Data & Analytics

Trends That Matter for CAR-T Therapies

October 22, 2020

This summer, a drug called Tecartus (brexucabtagene autoleucel) became the third chimeric antigen receptor T-cell (CAR-T) therapy approved by the FDA. CAR-T therapies, which use a patient’s genetically modified immune cells to target and fight cancer cells, are a cutting-edge type of treatment that comes with eye-popping price tags, ranging from $373,000 to $475,000. However, a new report from OptumRx highlights an “industry trend to watch” that could eventually provide some relief to payers worried about how to finance CAR-T treatments, AIS Health reported.

Currently, CAR-T therapies’ high cost is at least in part attributable to the “labor-intensive and time-consuming” manufacturing process for such drugs, stated the UnitedHealth Group-owned PBM’s Drug Pipeline Insights Report for the third quarter of 2020. Essentially, T-cells are taken from a patient, treated and multiplied in a lab, and reinfused into the same patient — a completely personalized process known as autologous therapy.

This summer, a drug called Tecartus (brexucabtagene autoleucel) became the third chimeric antigen receptor T-cell (CAR-T) therapy approved by the FDA. CAR-T therapies, which use a patient’s genetically modified immune cells to target and fight cancer cells, are a cutting-edge type of treatment that comes with eye-popping price tags, ranging from $373,000 to $475,000. However, a new report from OptumRx highlights an “industry trend to watch” that could eventually provide some relief to payers worried about how to finance CAR-T treatments, AIS Health reported.

Currently, CAR-T therapies’ high cost is at least in part attributable to the “labor-intensive and time-consuming” manufacturing process for such drugs, stated the UnitedHealth Group-owned PBM’s Drug Pipeline Insights Report for the third quarter of 2020. Essentially, T-cells are taken from a patient, treated and multiplied in a lab, and reinfused into the same patient — a completely personalized process known as autologous therapy.

As the industry searches for a cheaper and more scalable way of manufacturing CAR-T treatments, a new approach known as an allogeneic process “is currently under study as one possible solution,” according to OptumRx. In this process, previously extracted and banked healthy donor T-cells are multiplied “many times over for use in many patients,” effectively spreading out the high initial manufacturing cost over multiple doses.

When asked how much the allogeneic process could reduce the manufacturing cost of CAR-T therapies, Bill Dreitlein, senior director of pipeline and drug surveillance at OptumRx, cited a 2019 study.

“Per the International Society for Cell and Gene Therapy, the cost to manufacture CAR-T using current methods is at $95,780 per dose,” he says via email. “That study also calculates the production cost using the new process would be only $4,460 per dose — over 95% lower.”

Tecartus’ list price is $373,000, and the wholesale acquisition costs of the other CAR-T therapies, Kymriah (tisagenlecleucel) and Yescarta (axicabtagene ciloleucel), are $373,000 and $475,000 respectively, per the OptumRx report.

The graphic below show how Tecartus, Kymriah and Yescarta are covered among commercial health plans, health exchange programs, Medicare and Medicaid programs under the pharmacy benefit.

Radar On Market Access: Racial Disparities Are Highlighted by Pandemic

October 22, 2020

The COVID-19 pandemic has been especially harmful to people of color in the U.S., as they are more likely to suffer financial hardship, extreme cases of the disease or death than the white population. Experts say the devastation to communities of color is the product of systemic racism — particularly a lack of access to insurance coverage and quality care — and the pandemic’s economic consequences will make all of those problems worse, AIS Health reported.

According to a Sept. 15 report released by the Kaiser Family Foundation (KFF) and the Epic Health Research Network, people of color were more likely to test positive for COVID-19 and to require a higher level of care at the time of diagnosis compared to white patients, and they also were more likely to be hospitalized and die from the novel coronavirus than white patients were.

The COVID-19 pandemic has been especially harmful to people of color in the U.S., as they are more likely to suffer financial hardship, extreme cases of the disease or death than the white population. Experts say the devastation to communities of color is the product of systemic racism — particularly a lack of access to insurance coverage and quality care — and the pandemic’s economic consequences will make all of those problems worse, AIS Health reported.

According to a Sept. 15 report released by the Kaiser Family Foundation (KFF) and the Epic Health Research Network, people of color were more likely to test positive for COVID-19 and to require a higher level of care at the time of diagnosis compared to white patients, and they also were more likely to be hospitalized and die from the novel coronavirus than white patients were.

The economic impact of the pandemic has been similarly dire for households of color. According to a Sept. 16 survey prepared by NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health, majorities of Latino (72%), Black (60%) and Native American (55%) households all “report facing serious financial problems during the coronavirus outbreak.”

The survey also found that 25% of Latino households, 18% of Black households and 12% of Native American households “report serious problems affording medical care during the coronavirus outbreak.”

Policymakers say that COVID-19’s poor outcomes within communities of color are sadly predictable. During an Oct. 7 webinar organized by Axios, Rep. Markwayne Mullin (R-Okla.), a member of the Cherokee Nation, said that the problems in Indian Country are a direct product of underfunding the federal Indian Health Service (IHS), which is the primary insurer and provider for Native Americans. According to Mullin, the IHS receives about one-third of the funding per patient as Medicare, Medicaid and the Veterans Administration.

Leading public health figures have argued that racial disparities must be accounted for in plans to distribute COVID-19 vaccines. On Oct. 6, a panel convened by the National Academies of Sciences, Engineering and Medicine released a draft of a report titled Framework for Equitable Allocation of COVID-19 Vaccine. The framework emphasizes the importance of accounting for existing racial disparities in vaccine distribution, and noted the skepticism that communities of color have toward vaccines and the medical profession in general.

Radar On Market Access: Average MA Star Ratings Fall Due to Increased Weights, Cut Points

October 20, 2020

Although more than three-quarters of Medicare Advantage beneficiaries remain in highly rated plans, roughly 77% of MA Prescription Drug (MA-PD) members are currently in contracts that will have 4 or more stars in 2021, down from about 81% in 2020, estimated CMS.

Approximately 49% of MA-PD plans (194 contracts) that will be offered in 2021 earned overall star ratings of 4 or higher, compared with 52% of MA-PDs (210 contracts) offered in 2020, according to CMS.

Those declines are at least partly due to the increased weight of member experience measures based on Consumer Assessment of Healthcare Providers and Systems (CAHPS) and CMS administrative data, Melissa Newton Smith at HealthMine, Inc. tells AIS Health. For the 2021 star ratings, CMS increased the weighting value of the Part C Patients’ Experience and Complaints measures from 1.5 to 2.

Although more than three-quarters of Medicare Advantage beneficiaries remain in highly rated plans, roughly 77% of MA Prescription Drug (MA-PD) members are currently in contracts that will have 4 or more stars in 2021, down from about 81% in 2020, estimated CMS.

Approximately 49% of MA-PD plans (194 contracts) that will be offered in 2021 earned overall star ratings of 4 or higher, compared with 52% of MA-PDs (210 contracts) offered in 2020, according to CMS.

Those declines are at least partly due to the increased weight of member experience measures based on Consumer Assessment of Healthcare Providers and Systems (CAHPS) and CMS administrative data, Melissa Newton Smith at HealthMine, Inc. tells AIS Health. For the 2021 star ratings, CMS increased the weighting value of the Part C Patients’ Experience and Complaints measures from 1.5 to 2.

That combined with the “continued improved performance on the Part D measures” created a downward shift in overall performance, she suggests.

MA-PDs performed worse on nine out of 14 Part D measures, including on all three medication adherence measures and in Statin Use in Persons with Diabetes (SUPD), which contribute about 15% to the overall rating. And 15 out of the 16 cut points for those measures increased, observes Smith.

“When you look at the number of plans that improved, there were 65 contracts that improved and only 19 picked up the fourth star, which is a pretty low number,” observes Smith. “And if you compare that to the plans that dropped this year…you can [observe that] CMS is seeing more plans dip below the 4-star level and losing quality bonus payments, which obviously trickles down into the market and changes the competitiveness of those contracts, which really jumped out.”

Tom Kornfield, senior consultant with Avalere Health, estimates that the 31 contracts that lost their fourth star collectively cover about 2 million enrollees, which is “not insignificant.” And even though three-quarters of the MA population are still in contracts with 4 or more stars, “when we look at the fact sheets from the last several years, there’s been an increase — or if it went down it was maybe by a percentage point,” says Kornfield.

In an Oct. 8 analysis from SVB Leerink, securities analyst Stephan Tanal observed that Cigna Corp. demonstrated the greatest improvement from the prior year. Anthem, Inc., and UnitedHealthcare both showed downward movement.

Perspectives on Provider Consolidation

October 15, 2020

The climate for payer mergers and acquisitions (M&A) has cooled substantially at a national level ever since the collapse of the proposed deals between Anthem, Inc. and Cigna Corp. and between Aetna Inc. and Humana Inc. However, consolidation in the provider sector has increased since the start of the COVID-19 pandemic as such firms grapple with the rapid collapse of fee-for-service revenue, AIS Health reported.

The breakdown of Anthem’s bid to acquire Cigna resulted in a public spat and dueling lawsuits over Cigna’s attempt to exit their agreement before exhausting the firms’ option to appeal a federal ruling against the transaction. On Aug. 31, the Delaware Court of Chancery ruled that neither firm had to pay damages to the other over the failed deal.

The climate for payer mergers and acquisitions (M&A) has cooled substantially at a national level ever since the collapse of the proposed deals between Anthem, Inc. and Cigna Corp. and between Aetna Inc. and Humana Inc. However, consolidation in the provider sector has increased since the start of the COVID-19 pandemic as such firms grapple with the rapid collapse of fee-for-service revenue, AIS Health reported.

The breakdown of Anthem’s bid to acquire Cigna resulted in a public spat and dueling lawsuits over Cigna’s attempt to exit their agreement before exhausting the firms’ option to appeal a federal ruling against the transaction. On Aug. 31, the Delaware Court of Chancery ruled that neither firm had to pay damages to the other over the failed deal.

This failed deal was a catalyst for the slowing pace of health insurance consolidation at the national scale, according to antitrust lawyer and former Federal Trade Commission official David Balto.

Ashraf Shehata, KPMG national sector leader for health care and life sciences, says that Cigna’s acquisition of Express Scripts, a transaction that the firm pursued partly because of the failed Anthem merger, set a precedent of its own.

“I would say what that has spawned instead of the health plan integration, it’s spawned…the PBM integration. Rather than health plan to health plan, it was health plan plus PBM. And we saw that across the board with all the commercial entities,” he says.

Shehata says he sees three likely types of payer transactions and reorganizations going forward. The first is the PBM-payer integration. Second, Shehata says that horizontal coordination between regional payers, if not outright mergers, is likely to accelerate. Finally, he’s tracking the emerging model of “health plan plus retail plus PBM.”

Michael Abrams, co-founder and managing partner of consultancy Numerof & Associates, says that large regional hospital systems with healthy balance sheets are likely to speed up their vertical acquisition of independent hospitals or horizontal consolidation with local peers.

Abrams also points out that this wave of consolidation will compound or accelerate the rising cost of health care. He adds this continual rise in prices will eventually drain the generous margins that payers have enjoyed over the course of the pandemic.

Radar On Market Access: CVS, OptumRx Exclude Brand-Name Inhalers From 2021 Formularies, Switch Up Diabetes Supplies

October 13, 2020

CVS Health Corp.’s Caremark will exclude 57 medications from its 2021 formulary and add six back. Meanwhile, UnitedHealth Group’s OptumRx subsidiary will exclude 19 medications and products while adding back five and implementing restrictions on others, AIS Health reported.

Still, only a handful of products excluded by either PBM are likely to impact many members adversely, says Marc Guieb, a pharmacist and consultant with Milliman Inc. That also applies to the exclusions announced earlier by Cigna Corp.-owned PBM Express Scripts, he adds.

CVS Health Corp.’s Caremark will exclude 57 medications from its 2021 formulary and add six back. Meanwhile, UnitedHealth Group’s OptumRx subsidiary will exclude 19 medications and products while adding back five and implementing restrictions on others, AIS Health reported.

Still, only a handful of products excluded by either PBM are likely to impact many members adversely, says Marc Guieb, a pharmacist and consultant with Milliman Inc. That also applies to the exclusions announced earlier by Cigna Corp.-owned PBM Express Scripts, he adds.

Guieb observes that brand-name albuterol inhalers are seeing exclusions in 2021 from multiple PBMs, and that’s the change that will affect the most members. “That’s a big one this year,” he says. “One of the PBMs’ new strategies is, they’re completely excluding all the brands of albuterol inhalers, and they’re just going with the generic.”

Meanwhile, “the change that will actually cause the most widespread disruption and confusion will be diabetics switching to entirely new blood glucose monitoring systems, which is a hassle,” Guieb says.

PBMs that decide to prefer one specialty drug over another also can cause significant member disruption, Guieb adds, pointing to potential issues involving Novartis Pharmaceuticals Corp.’s biologic Cosentyx (secukinumab), which was excluded from Express Scripts’ 2021 formulary in favor of Eli Lilly and Co.’s Taltz (ixekizumab).

Overall, “I will say that for a lot of these annual formulary changes, they’re definitely a step in the right direction, although it may not be a big enough step in the right direction,” Guieb adds.

For 2021, OptumRx is changing up its multiple sclerosis coverage, adding Biogen’s Tecfidera (dimethyl fumarate) to its excluded list and preferring bioequivalent Bafiertam, made by Banner Life Sciences. Biogen’s Vumerity (diroximel fumarate) remains excluded.

Brian Anderson, a principal at Milliman, tells AIS Health that the products added back by PBMs can be “just as interesting” as those excluded.

Caremark is adding back seven products, six of which are preferred. OptumRx is adding back the Accu-Chek glucose meters, along with Teva Pharmaceuticals USA Inc.’s ProAir inhalers, Anderson says.

Add-backs can confuse plan members, Anderson points out. “It’s really hard for a plan or employer to explain to their membership why a drug that was excluded last year is now covered again,” he says.

Trends That Matter on Trump Administration’s Rebate Order

October 8, 2020

A promised executive order that would tie drug prices to their costs in other countries has yet to emerge, although President Donald Trump has promoted the order as part of his re-election campaign. Meanwhile, payers and PBMs are continuing to push back against three executive orders the Trump administration issued in July with the intention of lowering drug prices, one of which would overhaul the Medicare Part D prescription drug rebate system, AIS Health reported.

“I think the purpose of these executive orders is to give the president some talking points going into the debates,” says Avalere Health founder Dan Mendelson. He adds that, regardless of their purpose, the orders will not make a difference in the real world any time soon.

A promised executive order that would tie drug prices to their costs in other countries has yet to emerge, although President Donald Trump has promoted the order as part of his re-election campaign. Meanwhile, payers and PBMs are continuing to push back against three executive orders the Trump administration issued in July with the intention of lowering drug prices, one of which would overhaul the Medicare Part D prescription drug rebate system, AIS Health reported.

“I think the purpose of these executive orders is to give the president some talking points going into the debates,” says Avalere Health founder Dan Mendelson. He adds that, regardless of their purpose, the orders will not make a difference in the real world any time soon.

Meanwhile, the executive orders that actually have been released are being criticized from stakeholders across health care. The order that would remove safe harbor protections from the Anti-Kickback Statute for prescription drug rebates in Medicare Part D has been panned even by conservatives.

Alex Brill, a resident fellow at the American Enterprise Institute (AEI), penned a white paper sponsored by PBM trade group Pharmaceutical Care Management Association (PCMA) that concluded the executive order would “restrict an important tool for providing savings to the federal government and Medicare Part D beneficiaries. Moreover, net drug costs and drug company revenues would rise significantly if the Medicare Part D safe harbor for rebates is eliminated.”