Data & Analytics

Radar On Market Access: Civica Rx Aims to Provide 14 Drugs in Short Supply in ’19

March 19, 2019

Since its launch in 2018, Civica Rx, the new not-for-profit generic drug and pharmaceutical company run by health systems and hospitals, tells AIS Health it has made solid progress in its ongoing effort to address persistent shortages of certain drugs administered within hospitals’ four walls.

Since its launch in 2018, Civica Rx, the new not-for-profit generic drug and pharmaceutical company run by health systems and hospitals, tells AIS Health it has made solid progress in its ongoing effort to address persistent shortages of certain drugs administered within hospitals’ four walls.

According to Civica spokesperson Debbi Ford, Civica first aims to provide 14 vital drugs, “mostly sterile injectables such as anesthesia medications, antibiotics, and pain medications and expects to deliver these products this year,” she says.

Ford explained that for many generic injectable drugs undergoing a shortage, there often are one or two viable generic drug manufacturers that capture most of the market. However, she said, there are multiple other generic drug manufacturers that have an FDA-approved Abbreviated New Drug Application (ANDA) and have “capable manufacturing facilities and capacity to produce the drug undergoing shortages, yet are dormant due to business and/or other reasons.”

Ford said that any disruption in the supply chain for a drug that has only one or two manufacturers “almost immediately leads to a drug shortage, which is difficult to recover from because no other manufacturer can readily produce the required inventory.”

Civica is taking a three-pronged approach to its manufacturing strategy:

Work with several manufacturers, “including the dormant manufacturers who have the U.S. FDA approval, capable manufacturing facilities and capacity to produce Civica-labeled generic drugs, allowing manufacturers to re-enter the market,” Ford said.
The development and/or purchase of ANDAs for generic drugs and work with contract manufacturing organizations to produce Civica products.
The purchase and/or building of Civica manufacturing facilities using Civica’s ANDAs.
Will the cost of drugs go down because of Civica’s efforts? Probably not, says Bill Oldham, chairman and chief financial officer of AscellaHealth. Will drug costs go up? Maybe. In any event, “there will be a new game in town,” he says. “Whether it will have an enormous impact or not is anyone’s guess.”

Trends That Matter for Drug Spending

March 14, 2019

For its first annual drug trend report as a part of Cigna Corp., Express Scripts Holding Co. said it had achieved a record low drug trend of 0.4% across its clients’ employer-sponsored commercial plans in 2018. Overall, the PBM reported savings of $45 billion for its clients last year, AIS Health reported.

For its first annual drug trend report as a part of Cigna Corp., Express Scripts Holding Co. said it had achieved a record low drug trend of 0.4% across its clients’ employer-sponsored commercial plans in 2018. Overall, the PBM reported savings of $45 billion for its clients last year, AIS Health reported.

The PBM cited “an unprecedented 0.3% decline” in per-beneficiary drug spending across Medicare plans. Overall, there was a 1.4% decrease in unit cost trend, which allowed clients to absorb a 1.1% increase in utilization, the PBM said. Oncology replaced diabetes as Medicare’s top therapy class by per member per year spend.

Express Scripts also reported falling unit drug costs for employer, Medicare and Affordable Care Act exchange plans. On the specialty side, the PBM said that although list prices for brand-name specialty drugs rose by 7.1% in 2018, specialty drug costs increased by a lower 2.1% for its employer-sponsored plans, 2.4% for its Medicare plans and 2% for its exchange plans.

Perspectives on Biosimilars Market in 2019

March 7, 2019

Biosimilars are one way that payers had hoped to bring down spending on pharmaceuticals, but as of yet, these products have had little impact in the United States. As of mid-January, the FDA had approved 17 biosimilars, but only a handful actually are available in the U.S. However, the products may pick up more traction in 2019, with some significant ones potentially coming to market, AIS Health reported.

Biosimilars are one way that payers had hoped to bring down spending on pharmaceuticals, but as of yet, these products have had little impact in the United States. As of mid-January, the FDA had approved 17 biosimilars, but only a handful actually are available in the U.S. However, the products may pick up more traction in 2019, with some significant ones potentially coming to market, AIS Health reported.

According to Lynn Nishida, R.Ph., vice president of clinical product at WithMe Health, “More biosimilars are in the pipeline, but, sadly, expect continued issues of patent litigations that delay marketing of biosimilars soon after their approval or force biosimilar manufacturers to consider launching products at risk” before a lawsuit has been settled, potentially setting themselves up to be responsible for paying damages if they lose the case.

“Biosimilars will face continued slow uptake in utilization; however, there will likely be additional biosimilar approvals with future potential for utilization,” says Amy Nash, Pharm.D., president of RelianceRx, the specialty pharmacy affiliate of Independent Health. “Oncology-related biosimilars will likely have increased utilization.”

Mesfin Tegenu, president of PerformRx, tells AIS Health that he expects “a slow but steady increase in the availability of marketed biosimilars.” Among the biosimilars his company is watching in 2019 are the following:

• Cyltezo (adalimumab-adbm) from Boehringer Ingelheim Pharmaceuticals, Inc.

• Erelzi (etanercept-szzs) from Sandoz Inc.

• Herzuma (trastuzumab-pkrb) from Celltrion Inc.

• Mvasi (bevacizumab-awwb) from Amgen

• Two biosimilar Neupogens (filgrastim)

“I think some doom-and-gloom statements about biosimilars were a bit premature,” Jeremy Schafer, Pharm.D., senior vice president, director, payer access solutions at Precision for Value, says. “Biosimilars have definitely had a challenging market entry, but we need to remember we are still in the early days of a very new industry. In addition, signs indicate that biosimilars in important categories are gaining more traction, and I expect them to continue to do so.”

Radar On Market Access: What Is Behind CVS Health’s LTC Woes?

March 7, 2019

Almost four years after CVS Health Corp. spent nearly $13 billion to acquire Omnicare, the long-term-care (LTC) pharmacy business attracted negative attention as a major contributor to “headwinds” in the company’s report on fourth quarter and full-year 2018 financial results, AIS Health reported.

Almost four years after CVS Health Corp. spent nearly $13 billion to acquire Omnicare, the long-term-care (LTC) pharmacy business attracted negative attention as a major contributor to “headwinds” in the company’s report on fourth quarter and full-year 2018 financial results, AIS Health reported.

For the quarter ended Dec. 31, CVS Health reported a net loss of $421 million on revenues that increased 12.5% to $54.4 billion year over year. Losses reflect $2.2 billion in quarterly and $6.1 billion in full-year 2018 “goodwill impairment charges” related to its LTC business, the company said.

“The Omnicare deal made good strategic sense,” says Adam Fein, Ph.D., president of Pembroke Consulting, Inc. and CEO of Drug Channels Institute. “CVS gained a strong position in LTC [long-term care] while also augmenting its already significant specialty pharmacy business.”

“However,” Fein adds, “CVS Health has become a very complex and highly diverse organization. It has struggled against the smaller, nimble local competitors within the LTC industry.”

CVS Health blames “industrywide challenges” in LTC pharmacy as affecting its ability to grow the business at the rate originally estimated when it acquired Omnicare.

“These challenges include lower occupancy rates in skilled nursing facilities, significant deterioration in the financial health of numerous skilled nursing facility customers which resulted in a number of customer bankruptcies in 2018, and continued facility reimbursement pressures,” the company says.

As a result, a goodwill impairment charge of $3.9 billion was recorded during the second quarter of 2018, CVS Health said.

Radar On Market Access: Diplomat Pharmacy Postpones Earnings Release Amid PBM Struggles

March 5, 2019

Diplomat Pharmacy Inc.’s stock value plummeted recently after the company said it would delay the release of its fourth-quarter and full-year earnings results — primarily because of difficulties with its PBM business, AIS Health reported.

Diplomat Pharmacy Inc.’s stock value plummeted recently after the company said it would delay the release of its fourth-quarter and full-year earnings results — primarily because of difficulties with its PBM business, AIS Health reported.

Diplomat entered the PBM space in 2017 when it acquired National Pharmaceutical Services and LDI Integrated Pharmacy Services. The company disclosed in a Feb. 22 press release that it anticipates writing down a “significant portion” of its PBM business’ approximately $630 million in assets. It also said it is withdrawing its preliminary 2019 full-year earnings outlook, in part because it’s seen “additional customer losses in its PBM business since early January,” which combined with a “softer outlook for client wins and other factors” has led to a lower-than-expected outlook for its PBM business in 2019.

Asked why Diplomat’s PBM may be losing customers, William Sullivan, principal consultant at Specialty Pharmacy Solutions LLC, says part of the issue may be that pharmaceutical manufacturers are unsure “how things may shake out” regarding the newly proposed changes to the drug-rebate system. That could mean they want to stick with the “big players who will have the most impact on helping steer potential changes,” he says.

Another factor is the consolidation in the PBM industry — with Cigna Corp. now owning Express Scripts, UnitedHealth Group having its PBM OptumRx, and CVS Health Corp. owning both a PBM and health insurer Aetna Inc.

That “gives them even greater purchasing power which, reciprocally, makes it much harder for the smaller players to cut deals that enable them to be competitive with the big guys,” Sullivan says.

Trends That Matter for California Medicaid Program

February 28, 2019

Under the direction of its new governor, Democrat Gavin Newsom, California is planning to take control of the pharmacy benefit for all of the state’s Medi-Cal beneficiaries, AIS Health reported.

Under the direction of its new governor, Democrat Gavin Newsom, California is planning to take control of the pharmacy benefit for all of the state’s Medi-Cal beneficiaries, AIS Health reported.

Medi-Cal, California’s Medicaid program, is served by more than 20 managed care organizations. MCOs are currently able to contract with a pharmacy benefits manager, but the new plan would allow the state to directly negotiate drug prices, purchase drugs in bulk and develop transparency on drug cost reimbursement.

With nearly 90% of the state’s 12.1 million Medicaid beneficiaries enrolled in managed care, a shift to fee-for-service would entirely upend existing PBM relationships in Medi-Cal, the largest managed Medicaid program in the U.S.