PBMs/Pharmacy Benefit Managers

The Cigna Group is reportedly discussing a multibillion-dollar deal with Humana Inc. that would create a diversified health insurance giant capable of going toe-to-toe with UnitedHealth Group and CVS Health Corp.

Industry observers agree that such a transaction would receive robust regulatory scrutiny — with many predicting a high likelihood that federal officials will lob a legal challenge. However, opinions vary about how much the companies’ respective PBM businesses present a major antitrust risk.

News of the potential deal came from a Nov. 29 Wall Street Journal article, which cited people familiar with the matter speaking on condition of anonymity. Assuming the talks don’t fall apart, the terms of the deal could be finalized by the end of the year, the article stated.

Former President and current Republican presidential candidate Donald Trump posted on TruthSocial on Nov. 25 that he is “seriously looking at alternatives” to the Affordable Care Act. He added that the failure to overturn the ACA during his presidency “was a low point for the Republican Party, but we should never give up!” Following Trump’s comments, Citi analyst Jason Cassorla wrote in a note to clients that “we got the sense that the Trump headline didn’t have as much of a dampening impact in comparison to the headlines from back in 2017 when the repeal/replace rhetoric was in full swing and Republicans offered alternative such as block grants and other considerations.” Cassorla added that “as the 2024 election rhetoric heats up, we remain watchful of any momentum change on this front.”

CVS Health Corp.-owned Aetna has reversed course on a previously announced telehealth coverage change, Politico reported. The insurer had planned on ending virtual coverage for intensive outpatient and partial hospitalization program care on Dec. 1, but an Aetna spokesperson told Politico that Aetna would no longer go through with that decision. Groups such as the American Society of Addiction Medicine and the Consortium Representing Eating Disorders Care raised concerns about the proposed change.

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.

The CDC announced on Nov. 16 that it had made available more than 77,000 additional doses of Beyfortus (nirsevimab-alip), a monoclonal antibody intended to protect infants from severe respiratory syncytial virus (RSV) disease. Since the FDA approved Beyfortus in July, there have been supply issues and insurance coverage limitations for RSV medications. Sanofi, which manufactures Beyfortus alongside AstraZeneca, noted last month that it had seen “an unprecedented” level of demand for the medication and that it was working with the CDC to distribute more doses through the agency’s Vaccines for Children program.

CMS has delayed its plan to cover Medicare patients’ full cost of preexposure prophylaxis (PrEP) using FDA-approved antiretroviral drugs to prevent HIV infection in high-risk patients, according to KFF. CMS had announced the proposal in July and expected to make it official on Oct. 10, but KFF said the delay has occurred while CMS “is still working out details on how to transition coverage for patients already taking the drugs.” The drugs can cost more than $20,000 per year in the U.S.

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.

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.

Since the FDA approved the first biosimilar — Zarxio (filgrastim-sndz) from Sandoz, then a division of Novartis Pharmaceuticals Corp. — on March 6, 2015, the agency has approved more than 40 additional agents via the 351(k) pathway established under the Biologics Price Competition and Innovation Act (BPCIA), itself part of the Affordable Care Act (ACA). This past year has been especially busy in the space, with highlights including the launch of nine biosimilars of AbbVie Inc.’s Humira (adalimumab) and approvals of the first biosimilars of three different biologics: Biogen’s Tysabri (natalizumab), Actemra (tocilizumab) from Genentech USA, Inc., a member of the Roche Group and Stelara (ustekinumab) from the Janssen Pharmaceutical Companies of Johnson & Johnson. As the FDA approves more biosimilars, uptake of these agents will continue to increase, say industry experts.

“2023 was a banner year for the biosimilar market,” contends Andy Szczotka, Pharm.D., chief pharmacy officer at AscellaHealth. “The availability of biosimilars across multiple therapeutic areas provides opportunities for physicians, patients and payers to have additional clinical and cost-saving treatment choices.”

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.)

In its annual assessment of whether prescription drug formularies overly restrict access to select medications, the Institute for Clinical and Economic Review (ICER) gave insurers high marks. While it acknowledges that coverage policy information needs to be much more transparent, this year’s report concludes that “major payer coverage policies for 18 drugs often met fair access criteria for cost sharing, clinical eligibility, step therapy, and provider restrictions.”

However, ICER President-Elect Sarah Emond says the nonprofit research institute is fully aware that its analysis can only do so much to examine all the myriad, complicated facets of what truly defines “fair access.” Therefore, she adds, ICER is actively working on how to make future reports more comprehensive.

Since the FDA approved the first biosimilar — Zarxio (filgrastim-sndz) from Sandoz, then a division of Novartis Pharmaceuticals Corp. — on March 6, 2015, the agency has approved more than 40 additional agents via the 351(k) pathway established under the Biologics Price Competition and Innovation Act (BPCIA), itself part of the Affordable Care Act (ACA). This past year has been especially busy in the space, with highlights including the launch of nine biosimilars of AbbVie Inc.’s Humira (adalimumab) and approvals of the first biosimilars of three different biologics: Biogen’s Tysabri (natalizumab), Actemra (tocilizumab) from Genentech USA, Inc., a member of the Roche Group and Stelara (ustekinumab) from the Janssen Pharmaceutical Companies of Johnson & Johnson. As the FDA approves more biosimilars, uptake of these agents will continue to increase, say industry experts.