PBMs/Pharmacy Benefit Managers

In Blow to PBMs, CMS Floats Reform of Part D Price Concessions

As part of a sweeping new Medicare Advantage rule, CMS recently proposed a policy aimed at reforming a reimbursement system that local pharmacies have long claimed is straining them to the breaking point. PBMs, on the other hand, argue that the proposal could hamper value-based contracting in Part D and potentially increase Medicare spending.

At issue are arrangements in which Part D plan sponsors can recoup money from pharmacies for dispensed drugs if the pharmacies do not meet certain metrics. Generally speaking, these payments to plan sponsors are known as price concessions, and when assessed retrospectively — as they currently are — they are counted as direct and indirect remuneration (DIR).

Sweeping Rule Raises Onus on MAOs, Seeks Pharmacy DIR Reform

CMS on Jan. 6 released a 360-page proposed rule largely aimed at increasing Medicare Advantage plan accountability and strengthening beneficiary protections, particularly for patients who are dually eligible for Medicare and Medicaid. As the first major MA and Part D rulemaking under the Biden administration, the proposed rule would reinstate several policies that were unwound by the Trump administration, such as the return of detailed reporting medical loss ratio (MLR) requirements and provider network reviews for new and expanding MA plans.

The proposed rule, Medicare Program; Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs (87 Fed. Reg. 1842, Jan. 12, 2022), also revisits a Trump-era plan to reform pharmacy direct and indirect remuneration (DIR) — a topic that has long been a thorn in the side of community pharmacies. Specifically, CMS proposed to include all pharmacy price concessions — removing an exception for those that cannot be reasonably determined — at the point of sale in the definition of “negotiated price,” which is the primary basis for determining a beneficiary’s cost of obtaining a Part D covered drug.

News Briefs: Centene Agrees to Pay $21.1 Million to Settle NH Medicaid Pharmacy Issues | Jan. 20, 2022

Centene Corp. this month agreed to pay $21.1 million to resolve inaccuracies related to the reporting of pharmacy benefit services costs for New Hampshire’s Medicaid Managed Care Management Program. In a Jan. 6 press release unveiling the settlement agreement, Attorney General John Formella said the state Dept. of Health and Human Services and Dept. of Justice began investigating Centene’s provision of pharmacy benefit services after similar probes in other states were made public. The agreement follows similar settlements in Arkansas, Illinois, Kansas, Mississippi and Ohio over the last year for a total of $214 million in payouts. Centene did not admit any liability, wrongdoing or violation of federal or state law. “This no-fault agreement reflects our commitment to prompt and transparent resolution of this matter and relentless focus on delivering high-quality healthcare outcomes to our members in the Granite State,” Centene said in a statement published by The Daily Journal.

PBMs Will Face Pressure From Transparency Rules, Startups

This year, PBMs will continue to face growing pressure from plan sponsors, regulators and policymakers to prove that they deliver value and keep drug costs down — and could face additional legislative or regulatory challenges to the way they do business. Meanwhile, investors are likely to put even more capital into startups that challenge the traditional pharmacy benefit paradigm, and the post-pandemic boom in risk-based contracting could expand into pharmacy benefits.

Federal and state regulators have increased scrutiny on PBMs in recent years. In particular, state efforts to regulate PBMs were buoyed by the Supreme Court’s 2020 decision in Rutledge v. Pharmaceutical Care Management Association (PCMA), a lawsuit in which the justices held that states were not in violation of the Employee Retirement Income Security Act of 1974 (ERISA) in attempting to regulate the rates at which PBMs reimburse pharmacies. According to the National Academy for State Health Policy (NASHP), a think tank and policy advocacy group, so far this year 42 states considered 111 bills relating to PBM regulation in 2021. That activity is likely to continue in 2022.

New Drugs for Asthma, Kidney Disease, HIV Are On the Horizon

A new biologic for severe asthma, a drug for anemia related to chronic kidney disease (CKD) and a long acting pre-exposure prophylaxis (PrEP) for HIV-1 are among the first-in-class therapies featured in OptumRx’s Q1 2022 Drug Pipeline Insights Report. In addition to these new drugs, the PBM also calls attention to the likelihood of more COVID-19 vaccines and treatments receiving full approval and additional uses in 2022.

Tezepelumab (brand name Tezspire) was approved by the FDA for maintenance treatment of severe asthma in December 2021. Many biologics for severe asthma are already on the market, but these drugs target asthma subtypes determined by baseline blood eosinophil counts, according to the OptumRx report. On the other hand, tezepelumab, developed by AstraZeneca and AmGen Inc., has been developed with a broader indication.

Study: Opportunities to Improve Management of PNH Exist

Paroxysmal nocturnal hemoglobinuria (PNH) is an ultra-rare, potentially fatal disease. The FDA approved the first therapy, Alexion Pharmaceuticals, Inc.’s Soliris (eculizumab), a complement C5 inhibitor (C5I), to treat adults with the condition on March 16, 2007. Then the agency approved another C5I to treat adults with PNH from the same company, Ultomiris (ravulizumab-cwvz), on Dec. 21, 2018. A recent study of those two therapies from Prime Therapeutics LLC shows that there may be opportunities for payers in PNH management that will result in better health care outcomes for their members.

Prime presented findings from the study at the Academy of Managed Care Pharmacy (AMCP) Nexus meeting, which was held Oct. 18 through 21 in Denver. Funding for the study was provided by Apellis Pharmaceuticals, Inc., manufacturer of Empaveli (pegcetacoplan), a C3 inhibitor approved May 14, 2021, for the treatment of PNH in treatment-naïve people, as well as ones switching from any C5I. Researchers were from Prime, Apellis and the University of Minnesota College of Pharmacy.

Study: Opportunities to Improve Management of PNH Exist

Paroxysmal nocturnal hemoglobinuria (PNH) is an ultra-rare, potentially fatal disease. The FDA approved the first therapy, Alexion Pharmaceuticals, Inc.’s Soliris (eculizumab), a complement C5 inhibitor (C5I), to treat adults with the condition on March 16, 2007. Then the agency approved another C5I to treat adults with PNH from the same company, Ultomiris (ravulizumab-cwvz), on Dec. 21, 2019. A recent study of those two therapies from Prime Therapeutics LLC shows that there may be opportunities for payers in PNH management that will result in better health care outcomes for their members.

Report Trains Critical Eye on PBMs’ Changing Profit Streams

A new report about PBMs’ “evolving business models and revenue” is making a stir, with the main PBM trade group arguing that the organization behind it is biased and its conclusions are misguided. But industry observers tell AIS Health that the analysis offers illuminating information about how vertical integration and other factors have shaped the PBM sector — and they warn that PBMs must truly change if they are to survive increasing scrutiny.

Express Scripts Will Combine Coupons With Pharmacy Benefit

Express Scripts, the PBM subsidiary of Cigna Corp., will allow members to combine prescription drug coupons with their traditional pharmacy benefits. Pharmacy insiders tell AIS Health that the new offering is likely meant to head off competition from GoodRx Inc. and other upstarts.

A November blog post on the website of Evernorth, the Cigna subsidiary that owns Express Scripts, explains that around 2% of the time, discount pricing “is a little better” than the price offered when customers use their insurance.

News Briefs: Cigna settles $27.6 million PBM lawsuit with Kansas | Dec. 9, 2021

Centene Corp. will pay the state of Kansas $27.6 million, the fifth such settlement reached between the insurer and state Medicaid programs. More than a dozen states have sued the health insurer, accusing Centene of mismanaging their Medicaid programs’ pharmacy benefits. The insurer has paid out $214 million in settlements with Arkansas, Illinois, Mississippi and Ohio out of the $1.25 billion it set aside earlier this year to settle such suits. According to a press release from the office of Republican Kansas Attorney General Derek Schmidt, “In the settlement, Centene guarantees that it will improve transparency by providing the state with access to all data necessary to track pharmaceutical transactions, from the point of sale through reimbursement.” Centene is in the process of consolidating its $30 billion in pharmacy spend and hopes to bid out that business to one vendor in 2022.