Nov. 15 reported Optum Rx will cover up to three of the new biosimilars on the same tier as Humira on its 2023 formularies, while Cigna Corp.’s Express Scripts on Dec. 5 said it will cover the biosimilars as preferred products on its “largest formularies.” The PBM said it will “continue to evaluate all biosimilar products to Humira….and will provide updates related to specific changes as available.” Combined, the two PBMs and their corresponding payer units cover nearly 15 million people on their Medicare formularies, according to data from MMIT Analytics (MMIT is the parent company of AIS Health). Most people (86%) covered under Medicare formularies have access to Humira on the specialty tier, with utilization management restrictions such as step therapy and prior authorization.

When it comes to Star Ratings for Medicare plans, 2023 represented a return to the status quo after CMS stopped making adjustments related to the COVID-19 public health emergency that had largely inflated plans’ performance. Stand-alone Prescription Drug Plans (PDPs) were no exception to that trend, but they also continued a phenomenon seen in prior years where their overall scores trailed that of the more comprehensive Medicare Advantage-Prescription Drug (MA-PD) plans.

“In general, the PDP Star Ratings are somewhat lower than the average rating for MA contracts,” observes Shelly Brandel, a principal and consulting actuary at Milliman. That tends to happen every year, she adds, “so I think directionally the PDP Star Ratings have moved pretty similarly to MA Star Ratings [for 2023], but at a lower level.”

After Michelle McMurray-Heath, M.D., resigned from her position as president and CEO of the Biotechnology Innovation Organization, the major industry trade group said on Oct. 11 that Rachel King, co-founder and former CEO of GlycoMimetics, Inc., agreed to serve in those roles on an interim basis while BIO searches for a permanent successor. Before her departure, McMurray-Heath was on leave following disagreements with some board members over whether BIO should engage on social issues not directly connected to health care policy, which the molecular immunologist opposed, The Wall Street Journal reported. Her exit also comes in the wake of Congress’ passage of major drug pricing reforms as part of the Inflation Reduction Act, representing a rare defeat for the powerful pharma lobby.

Medicare Advantage members can experience markedly different outcomes in measures related to prescription drugs based on race and/or ethnicity that ultimately impact their overall quality of care, according to the CMS Office of Minority Health’s latest report on health disparities in MA. The report, “Disparities in Health Care in Medicare Advantage by Race, Ethnicity, and Sex,” was funded by CMS and conducted by RAND Health Care’s Quality Measurement and Improvement Program. The report authors studied both the 2021 Medicare Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey and the 2021 Healthcare Effectiveness Data and Information Set (HEDIS), highlighting disparities in several clinical areas. In addition to the prescription drug measures illustrated in the graphics below, the report also covered other clinical care measures such as cancer screening rates and patient experience measures including the ease of getting medical appointments and customer service experiences.

As Medicare Advantage plans and their providers operate under a new normal two-and-a-half years into the COVID-19 public health emergency (PHE), CMS is resuming its regular pace of auditing MA organizations as another program audit cycle gets underway, according to compliance experts. During a June 21 session of AHIP 2022, held in Las Vegas, panelists observed that CMS continues to be focused on ensuring seniors’ smooth access to prescription drugs and emphasized the importance of audit readiness.

CMS’s audit activity was limited during the previous cycle, especially in 2020, and its latest audit report reflected that. Released in June, the 2021 Part C and Part D Program Audit and Enforcement Report said CMS imposed 16 civil monetary penalties amounting to roughly $1 million and, between 2019 and 2021, it audited about 20% of currently active sponsors representing approximately 89% of Parts C and D enrollment — which is lower than CMS’s typical goal of 95%.