Data & Analytics

Trends That Matter for Diabetes Drug Costs

March 12, 2020

With the cost of diabetes drugs still growing, PBMs and payers are looking for more innovative strategies to hold down costs, AIS Health reported. For some, that might include a strategy similar to the one recently unveiled by CVS Health Corp.’s Caremark unit. The plan, called RxZERO, offers a slimmer formulary for the diabetes drug class, but with no out-of-pocket costs for members.

With the cost of diabetes drugs still growing, PBMs and payers are looking for more innovative strategies to hold down costs, AIS Health reported. For some, that might include a strategy similar to the one recently unveiled by CVS Health Corp.’s Caremark unit. The plan, called RxZERO, offers a slimmer formulary for the diabetes drug class, but with no out-of-pocket costs for members.

Mike Schneider, a principal in the commercialization and market access practice at Avalere Health, says the plan is innovative. “You’ve seen Express Scripts do something where they’re offering specific insulins at very low out-of-pocket costs, but this is the first time I’ve seen a PBM come up with a way to eliminate out-of-pocket costs completely,” he tells AIS Health.

With the elimination of copays and other cost-sharing payments for diabetes drugs, CVS is betting members will better adhere to drug regimens and potentially avoid unnecessary hospitalizations and other services.

In January, Eli Lilly and Co. said it planned to sell new versions of Humalog Junior KwikPen and Humalog Mix 75-25 at half of their current U.S. list prices. Novo Nordisk A/S also started to offer generic versions of its frequently prescribed insulin drugs Novolog and Novolog Mix 70-30 at a 50% discount compared to the current list price. The graphics below show how these four medications are covered among commercial health plans, health exchange programs and Medicare and Medicaid programs.

Radar On Market Access: Florida Saw Strong MA, Individual Results and More Consolidations

March 10, 2020

Florida’s health insurers remain highly profitable as the overall market has grown significantly more concentrated, with companies such as Anthem, Inc. and Florida Blue snapping up numerous smaller HMOs over the past several years, particularly in the Medicare Advantage (MA) space, says the author of a new report on the Florida market.

Florida’s health insurers remain highly profitable as the overall market has grown significantly more concentrated, with companies such as Anthem, Inc. and Florida Blue snapping up numerous smaller HMOs over the past several years, particularly in the Medicare Advantage (MA) space, says the author of a new report on the Florida market.

Independent analyst and consultant Allan Baumgarten, who studies state health care markets, tells AIS Health that he expects consolidation to continue.

“There is a new crop of insurers that started business in 2019, including some new Medicare Advantage plans, plus Bright Health and Oscar [Health Insurance],” Baumgarten says. “I think that the Medicare Advantage plans, if they grow to a certain threshold size — maybe 25,000 enrollees or more — will be targets for acquisition. In fact, I think some of the entrepreneurs that started those new plans [did so] as a build and then sell strategy.”

Baumgarten’s report, which looked at enrollment, profitability and acquisitions in 2018, found that HMOs enjoyed strong profits in 2018 despite enrollment that slipped around 2.2%, mainly as a result of fewer people in Medicaid HMOs.

“For the health plans, two lines of business have been especially profitable — Medicare Advantage, consistently for the past eight years or more, and individual health plans [including exchange coverage] in the past two years,” Baumgarten says.

“The premiums paid to Medicare Advantage plans in Florida are among the highest in the country, which is why health plans are eager to start or acquire Medicare plans here,” the report explains.

Insurers weren’t the only health care players pursuing mergers and acquisitions in 2018, says. Overall, the report spotlights “growing consolidation on both the hospital system and health insurer sides, leading to strong profitability for both hospitals and health plans,” Baumgarten says.

Perspectives on ACA Exchange Draft Regulation

March 5, 2020

On Jan. 31, CMS released the 2021 Notice of Benefit and Payment Parameters (NBPP), which is the annual omnibus regulation that outlines the rules of the game for Affordable Care Act (ACA) exchange plans. But that was only after a trade group for safety-net health plans sent a strongly worded letter warning the Trump administration that the clock is ticking for issuers to finalize their 2021 premiums and benefit designs.

On Jan. 31, CMS released the 2021 Notice of Benefit and Payment Parameters (NBPP), which is the annual omnibus regulation that outlines the rules of the game for Affordable Care Act (ACA) exchange plans. But that was only after a trade group for safety-net health plans sent a strongly worded letter warning the Trump administration that the clock is ticking for issuers to finalize their 2021 premiums and benefit designs.

In its Jan. 27 letter, the Association for Community Affiliated Plans (ACAP) complained to CMS that the proposed 2021 NBPP “appears to be stalled at the Office of Management and Budget.” (The OMB completed its review of the regulation on Jan. 29.) Insurers need to submit qualified health plan (QHP) applications starting in early May, ACAP pointed out. “Building in a minimum 30-day comment period in addition to 30 days for the Department to review, revise, and release the final [rule] would allow just one month for issuers to operationalize and implement necessary updates,” the group wrote. “This timeframe will not allow issuers sufficient time to prepare products and operations for Benefit Year 2021.”

Fritz Busch, an actuary with Milliman Inc., tells AIS Health that the final NBPP has come out in April during the past two years, but before that arrived much earlier. The delay of the NBPP “presents operational challenges for a lot of plans, because so many plans are right in the middle of doing their pricing and other planning for the year,” he adds.

As for the content of the draft NBPP, the most attention-grabbing proposed changes to the rules surrounding subsidy eligibility. CMS said it’s seeking public comment on “new automatic re-enrollment processes for enrollees whose share of the premium after applying premium subsidies is $0, in order to reduce the risk of incorrect expenditures on subsidies that cannot be recovered through reconciliation.” In addition, “periodic data matching standards would be amended to help ensure premium subsidies are not inappropriately paid to enrollees who are determined to be deceased, or dually eligible for Medicare.”

Radar On Market Access: New Generic HIV Drug May Impact PrEP Coverage, Not HIV Coverage

March 5, 2020

A generic version of Truvada coming on the market later this year will affect how payers cover pre-exposure prophylaxis (PrEP), but it will not significantly change how payers cover HIV drugs, experts tell AIS Health.

A generic version of Truvada coming on the market later this year will affect how payers cover pre-exposure prophylaxis (PrEP), but it will not significantly change how payers cover HIV drugs, experts tell AIS Health.

Gilead Sciences, Inc.’s Truvada (emtricitabine/tenofovir disoproxil fumarate) was approved by the FDA in 2004 to treat HIV infection in combination with other antiretroviral drugs. In 2012, it also was approved as the first drug for PrEP. In March 2019, Gilead announced that it had entered into an agreement with Teva Pharmaceutical Industries Ltd. to allow the company to launch its generic version on Sept. 30, 2020.

Payer coverage of PrEP also will be affected by a recommendation from the U.S. Preventive Services Task Force (USPSTF). In 2019, the USPSTF recommended PrEP therapy for those at high risk of HIV acquisition, according to a white paper written by Lynn Nishida, R.Ph., vice president of clinical product and contracting for WithMe Health.

“With the USPSTF recommendation, Medicaid expansion programs and health plans are going to have to cover PrEP without any cost sharing,” says Tim Horn, director of medication access and pricing at the National Alliance of State & Territorial AIDS Directors. Therefore, payers will move toward generic versions.

Dan Mendelson, founder and former CEO of consulting firm Avalere Health, says that whenever a drug goes generic, payers usually have a plan in place to make sure the generic is used. “The more expensive the drug, the more likely that the plan will be comprehensive and aggressive,” he says.

Since HIV is one of the six protected classes in the Medicare Part D program, Part D plans typically cover all HIV products, says Michael Schneider, principal at Avalere Health, as there is little to no rebating in the category. “So, there is really no incentive for the PBMs acting on behalf of their clients, the plans, to do anything in terms of a utilization management standpoint or negotiation standpoint outside of just bringing the generics on formulary.”

Most of the branded HIV products are in the Part D specialty tier, requiring coinsurance, due to their high cost. When a generic comes on the market, plans typically will remove the branded product and then place the generic in the specialty tier or the preferred brand tier depending on the cost of the generic product, he says.

Trends That Matter for Nebraska Medicaid Expansion

February 27, 2020

With Medicaid demonstration programs that include work requirements struck down in three states, it’s become increasingly clear that such waivers may not survive legal scrutiny. So Nebraska, which submitted its own Section 1115 waiver application in December, is trying a different tactic, AIS Health reported.

With Medicaid demonstration programs that include work requirements struck down in three states, it’s become increasingly clear that such waivers may not survive legal scrutiny. So Nebraska, which submitted its own Section 1115 waiver application in December, is trying a different tactic, AIS Health reported.

In its application to CMS, the state proposes to modify voter-approved Medicaid expansion by creating two tiers of coverage: Basic, which includes “comprehensive medical, behavioral health and prescription drug coverage” as required by federal law, and Prime, which is the Basic package plus vision, dental and over-the-counter medication coverage.

“Unlike other states, everyone who meets underlying eligibility criteria will receive at least the robust Basic benefits package,” the application notes.

A recent Kaiser Family Foundation analysis shows that if all 14 non-expansion states expanded Medicaid, about 4.8 million additional people would be eligible for coverage, including 2.3 million adults in the coverage gap — whose income is above current Medicaid eligibility but below the lower limit for marketplace premium tax credits — and 2.1 million adults with incomes between 100% and 138% of the poverty threshold.

Perspectives on Part D Reform in 2020

February 20, 2020

If Congress or the Trump administration are able to enact any type of drug-pricing reform during 2020, it’s likely to be a redesign of Medicare Part D, industry experts tell AIS Health.

If Congress or the Trump administration are able to enact any type of drug-pricing reform during 2020, it’s likely to be a redesign of Medicare Part D, industry experts tell AIS Health.

In the Senate, tweaking the Part D benefit is part of a larger piece of bipartisan legislation (S. 2543), championed by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.). From the House, there’s the sweeping legislation (H.R. 3) proffered by Speaker Nancy Pelosi (D-Calif.).

Both bills would implement out-of-pocket spending caps for Part D beneficiaries and considerably change how costs are divided up in the catastrophic phase of coverage. They would also require drug manufacturers to repay Medicare if certain Part B or Part D drug prices rise faster than inflation.

“If you look at both the House and the Senate bills that have been put forward here, those [Part D] designs look very similar to one another, so I’m somewhat optimistic that…maybe there’s an opportunity for that to move forward,” says Stacie Dusetzina, an associate professor of health policy at the Vanderbilt University School of Medicine.

However, Elizabeth Carpenter at Avalere Health contends that “it is unlikely in this environment that any drug pricing legislation would move as a standalone bill.” The most likely pre-election vehicle for a Part D redesign would be the health care extenders package that expires in May, she adds.

Gerard Anderson, a professor at Johns Hopkins University Bloomberg School of Public Health, is more optimistic. “Drug pricing is the No. 1 issue for most voters when they’re talking about health care,” he points out. “So they’re going to feel a strong pressure” to pass something in Congress. Given that dynamic, he says he expects the Wyden/Grassley bill is likely to pass this year.

In whatever form a Part D redesign passes, Dusetzina says the biggest winner would be patients. While manufacturers and health plans would be on the hook for more spending in the catastrophic coverage phase, “on net, it probably isn’t very harmful for any one entity,” she contends.