Data & Analytics

Radar On Market Access: Vermont Pushes Ahead on Canadian Drug Importation

January 17, 2019

A new report concludes that if Vermont undertakes wholesale importation of prescription drugs from Canada, such a program could achieve cost savings for the state’s commercial payers. But achieving benefits requires an emphasis on program mechanics, and Vermont’s own effort is far from a done deal — with the state’s largest health insurer pointing out that administrative costs and hurdles, which may be significant, are not quantified in this feasibility study, AIS Health reported.

A new report concludes that if Vermont undertakes wholesale importation of prescription drugs from Canada, such a program could achieve cost savings for the state’s commercial payers. But achieving benefits requires an emphasis on program mechanics, and Vermont’s own effort is far from a done deal — with the state’s largest health insurer pointing out that administrative costs and hurdles, which may be significant, are not quantified in this feasibility study, AIS Health reported.

The state’s 14-page report on the preliminary design of the “Canadian Rx Drug Import Supply Program,” written with the National Academy for State Health Policy’s (NASHP) technical assistance, estimates savings of $1 million to $5 million annually, based on just 17 high-spend drugs identified for two of the state’s three major carriers.

Blue Cross and Blue Shield of Vermont was among the three major carriers in the state asked to voluntarily identify top-spend prescription drugs for the second quarter of 2018, excluding drugs such as narcotics, biologics, and IV and infused drugs that are not eligible for importation under federal law. MVP Health Care also provided data, but Cigna Corp. opted not to do so.

While NASHP Executive Director Trish Riley declined to identify by name the 17 high-spend drugs contained in the report, she says they are used for contraception, chronic obstructive pulmonary disease, diabetes, hepatitis C, HIV/AIDS, multiple sclerosis, arthritis and venous thromboembolism prevention, along with one cancer drug.

Payers also were asked to calculate net savings from importation, with NASHP adding a “conservatively-high estimated mark-up” for program administration of 45% on top of the Canadian price. To determine savings, plans were asked to determine their net spend (net of rebates) on the 17 drugs, comparing it to the would-be net spend for the same drugs if they were imported from Canada with a 45% mark-up.

Even with the 45% mark-up, plans reported savings ranging from $2.61 to $2.82 per member per month, or $1 million to $5 million annually, the report says. But it notes these savings for commercial payers, post mark-up, don’t take into consideration the state’s costs in operating the importation program.

Broadly speaking, the Vermont Blues plan supports efforts to reduce prescription drug costs for its members, says its spokesperson Sara Teachout. Yet she notes the complexity of the issue, pointing out that “some of the administrative hurdles [for Canadian drug importation in Vermont] are significant.”

Radar On Market Access: New Hep C Approach Might Not Save Money, PBM Execs Warn

January 10, 2019

A small study suggests it might be possible to shorten the length of expensive drug treatment for chronic hepatitis C virus (HCV), potentially cutting treatment time in half for 50% of patients. But managed care pharmacy clinicians say the results are far from ready to implement widely, and it’s possible the new approach might not even save money, AIS Health reported.

A small study suggests it might be possible to shorten the length of expensive drug treatment for chronic hepatitis C virus (HCV), potentially cutting treatment time in half for 50% of patients. But managed care pharmacy clinicians say the results are far from ready to implement widely, and it’s possible the new approach might not even save money, AIS Health reported.

The study, conducted at Loyola University Chicago and three medical centers in Israel, involved only 22 patients. It used a technique called modeling-based response-guided therapy, which estimated how long it would take to completely eliminate the hepatitis C virus.

“There’s a potential to save up to 20% of the costs of hepatitis C drugs,” says study author and Loyola researcher Harel Dahari, Ph.D.

However, April Kunze, Pharm.D., senior director of clinical formulary development and trend management strategy for Prime Therapeutics LLC, says that if PBMs or health plans apply policies that use the Loyola study’s data, the result may not necessarily be lower prices for hepatitis C therapy. “Drug pricing may vary significantly based on contracts and utilization,” she says. “Additionally, patients who relapse may require additional therapy, which could increase the overall cost of treatment.”

The proof-of-concept pilot study showed that using response-guided therapy to reduce treatment times is feasible, study authors said. To validate the results, a large multi-center trial is underway in Israel.

Dahari said that in addition to cutting overall costs, shorter treatment regimens would make it easier to treat hepatitis C patients who have limited drug benefits.

Still, Mesfin Tegenu, R.Ph., president of PerformRx, says that current FDA-approved protocol for treating hepatitis C is for either eight or 12 weeks, and “it will not be easy to change current protocol” for treating hepatitis C, since “all the clinical work done by drugmakers to receive approval was done for eight or 12 weeks.”

Regardless of the prospects for the response-guided therapy approach, there could be more price upheaval coming to the HCV antiviral market in 2019. Gilead said in September that it will soon launch steeply discounted generic versions of two of its HCV drugs.

Radar On Market Access: New PBM Models Respond to Public Pressure, Market Demand

December 20, 2018

Express Scripts Holding Co. and CVS Health Corp. have in recent months unveiled new programs that appear designed to transition away from the PBM status quo, AIS Health reported.

Express Scripts Holding Co. and CVS Health Corp. have in recent months unveiled new programs that appear designed to transition away from the PBM status quo, AIS Health reported.

One factor driving both new programs could be a proposed rule that’s still under review by the Office of Management and Budget, which might remove prescription drug rebates’ safe-harbor protections from the federal antikickback statute. But one industry expert says it looks less likely that may actually transpire.

“I think it has more to do with the fact, almost regardless of that [potential rule], that rebates going forward potentially are going to be so variable,” says David Dross, the leader of Mercer’s managed pharmacy practice. He says the PBMs’ moves are a response to “marketplace demand” for a different type of pharmacy benefits model.

Express Scripts’ new National Preferred Flex Formulary allows it to add to its formulary a newly launched lower-cost alternative to a brand medication — giving members immediate access to that drug — and lets the PBM exclude the innovator brand product from coverage.

The first drugs managed through the National Preferred Flex Formulary will be Asegua Therapeutics’ authorized alternatives for the hepatitis C treatments Epclusa (sofosbuvir/velpatasvir) and Harvoni (ledipasvir/sofosbuvir).

Under CVS’s new Guaranteed Net Cost model, the company will pass 100% of rebates to plan sponsors and “take accountability for the impact of drug price inflation and shifts in drug mix,” the company said in a press release.

Though the models differ in design and scope, Dross says similar forces are driving them. “I think there’s so much buzz in the marketplace around rebates, and what they are or aren’t,” he says. “People are becoming more conversant about it, so what that does is it sort of shines a light on all of the various entities in the supply chain, including pharma manufacturers.”

In response to that, manufacturers are experimenting with different approaches to pricing, which move away from the high-list-price, high-rebate paradigm, he explains. “And it kind of puts the pressure on the PBMs to say, ‘gee, well, how do we deal with that or address that?'” Dross adds.

Express Scripts’ new formulary is “directly dealing with that particular dynamic,” he says, while CVS’s model is more of a broad-based approach that signals to the market it’s open to trying something new and taking on risk.

Perspectives on FDA’s Approval of New Opioid Formulation

December 13, 2018

When a highly potent new opioid formulation was approved by his agency on Nov. 2, FDA Commissioner Scott Gottlieb, M.D., downplayed safety concerns about AcelRx’s Dsuvia. He stressed the importance of the painkiller for military use and the “very tight restrictions being placed on the distribution and use of this product,” AIS Health reported.

When a highly potent new opioid formulation was approved by his agency on Nov. 2, FDA Commissioner Scott Gottlieb, M.D., downplayed safety concerns about AcelRx’s Dsuvia. He stressed the importance of the painkiller for military use and the “very tight restrictions being placed on the distribution and use of this product,” AIS Health reported.

In general, PBM and health plan experts say such restrictions likely will hold and keep the drug within its proper niche, and the regulatory green light for Dsuvia shouldn’t interfere with broad ongoing efforts to better manage opioid use in the U.S.

Dsuvia is a sublingual formulation of an established drug, sufentanil, that is delivered through a disposable, pre-filled, single-dose applicator. It’s seen as ideally suited for certain special circumstances where patients may not be able to swallow oral medication, and where access to intravenous pain relief is not possible, including its potential use on the battlefield. Gottlieb notes that this opioid formulation, along with Dsuvia’s delivery device, was “a priority medical product” for the Pentagon because it fills a specific, though limited, unmet medical need.

Mesfin Tegenu, R.Ph., president of PerformRx, LLC., says, “A single-dose applicator could potentially prevent abuse due to the complexity of removing it [i.e., the medication] from the applicator. However, because it is 10 times more potent than fentanyl and 1,000 times more potent than morphine, the diversion of even one tablet can be risky.”

Tegenu adds that restricting the sites where Dsuvia can be administered “is a good step in preventing misuse. However, there is no guarantee that such a diversion will not occur and contribute to the opioid crisis.”

Yet Sharon Jhawar, Pharm.D., chief pharmacy officer for SCAN Health Plan, doesn’t anticipate a significant problem with diversion of the strong medication.

“Our perspective on Dsuvia is it’s been approved only in specific health care settings by someone who is medically trained, and is really for severe, acute pain in which other opioids would not be enough,” she says. “And because of the requirement of the setting and who needs to give it, this isn’t a medication you’re going to see insurers have on their formulary.”

Perspectives on Proposed Part D Change

November 29, 2018

If the Trump administration gets its way, Medicare Part D plan sponsors may at some point be on the hook for a greater share of costs once beneficiaries reach the catastrophic phase of coverage for prescription drugs. While America’s Health Insurance Plans (AHIP) is opposed to the idea, experts tellAIS Health that the time may be ripe for such a change.

If the Trump administration gets its way, Medicare Part D plan sponsors may at some point be on the hook for a greater share of costs once beneficiaries reach the catastrophic phase of coverage for prescription drugs. While America’s Health Insurance Plans (AHIP) is opposed to the idea, experts tellAIS Health that the time may be ripe for such a change.

Beneficiaries enter the catastrophic coverage phase when, as of 2018, their “true out-of-pocket costs” exceed $5,000. Once in that phase, beneficiaries pay no more than 5% of the total cost for their drugs, while the federal government pays 80% and the Part D plan pays 15%.

In its fiscal year 2019 budget proposal, the Trump administration suggests increasing plans’ share of costs for catastrophic coverage from 15% to 80% and shifting Medicare’s share from 80% to 20%. More recently, CMS Administrator Seema Verma said during an Oct. 18 event that the change is one area in which Part D could be “updated and modernized.”

Sean Creighton, a vice president in Avalere Health’s policy practice, says the change is probably needed because health plans will soon bear very little risk in the upper end of the Part D benefit.

AHIP, however, says it “strongly disagrees with the basic premise of this proposal — that incentives alone will produce such cost reductions.” It argues that “plans are already fully incentivized to negotiate vigorously for lower costs” and “drug companies are incentivized to provide price concessions only when leverage exists.”

Creighton says it is possible that shifting more risk to plans could result in higher premiums. But as long as the beneficiary cost-sharing in the catastrophic phase remains the same, the proposed policy change is likely to be “sort of invisible” to members, he adds.

On the other hand, increasing plans’ risk will likely cause them to step up some of their price-negotiation practices, such as excluding drugs from formularies, changing tier placement of drugs, and using prior authorization and step therapy. “So it may lead to a situation where access to particular drugs may become more restricted as the plans seek to contain costs,” Creighton says.

Trends That Matter for Drug Prices

November 22, 2018

Pharmaceuticals are expected to undergo a 4.92% price increase from 2018 to 2019, according to the July-August 2018 Drug Price Forecast from Vizient. That’s actually a slowing from the 7.61% increase for 2018, AIS Health reported.

Pharmaceuticals are expected to undergo a 4.92% price increase from 2018 to 2019, according to the July-August 2018 Drug Price Forecast from Vizient. That’s actually a slowing from the 7.61% increase for 2018, AIS Health reported.

The company conducted its analysis using price and volume data from hospital and non-acute facilities participating in its Vizient Pharmacy Program. Among Vizient members, therapeutic classes with the highest spend include many with specialty drugs.

Disease-modifying antirheumatic agents lead the way with an estimated 8.57% increase, followed by the immunomodulatory agents for multiple sclerosis, at 7.33%. According to the report, “Based on the total amount of spend across care environments, the types of molecular entities approved by the FDA, and the investigational products in the development pipeline, it is certain that specialty pharmaceuticals will continue to play an increasingly important role in pharmacy budgeting.”