PBMs/Pharmacy Benefit Managers

CarelonRx, the PBM arm of Elevance Health, Inc., has a new “comprehensive approach to specialty medication savings across pharmacy and medical benefits,” according to an April 22 press release. The new product will use “advanced analytics” to “identify members whose health is at the greatest risk,” which will prompt “a thorough review of a member’s clinical diagnoses, medications, whole-health integrated support, and a review of their site of care options.” At that point, identified members will receive “proactive pharmacist-led outreach to address any barriers to care, and to further coordinate integrated care with their whole health team, including medical and behavioral health professionals.” Elevance recently announced a pending deal to acquire Kroger Inc.’s specialty pharmacy division as it grows its Carelon health services division.

Sen. Bernie Sanders (I-Vt.) said on April 24 that he has launched an investigation into the “outrageously high prices” that Novo Nordisk is charging for its popular treatments for weight loss and Type 2 diabetes, Wegovy and Ozempic. In a letter to the Danish drugmaker’s CEO, Sanders — who chairs the Senate’s Health, Education, Labor and Pensions Committee — noted that the list prices for Wegovy and Ozempic ($1,349 and $969 per month, respectively) are far higher than what the drugs can be purchased for in countries like Canada and Germany. In his letter, Sanders requested information about how Novo Nordisk determined the prices for Ozempic and Wegovy, what it spent on research and development, and more.

If providers charged the same price as specialty pharmacies for specialty medications, $13.1 billion in spending on health insurance premiums and premium equivalents could have been avoided in 2024, according to a new analysis from the consulting firm Oliver Wyman, commissioned by AHIP.

Provider-administered drugs can be delivered directly to clinicians from specialty pharmacies — known as white bagging — or providers can purchase the drugs directly and store the drugs until they are needed for patient care, which is called “buy and bill.” When the “buy and bill” method is utilized, the providers can charge a markup for the drug that is passed through to the patient’s bill.

Although PBM-targeted legislation has stalled at the federal level, states are forging ahead in their efforts to rein in the highly scrutinized industry. In fact, the volume of state measures aimed at PBMs recently led the Government Accountability Office (GAO) to publish a review that zeroed in on five states that have taken a variety of approaches. Meanwhile, speakers at the Academy of Managed Care Pharmacy (AMCP) annual meeting told attendees about pending measures in states like California that industry stakeholders should be closely watching.

“We talk about states as the laboratories of democracy a lot,” Adam Colborn, director of government affairs at AMCP, said during an April 17 session at the conference, which was held in New Orleans. “There are a lot of experiments; I don’t know that they’re all successful experiments, but a lot of policies — particularly in the health care space — that are first enacted at the state level are then later implemented at the federal level.”

In March, the FDA approved Novo Nordisk’s Wegovy (semaglutide) for cardiovascular risk reduction, which could further boost the already-strong sales for the GLP-1 weight-loss medication.

Specifically, 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.

When the FDA approved Novo Nordisk’s Wegovy (semaglutide) for reducing the risk of serious heart problems, it paved the way for Medicare Part D plans to cover the drug. Industry experts also predict that the drug’s expanded indication will pressure more commercial insurers and their plan-sponsor clients to cover the pricey — and increasingly popular — medication.

“The pressure is just going to be too much” for commercial plans to avoid broadening their GLP-1 coverage, says Debra Devereaux, principal and chief pharmacy/clinical officer at Rebellis Group. However, she cautions that there may not be many significant coverage-policy changes this year.

Many commercial health plans already cover the drug for weight loss. Data from MMIT, AIS Health’s parent company, show that in 31 states, pharmacy formularies that cover more than half of commercial-plan enrollees categorize Wegovy as “preferred” or “preferred with utilization management restrictions.”

The Big Three PBMs — UnitedHealth Group’s Optum Rx, CVS Health Corp.’s Caremark, and The Cigna Group’s Express Scripts — have opted to cover Perrigo Co.’s over-the-counter birth control pill, Opill (norgestrel), at no cost to members in most non-grandfathered commercial plans, according to one expert. That suggests they are taking proactive steps to comply with potential rulemaking that could require most health plans to cover Opill and other types of over-the-counter birth control without cost sharing.

“There has been pretty broad, in the industry, adoption of Opill to the ACA preventive list,” Cody Midlam, Pharm.D., tells AIS Health, a division of MMIT. Midlam is a director at the benefits consulting firm WTW. “If a drug is on that list, that is generally available at $0 cost share at the point of sale for members.”

Startup PBM Rightway on March 30 closed a $100 million Series C financing round, the firm said. According to Rightway, that means the startup is now valued at $1.1 billion. A press release discussing the funding round claims that the firm now serves more than 500,000 members and 850 clients. Rightway, which touts its transparency to prospective clients, also claimed that it generates “an average of 20% reduction in year 1 pharmacy cost savings.”

Payers doubt that state prescription drug affordability boards (PDABs) will have an effect on prescription costs any time soon, according to a survey by Avalere Health. As part of its survey, Avalere conducted “six double-blinded interviews with health plan representatives.” Among the states that have established PDABs, Colorado, Maryland, Minnesota and Washington granted their boards the authority to set upper payment limits (UPLs.) According to Avalere, “all interviewees agreed that UPL-affected drugs or their competitors in the therapeutic class could see greater utilization management…depending on how manufacturers respond to supply chain changes, rebating, and UPL implementation.” In addition, five of six interviewees said they “expect formulary adjustments.” Colorado’s was the first PDAB to propose a UPL, but that has been challenged by the affected drug manufacturer. As a result, interviewed Colorado payers “are not yet actively preparing for a UPL,” expecting that the actual UPL won’t come into effect for “more than a year.”

Although a newly finalized health insurance regulation clocks in at 748 pages, it is missing something patient advocates have been eagerly hoping to see: language stating CMS will enforce a court ruling regarding the use of copay accumulator programs. Due to that omission, a patient advocacy group says it is once again exploring its legal options to curtail the practice in which payers prevent drug manufacturer coupons from applying toward patients’ out-of-pocket cost obligations.

Patients and advocacy groups for years have filed official comments on the annual Notice of Benefit and Payment Parameters (NBPP), urging federal officials to curtail the use of copay accumulator programs, according to Carl Schmid, executive director of the HIV+Hepatitis Policy Institute. “And every year, they’ve completely ignored those comments,” he tells AIS Health, a division of MMIT.

Medicare Part D formularies are becoming more restrictive over time, asserts new research published in the March issue of Health Affairs. Studying Medicare administrative data that included Part D claims and plan formulary characteristics, researchers from the University of Southern California and Blaylock Health Economics found that utilization management tactics such as prior authorization, step therapy and formulary exclusions became far more commonplace between 2011 and 2020. In 2011, an average of 31.9% of drugs were restricted in some form, vs. 44.4% in 2020.

Restrictions varied based on drug costs and the availability of generic alternatives to brand-name drugs. Nearly 70% of brand-name compounds with no generic alternatives were restricted in 2020, compared to 30% of drugs with generic availability. Additionally, the lower the cost of the drug, the less likely it was to be restricted. In 2020, only 16.7% of drugs with generic availability that cost less than $100 per prescription faced restrictions, vs. 83.7% of brand-name only drugs that cost more than $1,000.

Amazon.com Inc’s pharmacy division will be the exclusive home delivery partner for Eli Lilly & Co.’s direct-to-consumer business, Lilly Direct, which will distribute GLP-1s, among other drugs. In addition, the e-commerce giant now offers same-day delivery of many medications in New York and Los Angeles; it already offered same-day delivery in Austin, Indianapolis, Miami, Phoenix and Seattle. Analysts were positive about the LillyDirect deal: GlobalData’s Costanza Alciati wrote on March 14 that “Surely, by facilitating its medicines’ access in the world’s biggest obesity market, Eli Lilly made a great move to promote [GLP-1] utilization over competitor Novo Nordisk [A/S].” Bank of America analyst Allen Lutz wrote on March 13 that while “Amazon’s entrance into the pharmacy space has been underwhelming,” the LillyDirect deal “reflect[s] a shift in consumer preferences” that Amazon is wise to capitalize on. Lutz added that “patients taking GLP-1 drugs for the first time in 2024 could be introduced to Amazon’s mail pharmacy for the first time, which could potentially create greater awareness of the platform.”