Data & Analytics

Perspectives on CVS Bid to Lower Drug Launch Prices

November 1, 2018

In an effort to pressure drug manufacturers to temper their launch prices for new drugs, CVS Health Corp. is rolling out a program in which drugs that have a price exceeding a certain cost-effectiveness threshold will be excluded from coverage, AIS Health reported.

CVS will let clients refuse to cover drugs that have a price tag of more than $100,000 per quality-adjusted life year (QALY), provided they are not designated as “breakthrough”

In an effort to pressure drug manufacturers to temper their launch prices for new drugs, CVS Health Corp. is rolling out a program in which drugs that have a price exceeding a certain cost-effectiveness threshold will be excluded from coverage, AIS Health reported.

CVS will let clients refuse to cover drugs that have a price tag of more than $100,000 per quality-adjusted life year (QALY), provided they are not designated as “breakthrough” therapies by the FDA.

What’s unique about CVS’s move is where that cost-effectiveness threshold comes from: the QALY ratio is based on publicly available analyses from the Institute for Clinical and Economic Review (ICER), a nonprofit organization that conducts comparative-effectiveness research. Experts say it’s the first instance they’re aware of in which ICER is playing a formal role in a PBM or payer’s coverage decisions.

“In theory, I think it’s a great idea,” says Art Shinn, Pharm.D., president of Managed Pharmacy Consultants, LLC. “I think their quality of work is good,” he says of ICER. “From what I have seen of their studies, I think they’re nonpartial.”

However, in a letter sent Sept. 12 to CVS Health Corp. CEO Larry Merlo, nearly 100 patient groups urged him to reconsider the company’s new policy, saying that coverage decisions based on cost-effectiveness “ignore important differences among patients and instead rely on a single, one-size-fits-all assessment.” They also say that ICER’s cost-effectiveness analyses discriminate against the chronically ill, the elderly and people with disabilities by “using algorithms that calculate their lives as ‘worth less’ than people who are younger or non-disabled.”

CVS is not alone in taking steps to push back against high launch prices for prescription drugs. Express Scripts Holding Co., one of CVS Caremark’s chief rivals, “was actually the first to market last year with a more comprehensive and flexible program through our National Preferred Formulary called Exclude at Launch, which helps protect payers from high-priced drug launches,” a spokesperson wrote in an email to AIS Health.

Jayson Slotnik, a partner at Health Policy Strategies, LLC, says CVS’s move may be an attempt to compete with Express Scripts, as the two companies are “racing for market share” in order to demonstrate growth to investors.

Radar On Market Access: Drug Prices Increases Are Expected to Slow

October 18, 2018

Pharmaceuticals are expected to undergo a 4.92% price increase from 2018 to 2019, according to the recently released 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.

Pharmaceuticals are expected to undergo a 4.92% price increase from 2018 to 2019, according to the recently released 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.”

However, a handful of events have occurred that are helping slow drug price increases, including CMS giving biosimilars a unique reimbursement code and pass-through status, as well as the administration’s initiative to bring down drug prices.

Challenges within the system include the fragility of the pharmaceutical supply chain, which is leading to multiple drug shortages, and novel new medications that launch at very high prices.

Radar On Market Access: Drug Prices Increases Are Expected to Slow

October 18, 2018

Pharmaceuticals are expected to undergo a 4.92% price increase from 2018 to 2019, according to the recently released 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.

Pharmaceuticals are expected to undergo a 4.92% price increase from 2018 to 2019, according to the recently released 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.”

However, a handful of events have occurred that are helping slow drug price increases, including CMS giving biosimilars a unique reimbursement code and pass-through status, as well as the administration’s initiative to bring down drug prices.

Challenges within the system include the fragility of the pharmaceutical supply chain, which is leading to multiple drug shortages, and novel new medications that launch at very high prices.

Trends That Matter for Specialty Drug Management

October 11, 2018

Specialty drugs continue to be a concern for large employers, according to The Large Employers’ 2019 Health Care Strategy and Plan Design Survey by the National Business Group on Health (NBGH), AIS Health reported.

NBGH surveyed its corporate members in May and June on what they are doing for 2019. When NBGH asked employers about specialty pharmacy benefit management techniques, respondents selected more aggressive utilization management protocols as the top strategy,

Specialty drugs continue to be a concern for large employers, according to The Large Employers’ 2019 Health Care Strategy and Plan Design Survey by the National Business Group on Health (NBGH), AIS Health reported.

NBGH surveyed its corporate members in May and June on what they are doing for 2019. When NBGH asked employers about specialty pharmacy benefit management techniques, respondents selected more aggressive utilization management protocols as the top strategy, with 64% citing this, followed by having employees get specialty drugs through a specialty pharmacy or the specialty department of the health plan or PBM, cited by 58%. At 44%, site-of-care management notched the third top technique.

Radar On Market Access: Plans Might Tap Utilization Management for Marijuana-Derived Epilepsy Drug

October 4, 2018

When a pricey, unique medication for two rare forms of childhood-onset epilepsy comes onto the market — which could happen later this year — payers are likely to cover it but will probably subject the drug to prior authorization, experts tell AIS Health.

The drug in question is Epidiolex (cannabidiol), which in June became the first FDA-approved treatment that contains a purified drug substance derived from marijuana. The oral solution, produced by GW Pharmaceuticals plc,

When a pricey, unique medication for two rare forms of childhood-onset epilepsy comes onto the market — which could happen later this year — payers are likely to cover it but will probably subject the drug to prior authorization, experts tell AIS Health.
The drug in question is Epidiolex (cannabidiol), which in June became the first FDA-approved treatment that contains a purified drug substance derived from marijuana. The oral solution, produced by GW Pharmaceuticals plc, is indicated for the treatment of seizures associated with Lennox-Gastaut syndrome (LGS) or Dravet syndrome for patients ages two and older.
The average gross price for Epidiolex will be $32,500 per year, Julian Gangolli, North America president of GW Pharmaceuticals, said during the company’s Aug. 7 earnings call, according to a transcript from Seeking Alpha.
Currently, Epidiolex is classified as a Schedule I drug by the federal government. Schedule I drugs are defined as those with no currently accepted medical use and a high potential for abuse — a list that includes heroin, ecstasy and LSD, according to the U.S. Drug Enforcement Administration (DEA).
On Sept. 19, Benzinga reported — citing a research note from Morgan Stanley — that the DEA was preparing to reschedule Epidiolex as a Schedule IV drug, a classification that would put it on the same level as drugs like Xanax, Valium and Ambien.
As for how payers will handle Epidiolex, Mesfin Tegenu, president of PerformRx, LLC, says “plans are naturally cautious regarding any new medication to market.”
“Epidiolex has a very specific FDA approved indication for specific forms of seizures, Lennox-Gastaut syndrome (LGS) or Dravet syndrome,” he says. “Off label use may be a concern, so most plans are likely to place a prior authorization on the medication to ensure appropriate use.”
John Watkins, Pharm.D., pharmacy manager, formulary development for Premera Blue Cross, says the Washington-based insurer is taking a similar approach. “It will be covered with PA [prior authorization] to label,” he tells AIS Health.

Radar On Market Access: Payers Wait for Gilead’s HCV Generics to Hit Market Soon

October 2, 2018

Many payers likely are keeping a close eye on how the pharma industry reacts to Gilead Sciences, Inc.’s Sept. 24 announcement that it intends to soon launch steeply discounted generic versions of two of its chronic hepatitis C virus (HCV) drugs. The biopharma company says these generics will become available in January 2019 in the U.S. — a move that PBM Express Scripts Holding Co. describes as a win for payers and patients alike,AIS Health reported.

Many payers likely are keeping a close eye on how the pharma industry reacts to Gilead Sciences, Inc.’s Sept. 24 announcement that it intends to soon launch steeply discounted generic versions of two of its chronic hepatitis C virus (HCV) drugs. The biopharma company says these generics will become available in January 2019 in the U.S. — a move that PBM Express Scripts Holding Co. describes as a win for payers and patients alike,AIS Health reported.
According to Gilead, its newly created subsidiary, Asegua Therapeutics, will sell authorized generics of Harvoni and Epclusa “at a list price of $24,000 for the most common course of therapy.”
Francis Rienzo, interim CEO for Medicaid Health Plans of America, tells AIS Health that bringing HCV generics into the market may not change much initially because of “perverse” financial incentives for states to keep branded drugs on their Medicaid formularies — including higher rebates from drug manufacturers for brands as opposed to authorized generics. “So, does this mean there will be a lower net [cost]?” he asks. “I don’t know. There may not.”
He adds that real change may occur if more HCV generics hit the market. “The thing that I don’t know is, what are the other generics? When are they coming? That’s important” in driving down prices, including the net price of branded drugs, he says.
According to Gilead, its HCV generics “are priced to more closely reflect the discounts that health insurers and government payers receive today. Insurers will have the choice of offering either the authorized generics or the branded medications for both Epclusa and Harvoni.”
The company notes the generics could save up to $2,500 in out-of-pocket costs per treatment course for patients covered by Medicare Part D. Gilead says its HCV generics also will offer “substantial savings” to state managed Medicaid plans “that do not currently benefit from negotiated rebates” and “represent a significant number of people in need, potentially opening up access to our medications to beneficiaries who were previously denied coverage.”