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ICER Will Take Different Approach to Assess Short-Term, High-Impact Products

December 2, 2019

As drugs continue to come onto the U.S. market with ever-increasing prices, payers are seeking to determine the value of those therapies as they make coverage decisions. To help do this, many health plans are putting more and more credence into the assessments from the Institute for Clinical and Economic Review (ICER). But the organization, and particularly its use of the quality-adjusted life year (QALY), has just as many detractors as it does supporters. And although ICER has staunchly defended its approach,

As drugs continue to come onto the U.S. market with ever-increasing prices, payers are seeking to determine the value of those therapies as they make coverage decisions. To help do this, many health plans are putting more and more credence into the assessments from the Institute for Clinical and Economic Review (ICER). But the organization, and particularly its use of the quality-adjusted life year (QALY), has just as many detractors as it does supporters. And although ICER has staunchly defended its approach, the organization recently released a report acknowledging that there may be exceptions to the way it approaches assessments.

The report, published Nov. 12, focuses on high-impact single and short-term therapies (SSTs), which it defines as “therapies that are delivered through a single intervention or a short-term course (less than one year) of treatment that offer a significant potential for substantial and sustained health benefits extending throughout patients’ lifetimes.” These include potential cures for conditions and products that can halt illnesses’ progression or “produce sustained major health gains.” The new approach will be applied for therapies to treat conditions “that are near-term life threatening or severely debilitating, or those that would cause a life-long significant disability if left untreated.”

The report notes that “important challenges” are inherent within these drugs’ assessments, “including distinctive types of uncertainty at the time of launch that raise the risk of high unrecoverable costs; questions regarding additional dimensions of value for patients or the health system; time divergence between costs and benefits; and concerns about affordability and fair sharing of any savings created by preventing the downstream costs of expensive chronic treatment. For all stakeholders, it is critical that the methods that guide assessment and recommendations for fair value-based pricing of SSTs are ready for these challenges and are well adapted to guide and support the innovation of new therapies that are affordable to individual patients and to the health system.”

ICER clarifies that “this focus on single or short-term treatments also implies that we do not believe that treatments taken on a chronic basis, even if they may be true cures that eradicate disease, warrant consideration of special assessment methods. We believe that current assessment methods are adequate for these kinds of treatment and that it is the combination of short-term treatment with the potential for substantial long-term gain that generates the key challenges meriting consideration of alternative assessment approaches.”

A handful of innovative one-time therapies have launched over the last couple of years. And while they have shown promise, the products also have turned heads with their high costs.

In May, the FDA approved gene therapy Zolgensma (onasemnogene abeparvovec-xioi) from AveXis, Inc., a Novartis AG unit, to treat spinal muscular atrophy (SMA), an often-fatal condition (SMA 7/1/19, p. 6). The cost for the treatment is $2.125 million. While it’s the only single-dosed drug priced in the millions, others certainly are not cheap. Spark Therapeutics Inc.’s Luxturna (voretigene neparvovec-rzyl), approved in December 2017 for a rare form of blindness, costs $425,000 per eye; Novartis Pharmaceuticals Corp.’s chimeric antigen receptor T-cell therapy Kymriah (tisagenlecleucel), first approved in August 2017, costs $475,000 or $373,000 depending on the type of cancer it’s used for; and Gilead Sciences, Inc. unit Kite Pharma, Inc.’s Yescarta (axicabtagene ciloleucel), also a CAR-T treatment, approved in October 2017 to treat large B-cell lymphoma, costs $373,000.

And these innovative therapies are not anomalies. In January of this year, then-FDA Commissioner Scott Gottlieb, M.D., said the agency expects to be receiving more than 200 investigational new drug (IND) applications for cell-based or directly administered gene therapy by 2020. The agency had more than 800 INDs on file at the time of Gottlieb’s statement. In addition, he said, the agency expects it will be approving 10 to 20 cell and gene products per year by 2025.

Research from the IQVIA Institute for Human Data Science shows that nearly 100 next-generation biotherapeutics that leverage 18 different approaches were in at least Phase II clinical trials in 2018. That total is almost a doubling of therapies since 2014.

Indeed, ICER President Steven Pearson, M.D., mentioned the pipeline for these therapies when unveiling the new report. “We need to think hard about whether the methods of technology assessment and cost-effectiveness analysis are ready to capture the potential for broader benefits of these treatments,” he said in a statement. “We also need to consider whether new methods can better describe for decision-makers the important uncertainties about long-term benefits of short-term treatments. Lastly, some potential cures will offer the promise of preventing massive health care costs over a patient’s lifetime; we need to ask whether the traditional methods of summing up all those cost-offsets and making it a part of a calculation of a ‘fair’ price makes sense for these specialized treatments.”

The group also issued a technical brief on the topic in August that functions as the background for the methods presented in the new report. Both reports are based on information that ICER culled from a variety of both national and international sources over the past year, including the UK’s National Institute for Health and Care Excellence (NICE) and the Canadian Agency for Drugs and Technologies in Health. The organization says it will start applying the model in January.

Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates, says that ICER’s above-quoted statement of intent in the report “is important. That is, by pursuing this for high value SSTs, ICER acknowledges that its existing value assessment framework does not fully capture such products’ value, that ICER does not have clear and evidence-based approaches that fully address this value, that ICER values the perspectives and experiences of entities in the USA and overseas to inform its thinking on possible solutions and that while the approaches spelled out in this report may not be fully defensible, they constitute first steps and placeholders from which to move forward.”

Pointing to the gene therapy pipeline, Jeremy Schafer, Pharm.D., senior vice president, Precision for Value, maintains that “these changes to the ICER framework are both timely and necessary.” He tells AIS Health that “the release of the revisions in general was somewhat surprising. ICER has done reviews on multiple one-time therapies including CAR-T products and Zolgensma. This could have given the impression that ICER was comfortable with its current approach. However, the release of the revisions shows that ICER is listening to the market and willing to adapt for new evolutions in health care.”

“If you think about ICER’s journey here — with their assessment of CAR-T — I believe that they were pretty excited and also were seeking differentiation in cure valuation, as at the time we heard from payers that ‘ICER always just says ‘no,’ so I believe that ICER was looking to demonstrate a positive review for highly innovative treatments, which together with Luxturna catalyzed a lot of this thinking,” says Lisa Kennedy, Ph.D., chief economist and managing principal at Innopiphany LLC. “Then with the assessment of Zolgensma in SMA, it seems that ICER was criticized for their high valuation of this treatment, which Novartis’s CEO used at JP Morgan last January. So the tone of the initiative changed to one of optimistic methodologies that balance the assessment of value, fair pricing and incentivizing breakthrough cures to ‘a solution to the most egregious prices that would otherwise be recommended by traditional cost-effectiveness methods,’” as stated in the technical brief.

“So essentially what ICER is saying is that the traditional cost-effectiveness analysis that they typically use for chronic disease treatments gives too high valuations for cures and needs to be further ratcheted down with other methodologies,” she tells AIS Health. “And the result is that chronic disease treatments are disproportionately rewarded over cures in these analyses. Yet if the goal is to buy more health per dollar spent agnostic to the intervention (a fundamental tenet for health economic evaluation as part of health technology assessment), then shouldn’t you measure cures on an even playing field with other therapies? Shouldn’t cures be measured with the same ‘yardstick’ as other therapies?”

Kennedy also questions why ICER would use the term “single and short-term therapies.” This wording, she says, “overcomplicates the term — when someone says cure, you get it. If someone says it’s an SST, an ordinary person will have no idea what you’re talking about.”

One of the approaches in the new framework is that ICER will include not only a base case scenario but two additional scenarios — an optimistic and a conservative one — on the benefits of a product. “Questions around the durability of gene therapy effect speak to one of the largest unknowns for payers and health care providers, particularly those trying to determine if the treatment is ‘worth it’ or not,” says Schafer. Including such scenarios “may help address this.”

Rubinstein agrees. Having the various scenarios will allow people on pharmacy and therapeutics (P&T) committees “to understand the range of value around the reported base case value, when key assumptions in the underlying scenario are changed.” He points out that the report says that “‘developing these alternative scenarios will still require judgments to be made. These scenarios will be evidence based and not arbitrary.’ In considering the importance and utility of these alternative scenarios, P&T decisionmakers will want to consider whether they agree with ICER’s choice of assumptions to change and the amount of change in these scenarios.”

According to Kennedy, “this doesn’t look particularly different from the scenario analysis that ICER currently does in their assessments. HTA [i.e., health technology assessment] of cures struggles with durability assumptions, and ICER are trying to address this uncertainty.”

Also in SST assessments, instead of using a traditional parametric curve for a survival analysis, assessments will use a variety of modeling approaches, including cure proportion modeling, to better account for available data. When a product’s price is known, ICER will offer information on how long the product’s benefits must last to achieve a cost-effectiveness threshold. And the assessments will include two hypothetical shared savings scenarios:

(1) A 50/50 shared savings model in which 50% of the lifetime health system cost offsets from a new treatment are ‘assigned’ to the health system instead of being assigned entirely to the new treatment; and

(2) A cost-offset cap model in which the health system cost offsets generated by a new treatment are capped at $150,000 per year but are otherwise assigned entirely to the new treatment.”

According to Schafer, “having multiple scenarios for price justification and cost-effectiveness may help stakeholders, including payers and pharmaceutical manufacturers, understand what cost may be reasonable, especially considering the potential for a lifetime of cost offset.”

Rubinstein tells AIS Health that these scenarios can be seen “as a placeholder to acknowledge the fact and importance of cost offsets, even while proposing an approach for significant uncertainty in their future benefit so as not to overestimate their dollar contribution in the value analysis — that is, to avoid” a situation such as one cited by ICER in the report: “This is a benefit for both patients and the health system, but this traditional approach, when used to calculate cost-effectiveness findings, can suggest value-based prices at extreme levels — for example, more than $80 million for a cure for one severe form of hemophilia.”

However, Kennedy asserts that “the shared saving scenario is a slightly troubling development.” She points to an analysis by Vital Transformation that shows that international reference pricing — which has support in various bills and the administration itself (SMA 11/18, p. 1) — “could take as much as $71 billion per year in revenue, which will irreversibly change the pharmaceutical development landscape.”

Because of this, she says, “we need to be very careful about how we consider and balance HTA with the need to ensure that there is continuous investment in new drugs.”

ICER also retained the 3% discount rate it applies to both costs and health outcomes. Kennedy says, “I would have liked ICER to have revisited the discounting — we know that because society has used heavy discounting in environmental economics, that it could potentially lead to some irreversible environmental changes. Lower discount rates for societal goods need to be applied to cures, and modeling that we’ve done shows that the benefit valuation essentially goes to zero after about 20 years. Again, this means that drugs for chronic conditions are disproportionately valued more favorably than cures.”

Asked if there was anything excluded from the report that should have been addressed, Schafer says that “one area that I think may need more exploration is assumptions on initial uptake of the product and what the initial cost to payers would be. Part of the reason that new drugs for hepatitis C led to such a crisis was that so many patients rushed in to be treated right away. This begat strict policies and a degree of rationing. ICER would serve the payer community well by outlining different scenarios of uptake of these one-time therapies to show budget implications. Having 20% of people with hemophilia get gene therapy in the first year is a very different short-term impact than if 100% got the gene therapy in the first year. For payers with annual budgets, long-term savings are not important if you cannot afford the initial treatment bill.”

An economic review section on uncertainty and controversies will be included in not only SST assessments but all ICER reports going forward. Also being added to all reports, including SSTs, will be three areas of “potential other benefits or disadvantages”:

(1) A potential advantage for therapies that offer a new treatment choice with a different balance or timing of risks and benefits that may be valued by patients with different risk preferences;

“(2) a potential advantage for therapies that, if successful, offer the potential to increase access to future treatment that may be approved over patients’ lifetime; and

“(3) a potential disadvantage for therapies that, if not successful, could reduce or even preclude the potential effectiveness of future treatments.”

Rubinstein says he is “pleasantly surprised” by the fact that ICER addressed these so-called “additional elements of value,” which “may be important for individual patients and in assessment of future value, while acknowledging controversy and difficulty in assessing those factors. ICER says, ‘We have considered these concerns and have decided to propose no quantitative integration of additional elements of value into the value assessment framework for the assessment of SSTs.’ Inclusion is ICER’s acknowledgment of these elements’ important contributions to value even if the ‘how’ is not yet clear.”

So what are takeaways of the report for manufacturers?

“The more influential that ICER becomes, the more that pharmaceutical manufacturers will work with ICER to develop its methods and evaluate the validity of its findings — and, to directly answer the question, the more that manufacturers will allocate resources to build the evidence that ICER requires to drive these analyses of product value,” says Rubinstein.

“While applying resources in this way will increase manufacturer cost,” he says, “if done well, doing this will yield robust and multifaceted aspects of value for its products including from the patient and health plan perspectives.”

Responds Kennedy, “ICER has firmly established itself in the dialogue on drug price and value, and manufacturers will need to continue to engage with ICER and work with other stakeholders to ensure that assessments reflect the fair value that curative therapy brings.”

“Manufacturers need to be ready to respond to questions on both the short- and long-term efficacy of these products,” says Schafer. “Conducting longer-term studies and gathering real-world evidence will be key. In addition, manufacturers should be prepared to offer outcomes-based agreements that accommodate different scenarios of patients response.”

Download the report, as well as other ICER materials on the topic, at https://bit.ly/33itEVO. Contact Kennedy at lisa.kennedy@innopiphany.com, Rubinstein at elan.b.rubinstein@gmail.com and Schafer through Tess Rollano at trollano@coynepr.com.

by Angela Maas

 

As Health Care Consolidation Accelerates, New Entities Make Decisions on Therapies

Pharmaceutical manufacturers and biotechnology companies, faced with an unprecedented wave of consolidation across practically every aspect of the health care industry, must learn new ways of making the business case for their products that addresses the concerns of newly integrated combinations of various stakeholders. Consolidation in the industry isn’t causing all of manufacturers’ problems, but it is exacerbating them. And as a result, manufacturers will need to focus more on their specific core areas, potentially eschewing noncore product lines, industry stakeholders say. They’ll also need to present their products in a way that panels of experts — not individual physicians — find compelling.

“Consolidation across health care is a reaction to the fact that the health care business model that’s been in place for the last 30 years is rapidly becoming obsolete,” says Michael Abrams, managing partner of consulting firm Numerof & Associates. “Health care continues facing a multitude of pressures — reimbursement’s not keeping up with increases in underlying costs, and there’s increasing linkage to measures of cost and quality.” In addition, there are growing demands for price transparency, Abrams tells AIS Health.

“All of that is weighing on hospital bottom lines, and their first reaction is to merge with the hospital across town, working on the assumption that size would be protective,” Abrams says. “But it’s not in the long run. Being bigger makes you slower with change.”

Still, larger consolidated entities can consolidate their purchasing, and “with the larger volume of purchasing, it is possible to wring price concessions from all your vendors, including pharmaceutical manufacturers,” Abrams says, noting, those companies “have been feeling that pain.”

Payers and PBMs “are looking in a very sophisticated way at formulary design and utilization management tools,” says Elizabeth Carpenter, head of advisory services at Avalere Health.

“Consolidation makes it more likely providers will be sophisticated when it comes to health information technology decision support and more and more when it comes to pharmaceutical spend,” Carpenter tells AIS Health. “When you’re a biopharmaceutical company and you’re talking to a consolidated company, [the company] is going to have more data assets and a better understanding of its population and a better understanding of what’s driving costs.”

Most pharma manufacturers do understand the landscape is changing and are thinking strategically about how to leverage opportunities, she says.

And Ashraf Shehata, principal and healthcare leader at KPMG LLP in Cincinnati, notes that “the trends [towards consolidation] are now less about an external force — value-based contracting or the Affordable Care Act or even Medicare for all. We’re seeing mergers and acquisitions around the fundamentals. Bigger is better: It gives you scale. In life sciences, it may be life sciences and traditional pharma manufacturers. On the hospital side, you’re now combining health systems, providers and outpatient facilities.”

Bigger is also advantageous when it comes to a company’s core competencies, Shehata tells AIS Health. “This is an important transition — now they’re doing it around the fundamentals of business. The fundamentals are generally strong, so they’re not doing this as a defensive play — they’re doing this to play offense.”

Pressure on pricing also is driving mergers and acquisitions within the pharmaceutical manufacturing space, and that trend will continue, Shehata says. “As the unit price on the life sciences side becomes a more bipartisan issue, I think you’re going to continue to see continued positioning around getting the best available price, whether that’s Medicare and Medicaid or commercial insurance,” Shehata says.

All this activity means pharmaceutical manufacturers and biotech companies are in a potentially difficult position: “Manufacturers are under pressure now, and that’s not going to get any better — and I’m not even talking about possible [drug price] legislation,” says Abrams.

M&A Activity Is Everywhere

Consolidation is taking on many guises in the health care industry.

✦ Provider consolidation can take the form of hospital-to-hospital mergers and acquisitions (horizontal consolidation) or hospital acquisitions of physician groups and other ambulatory service providers (vertical acquisition). Both types of consolidation have accelerated in recent years. A study on provider consolidation published in October by the Georgetown University Health Policy Institute Center on Health Insurance Reforms reported that in nine out of 10 metro areas, the provider market is considered “highly concentrated.”

✦ Insurers are merging with or acquiring PBMs or are building their own. UnitedHealth Group has its own in-house PBM, OptumRx. CVS Health, which owns CVS Caremark PBM, purchased insurer Aetna late last year in a $69 billion deal, while insurer Cigna finalized its $54 million purchase of Express Scripts Holding Co. in late December 2018. Finally, Anthem Inc. is launching its own in-house PBM, IngenioRx.

✦ Specialty pharmacies have undergone their own wave of consolidation, acquiring each other and being acquired by large PBMs (which may be affiliated with insurers). For example, CVS Health purchased five specialty pharmacies — Apothecary by Design, Central Drugs, EncompassRx, EntrustRx and SimplicityRx, LLC — in 2018. In May, CVS added Premier, Inc.’s 367 specialty pharmacies, located in 367 hospitals in 66 health systems, to its acquisitions as part of a deal worth $22.5 million. Meanwhile, OptumRx purchased Avella Specialty Pharmacy in mid-2018, adding 435 pharmacy locations. Shehata expects specialty pharmacies to continue to be good targets for acquisition.

✦ Insurers and physician groups are combining in various transactions. UnitedHealth’s Optum unit runs OptumCare, which in June completed its acquisition of DaVita Medical Group for $4.9 billion. Humana Inc. last year bought Family Physicians Group, a large Orlando, Fla.-based physician group that provides care through at-risk payment arrangements. In addition, provider-sponsored health plans are on the rise, with a 2018 report from the journal Health Affairs finding that more than 40 provider systems have formed new health insurance companies or acquired existing health plans. And many insurers, including Blues plans, are allying with primary care groups in an effort to control costs.

All this means pharmaceutical manufacturers and biotech companies — who themselves are facing significant consolidation — must improve their game to compete.

“At the highest level, consolidation within an industry produces more sophisticated customers,” Carpenter says, noting that the pharmaceutical manufacturing industry already is under pressure from a pricing perspective. “If you think about consolidation on the health plan side, it also means the customer has much more sophisticated data assets. One of the prime drivers of the recent consolidation on the health plan side is data.”

Consolidation also exacerbates some existing trends, Carpenter says, noting that insurers are more focused on the total cost of care and are investing in wellness and in ways to lower costs for consumers. “Those are all opportunities for biopharmaceutical manufacturers,” she says. Still, she adds, “As the number of formularies goes down, not being on one becomes a bigger deal.”

How Can Firms Articulate Value?

The pharmaceutical and biotech industry does understand the demand for them to better explain the value of their products, particularly new ones, Carpenter says.

However, different health plans and PBMs value different things, she says. That makes it critical for manufacturers to understand the different pressures payers and PBMs face in different markets and to tailor their negotiations accordingly, she says.

For example, a Medicare Advantage plan that’s focused on high-cost, chronically ill seniors may look at things differently than a plan with healthier enrollees: The plan with many chronically ill members might value a more expansive formulary with lower cost-sharing in an effort to keep members out of the hospital. And a plan that’s based around an accountable care organization would be focused on meeting the triple aim of cost, quality and patient satisfaction.

In addition, Abrams points out that mergers of insurers, providers and PBMs inevitably puts pressure on pricing. The lines are blurring between payer and provider, Carpenter adds: “Providers are starting to look more like payers.”

Manufacturers can leverage these changing market dynamics to their advantage if they understand them, Shehata says. “I think it’s all about bringing in the provider network and bringing in the appropriate payer segment,” he says. “They [manufacturers] run a portfolio. They’ve got to be able to rep that portfolio in its entirety.”

Certain drug launches need to be addressed in collaboration with provider networks, asserts Shehata. In addition, he says, “there’s some consumer-direct opportunities — the idea of rebating so that consumers can establish the value of the drug for themselves.”

Transparency within the rebate process “has been coming for a while now,” he says, adding, “not even price transparency — rebate transparency.” At the same time, the new provider-payer alliances are looking for pricing incentives that are aligned with the outcomes of a drug. Some of these deals “are groundbreaking,” Shehata says. “Those are working very closely with health plans to deliver the value proposition directly to the provider.” In “this new world around breakthrough drugs,” payers are looking to pay “the right amount” for a product, he says, adding, “you can only do that through scale.”

Uptake Is Far From Certain Now

Consolidation may “buy some time” for the various stakeholders in the industry to keep the status quo, but the health care system inevitably is shifting to one that’s value-based, Abrams says. Pharmaceutical and biotech companies must shift their strategies accordingly, he says.

“There was a time that when you launched a new product, uptake was a near certainty,” Abrams says. “FDA approval is now a checkbox, but it does not guarantee uptake. It used to be all about reach and frequency — your relationships with physicians and office staff were enough to win acceptance. That’s changing, increasingly being driven by consolidation across the health care industry.” When physician practices are gobbled up by hospital systems, it dramatically alters how manufacturers interact with providers, he says.

“With regards to how decisions get made [pertaining] to the purchase of new products, increasingly it is a task force, which has different points of view and different priorities in terms of what they think is best for the hospital,” Abrams says. “They scrutinize every new product that’s on offer: How is this different from the current standard of care? What’s the return on investment? If the product costs more, where do we see the payback downstream? That’s been a wrenching change for some manufacturers — they never needed to do that before. We’re seeing a redefinition of what matters.”

Value-based care is in part driving consolidation, and pharma manufacturers and biotech companies need to understand the move to value-based care by providers, with an eye towards how individual health systems are adopting arrangements governed by the total cost of care, Abrams says: “It’s not as though a manufacturer can use a one-size-fits-all approach.” Instead, he says, companies need varying approaches tailored to how far along a hospital system has gotten on the value-based continuum: “What is the exposure of their revenue to delivering on the cost of care and clinical quality?”

Markets in different states — and often in different cities in the same state — have quite divergent dynamics on this issue, Abrams says. Pharmaceutical manufacturers and biotech companies also are in different phases of acceptance — or denial — on how health care is changing, he says, adding, “I’d estimate 35% to 40% are at various stages of coming to grips with the fact that the old approach they’ve taken to business development is less and less effective.”

Economic and clinical benefits are key to these new, larger purchasers, Abrams says. That means pharmaceutical and biotech companies must tailor their pitches accordingly, he adds. “Manufacturers have to learn how to tell different economic and clinical stories, depending upon the audience for which it’s intended.”

This isn’t a natural fit, to say the least, he explains. “Organizations don’t change unless they have to. It’s a wrenching change for them to look at ‘feet on the street’ [pharmaceutical representatives marketing to individual providers] as something that’s no longer relevant.” And “it’s not just changing their behavior — it’s what they have to present: What are the benefits on the front end, and what are the implications on the front end and downstream?”

Presenting this type of information to a multiperson task force requires different types of capabilities, and some manufacturers aren’t necessarily well-versed in these capabilities, Abrams says: “It calls for a different mind-set with regards to the account. Now it’s about key account management and all of the skills that go along with that.”

How Can Firms Counter Consolidation?

Value-based contracts between payers and biopharma companies have gotten lots of press, and uptake is growing. But they won’t solve all of manufacturers’ problems, including those that are driven or exacerbated by consolidation.

A study from Avalere published in October found that 59% of payers have executed an outcomes-based contract with drug and device manufacturers tying product reimbursement to clinical, quality, utilization or financial outcomes. When Avalere first conducted the survey in 2017, only 24% of health plans had an outcomes-based contract in place.

Some 31% of health plans reported having more than five outcomes-based contracts, compared with 12% in 2017, while 21% had two to five outcomes-based contracts in place, up from 4% in 2017. Nearly 60% of health plans that have executed outcomes-based contracts cited cost savings and clinical improvement as the contracts’ top advantages. The capture of real-world information and improved payer-manufacturer relationships also were “notable areas of growth,” according to the survey.

Abrams notes that there’s pressure on pharmaceutical manufacturers and biotech companies to consolidate around therapeutic areas. “It forces businesses to really consider whether to hold onto smaller chunks of their portfolios,” he says. Both Johnson & Johnson and Pfizer Inc., among others, have closed these types of deals, he notes.

For example, the Janssen Pharmaceutical Companies subsidiary of Johnson & Johnson focuses on six core areas: cardiovascular and metabolism, immunology, infectious diseases and vaccines, neuroscience, oncology and pulmonary hypertension. To bolster its immunology focus, Janssen Biotech, Inc. agreed in May 2018 to pay $1 billion to acquire BeneVir Biopharm, Inc., a biopharmaceutical startup that’s developing oncolytic immunotherapies based on its proprietary T-Stealth oncolytic virus platform.

Pfizer, meanwhile, agreed to acquire Array BioPharma Inc. earlier this year for $10.64 billion in cash to augment its oncology portfolio. Array’s portfolio includes the approved combined use of Braftovi (encorafenib) and Mektovi (binimetinib) for the treatment of BRAF or BRAF-mutant unresectable or metastatic melanoma. The combination therapy also is being investigated in more than 30 clinical trials across several solid tumor indications, including the Phase 3 BEACON trial in BRAF-mutant metastatic colorectal cancer. Pfizer already owns 17 approved oncology medicines, with an additional 19 assets in clinical development.

Focusing on specific clinical areas can result in marketing savings, with a more targeted sales force, Abrams says. “Pretty much up and down the whole product line there are opportunities to cut costs,” he says. Still, he warns pharmaceutical manufacturers and biopharma companies “not to chase products that don’t offer economic and clinical value. You can’t count on uptake unless the value is there.”

Carpenter also suggests focusing on the consumer: “When you look at areas of alignment between the biopharma industry, health plans, PBMs and providers, you’re looking for new ways to engage the consumer to drive health and wellness.”

On the drug distribution side, consolidation occurred a few years earlier, Shehata points out, leaving the top three companies — AmerisourceBergen Corp., Cardinal Health, Inc., and McKesson Corp. — firmly in charge. “Consolidation yielded very large national contracts,” he says. Still, innovations around pill packaging and distribution likely are coming and could result in a “technology sea change” around distribution that pharma manufacturers potentially could utilize.

“The next wave [of consolidation among drug distributors] is going to be much more about how capabilities affect the touch to the consumer,” Shehata says. “We’re moving away from episodic distribution to a more seamless distribution channel” that potentially could distribute the right drugs to patients regardless of whether they’re in the hospital, at home or in a retail location.

“One of the biggest frustrations is ensuring drugs are available at the point of service when they need to be,” Shehata says. “The idea is that the drug should be available at any one of those channels. Being about to adapt to that distribution chain using nontraditional methods may help [drug product] uptake.” There’s room in this new paradigm for partnerships among the various players, he adds.

Ultimately, he says, “I think the health care industry needs to start looking at the individual, not what group they belong to.”

Contact Abrams via spokesperson Matthew Dick at matthew.dick@pinkston.co, Carpenter at ecarpenter@avalere.com and Shehata via spokesperson William Borden at wborden@kpmg.com.

by Jane Anderson

 

Study: NSCLC EGFR-i May Be Fit for Value-Based Contracts

A recently unveiled study shows that one first-line therapy for non-small cell lung cancer (NSCLC) with an epidermal growth factor receptor (EGFR) mutation is substantially more costly than four other competitor therapies. Payers may wish to consider implementing management strategies to help rein in costs, according to the study from Prime Therapeutics LLC.

Researchers presented the study at the Academy of Managed Care Pharmacy Nexus meeting held in National Harbor, Md., Oct. 29 through Nov. 1.

Lung cancer is the second most common cancer for both men and women, as well as the main cause of cancer death in the United States, according to the American Cancer Society. NSCLC is the most common form, affecting 84% of people with lung cancer. Among those, 10% to 50% have an EGFR mutation, according to the American Cancer Society and the National Comprehensive Cancer Network (NCCN).

When the FDA first approved AstraZeneca’s Tagrisso (osimertinib) in 2015, it was as a second-line NSCLC therapy in people with an EGFR mutation, and it launched with an annual wholesale acquisition cost (WAC) of $177,152 — approximately $70,000 more than the first-line EGFR-inhibitors (EGFR-is) that were available at that time.

The other EGFR-is were:

✦ Gilotrif (afatinib) from Boehringer Ingelheim Pharmaceuticals, Inc.;

✦ Iressa (gefitinib) from AstraZeneca;

✦ Tarceva (erlotinib) from OSI Pharmaceuticals, an affiliate of Astellas Pharma U.S., Inc., and Genentech, Inc., a member of the Roche Group; and

✦ Vizimpro (dacomitinib) from Pfizer Inc.

In September 2017, NCCN added Tagrisso to its guidelines for first-line use, and in April 2018, the FDA expanded the drug’s label to include this indication. But the company retained the second-line pricing for the therapy. This, says Jeremy Whalen, Pharm.D., Prime’s specialty clinical program director and lead author on the poster, “mak[es] it important for payers and stakeholders to understand its first-line utilization trend and impact on total cost of care, as well as value-based contracting and management opportunities.”

Prime analyzed integrated medical and pharmacy claims from January 2017 to June 2019 for 15 million commercially insured members to determine Tagrisso’s use among members new to therapy, the total cost of care (TCC) pre- and post-initiation among all the EGFR-is and the discontinuation rates among the EGFR-is. Among those 15 million members, researchers identified 1,020 members with a claim for an EGFR-i.

Among the study findings were:

✦ Tagrisso use among new starts for all EGFR-is rose from 6.9% in first-quarter 2017 to 71.1% in the second quarter of 2019.

✦ The TCC for the six months after treatment initiation for Tagrisso was $37,934 higher than the competitor EGFR-is — which equates to more than $4 million in additional costs for 129 Tagrisso-treated members.

✦ 18.6% of 129 Tagrisso new starts discontinued treatment within six months after initiating it, compared with 33.9% of 171 members who discontinued among the competitor EGFR-is. Various reasons can cause people to discontinue oral oncolytics; Whalen says some of the reasons researchers considered within this specific category were “cost of therapy, toxicities, disease progression or decisions to halt therapy altogether.”

Whalen tells AIS Health that some of that TCC among Tagrisso-treated members “could be attributed to the 15-percentage point higher persistence compared to members utilizing competitor EGFR-is. However, when only persistent osimertinib and competitor EGFR-i utilizers were compared, the TCC six-month difference was $45,054 higher among osimertinib utilizers.”

Value-Based Deals May Be Option

According to Whalen, “osimertinib’s $177,152 annual wholesale acquisition cost coupled with the finding that one in six discontinue therapy during the first six months warrants the need for value-based contacting to recoup the drug cost waste associated with therapy failure.”

Asked how Tagrisso compares with the other EGFR-is in terms of clinical effectiveness and side effects, Whalen says that Tagrisso’s FDA trial showed that it “demonstrated superior efficacy as compared to traditional first-line agents in its class. Tagrisso appears to be well-tolerated, like other EGFR-is. Some questions still persist around the benefit to sequencing therapies, especially around time to initiation of non-EGFR inhibitor therapy and cost of care.”

Sequencing Therapies Could Help

As to whether payers might consider preferencing among the EGFR-is, Whalen says it may be something to consider, but Tagrisso’s first-line indication “makes it challenging. That said, there are still clinical options to consider such as sequencing therapy, which could put Tagrisso back into second-line use. Management strategies will evolve as we better understand the genomic profile of individual tumors.”

Payers interested in value-based contracting for Tagrisso may have a variety of markers on which to base those arrangements, he says. Those include “discontinuation/persistence/adherence, time to disease progression, initiating of a subsequent therapy and impacts on total cost of care.”

Whalen emphasizes the fact that Prime has the ability to analyze integrated medical and pharmacy benefit claims.

“Prime leverages this integrated data to see real- world use and cost of emerging high-cost therapies to prepare our clients for their impact,” he says. “In this case, our ability to see across the pharmacy and medical benefits allows us to provide them with a comprehensive evaluation of total cost of care within specific oncology populations.”

Contact Whalen through Jenine Anderson at jenine.anderson@primetherapeutics.com.

by Angela Maas

This story was reprinted from AIS Health’s monthly publication RADAR on Specialty Pharmacy. Visit https://aishealth.com/product/specialty-pharmacy.

CVS Health, Cigna Make the Case for Greater PBM-Insurer Integration

November 25, 2019

Cigna Corp. and CVS Health Corp. — organizations that both recently combined a PBM and a health insurance business — are striving to prove to investors that they’re seeing valuable benefits from such vertical consolidation.

Executives from CVS, which purchased Aetna Inc. in late 2018, during the company’s third-quarter 2019 earnings call on Nov. 6 said that having such a diversified enterprise is helping it win over PBM clients for its Caremark division.

Cigna Corp. and CVS Health Corp. — organizations that both recently combined a PBM and a health insurance business — are striving to prove to investors that they’re seeing valuable benefits from such vertical consolidation.

Executives from CVS, which purchased Aetna Inc. in late 2018, during the company’s third-quarter 2019 earnings call on Nov. 6 said that having such a diversified enterprise is helping it win over PBM clients for its Caremark division.

For the 2020 PBM selling season — which runs from March to July — “our focus was to go to market with a more integrated medical-pharmacy offering,” said Karen Lynch, CVS Health executive vice president and Aetna president, according to a transcript of the call from Thomson Reuters. To that end, she noted that Caremark saw “increased traction in overall pharmacy penetration” for its employer-sponsored business during the 2020 selling season, particularly among Aetna’s existing medical-benefits clients.

While CVS has won $4.9 billion in gross new business during the 2020 PBM selling season — up from the $3.8 billion that it previously projected — “net new business is projected to be down -$6.4B overall (vs. -$7.4B previously),” due to the loss of Centene Corp.’s business and other non-renewals, Citi Research analyst Ralph Giacobbe wrote in a Nov. 6 note to investors.

Looking ahead to the 2021 selling season, “I think we’re seeing a fair amount of activity and pipeline build,” Lynch said.

Caremark President and CVS Health Executive Vice President Derica Rice said Caremark is introducing its HealthHUBs to both its health plan and employer clients, and it is seeing a lot of interest. In fact, two of the PBM’s health plan clients are now working with CVS on pilots related to its HealthHUBs. In response to a follow-up inquiry from AIS Health, CVS declined to reveal which health plans are involved in the pilots.

Meanwhile, “in the pharmacy space, we’re excited about what our pharmacists are doing in partnership with data coming to us from the Aetna business unit,” which helps the company identify patients who need the most help managing chronic conditions, Kevin Hourican, executive vice president of CVS Health and president of CVS Pharmacy, said during the call.

CVS’s PBM segment generated total revenues of $36.01 billion in the third quarter, a 6.4% year-over-year increase that also beat the Wall Street consensus estimate of $34.85 billion, Giacobbe noted. “Top-line growth was driven by brand drug price inflation as well as increased total pharmacy claims volume, but was partially offset by continued price compression and an increased generic dispensing rate,” he wrote.

Express Scripts Boosts Cigna Earnings

Cigna, which purchased Express Scripts Holding Co. in 2018, said a major driver of its better-than-expected quarterly financial results was the performance of its health services segment, which includes its PBM business. That book of business reported pretax operating earnings of $1.4 billion, which beat Wall Street’s consensus of $1.36 billion and far surpassed the $67 million it earned in the third quarter of 2018 — before Cigna’s purchase of Express Scripts closed.

In its earnings release, Cigna said the segment’s third-quarter 2019 results were thanks to “organic growth in adjusted pharmacy script volumes, strong performance in specialty pharmacy care and effective execution of supply chain initiatives.” On an adjusted basis, Cigna’s health services division fulfilled 312 million prescriptions in the third quarter, up from 294 million in the prior quarter, and the firm now expects its adjusted pharmacy prescription volume to grow by 25 million to 35 million in 2020.

On the specialty pharmacy front, Cigna is “quite pleased” with the positioning, ongoing innovation and strength of Express Scripts’ Accredo business, CEO David Cordani said during the company’s Oct. 31 earnings call, according to a transcript from Seeking Alpha. The impact of drug launches this year as well as the increasing use of existing therapies that Accredo manages have helped drive the growth of the specialty business, added Cigna Chief Financial Officer Eric Palmer.

Cordani also highlighted new programs launched by the combined Cigna/Express Scripts, such as the Embarc benefit protection program, which allows clients to pay a per-month fee to help finance two costly gene therapies if a member ever needs them.

ESI Deal Still Spells Uncertainty

Wall Street still holds some concerns, however. Giacobbe pointed out that Cigna’s Express Scripts deal still “brings integration risk as well as uncertainty around client retention as well as general headline risk given the focus on drug pricing and evolving PBM model.”

During Cigna’s earnings call, one analyst asked Cordani about how he thinks the PBM legislative and regulatory environment will play out — particularly since the Trump administration abandoned its proposal to remake the prescription drug rebate structure. But Cordani demurred, saying the conversation should be about how the market is seeking more value and affordability when it comes to prescription drugs.

“We expect to continue to see an evolving regulatory environment, but equally or more important, a more accelerated, evolving innovation environment and that is what we are driving towards,” he said.

For its part, Cigna is helping to increase affordability by offering innovations such as its Patient Assurance Program, which allows members in participating plans to pay no more than $25 for a 30-day supply of insulin, Cordani added.

by Leslie Small

 

 

Payers Say They Will Use New MS Drugs to Get Better Deals

by Angela Maas

When the FDA approved Biogen Inc. and Alkermes plc’s multiple sclerosis (MS) capsule, Vumerity (diroximel fumarate), in late October, it joined a crowded therapeutic class. According to a Zitter Insights survey, most payers will use newer oral and generic products to obtain larger discounts for intravenous (IV) and subcutaneous (SC) MS agents.

Vumerity is indicated for the treatment of relapsing forms of MS, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. The FDA approved the treatment through a new drug application under the 505(b)(2) pathway, with reference drug Tecfidera (dimethyl fumarate) from Biogen. It is the third MS drug approved this year following the March approvals of Novartis Pharmaceuticals Corp.’s Mayzent (siponimod) and Mavenclad (cladribine) from EMD Serono, a unit of Merck KGaA. Both are tablets.

The class also has multiple generic versions of Copaxone (glatiramer acetate) from Teva Pharmaceutical Industries Ltd. The pipeline also includes generics of Novartis’ Gilenya (fingolimod) and Biogen’s Tecfidera (dimethyl fumarate).

For the Managed Care Biologics and Injectables Index: Q1 2019, Zitter surveyed pharmacy and therapeutics (P&T) committee members who work for 50 commercial payers with 174.1 million covered lives between Feb. 22, 2019, and April 5, 2019. When asked how their plans expected to respond to the availability of new oral and generic MS therapies, 72% of respondents said they were more likely than unlikely or significantly likely to use the new products as leverage to get better discounts and rebates from manufacturers for IV and SC drugs (see chart below).

In addition, 17% said they were more likely than unlikely or significantly likely to put the oral products in a separate market basket to be managed differently than the other treatments. Of the payers citing this response, the preferred oral therapies included Aubagio (teriflunomide) from Sanofi Genzyme, a Genzyme Corp. unit; Gilenya; Mavenclad; and Tecfidera, with one payer mentioning Vumerity.

Asked whether they would create three market baskets, splitting up oral, IV and SC therapies, 41% of respondents said they were more unlikely than likely or not at all likely to do this.

 

Reality Check: Uveitis

 

Coverage


Pharmacy Benefit

Under the pharmacy benefit, almost 45% of the lives under commercial formularies are covered with utilization management restrictions. Around 24% and 33% of the lives under commercial and health exchange formularies, respectively, are not covered for at least one of the drugs.


Medical Benefit

Under the medical benefit, about 19% of the lives under commercial policies are covered with utilization management restrictions. More than 45% of the lives under Medicare policies have access to the medications without restrictions.

 

 

Trends From AIS Health


FDA Grants Orphan Drug Designation

In June 2019, the FDA granted orphan drug designation to Palatin Technologies, Inc.’s PL-8177 for the treatment of noninfectious intermediate, posterior, pan and chronic anterior uveitis. Palatin has conducted a single and multiple ascending-dose Phase I study with PL-8177 for ulcerative colitis under an investigational new drug (IND) application. The company says it plans to file an IND application for noninfectious uveitis with the FDA in 2019.

Via PR Newswire


Actemra Shows Efficacy

Intravenous Actemra (tocilizumab) showed efficacy in noninfectious uveitis, according to data from the STOP-Uveitis study presented at the 2019 American Academy of Ophthalmology meeting. The researchers randomly assigned patients with noninfectious uveitis to receive 4 mg/ kg or 8 mg/kg of IV tocilizumab every four weeks for six months. The study shows that 83.8% of the eyes they studied demonstrated a positive response.

Via Healio


Biologics Are Becoming First-Line Choice

Biologic medications are becoming the first-line choice for treating non-infectious uveitis, while they were originally considered second- or third-line choices, according to David K. Scales, M.D., who practices at Retina and Uveitis Consultants of Texas. There is also a need for immunomodulating drugs in the management of this class, he adds.

Via Healio

 

Key Findings


Market Events Drive Changes

In June 2019, the FDA granted orphan drug designation to Palatin Technologies, Inc.’s PL-8177 for the treatment of noninfectious intermediate, posterior, pan and chronic anterior uveitis. New biosimilars for Johnson & Johnson unit Janssen Biotech, Inc.’s Remicade (infliximab) were launched in 2016 and 2017, but will not have this indication because the biosimilars take on only the FDAlabeled indications of the reference product.

Competitive Landscape

The uveitis market is characterized by a small selection of marketed drug options: corticosteroid therapies, immunosuppressive therapies and biologics. Historically, corticosteroid therapies have made up the bulk of the market. Currently, only one targeted therapy is approved for this use: AbbVie Inc.’s Humira (adalimumab). The late-stage uveitis pipeline is composed of Santen Pharmaceutical Co., Ltd.’s Opsiria (sirolimus) and Clearside Biomedical, Inc.’s CLS-TA, which are expected to address some unmet needs. These new drugs will expand the options available to treat uveitis patients and contribute to overall treatment options by offering novel treatment mechanisms, including new drug delivery routes and novel, noncorticosteroid drug molecules.

Medical and Pharmacy Benefit Implications

Most drugs process through the medical benefit, but some payers push the products through specialty pharmacies. Some treatments are now available in self-injectable form and can be obtained via the pharmacy benefit. Triesence may process through the pharmacy benefit.

 

 

As Step Therapy Use Increases, Federal and State Bills Are Taking Aim at Payer Strategy

November 18, 2019

Step therapy has long been a go-to utilization management strategy for payers, as it is often applied to specialty pharmaceuticals. But as more and more costly drugs come onto the U.S. market, the practice has become nearly ubiquitous, prompting some pushback from various stakeholders, including providers, patients and manufacturers. Spurred by the blowback, many states — as well as the federal government — are taking a variety of steps to address the process with an eye on helping patients access drugs in a timely fashion.

Step therapy has long been a go-to utilization management strategy for payers, as it is often applied to specialty pharmaceuticals. But as more and more costly drugs come onto the U.S. market, the practice has become nearly ubiquitous, prompting some pushback from various stakeholders, including providers, patients and manufacturers. Spurred by the blowback, many states — as well as the federal government — are taking a variety of steps to address the process with an eye on helping patients access drugs in a timely fashion.

Twenty-five states have passed legislation around step therapy, and legislators in both houses of Congress introduced bills this year that target step therapy. Many of their aspects are similar, including bringing more transparency to payers’ appeals process, as well as providing specific instances when patients and providers can circumvent the step-therapy process, which can be a polarizing tactic.

Opinions are all across the board on the strategy’s usefulness. “Step therapy can be a very good method of ensuring that patients always get the treatment that is clinically best for them,” states Lisa Kennedy, Ph.D., chief economist and managing principal at Innopiphany LLC. “In theory it should ensure that they consistently receive the safest, most effective and best tolerated treatment — this could be a biosimilar or an originator product. If you look at many clinical guidelines, they essentially are based around a step-therapy approach, and payer step therapy could theoretically reinforce this.”

Use of step therapy among Prime Therapeutics LLC clients “varies by every plan/payer according to their needs, and there’s an ever-growing number of drugs,” says David Lassen, Pharm.D., chief clinical officer at the PBM, which is collectively owned by 18 Blues plans, subsidiaries or affiliates of those plans. “Step therapy is really only used when there are multiple drugs in a category that treat the same condition and work relatively the same. It’s this competition among equally safe and effective drugs that then allows for examination of savings opportunities for the plan and member.”

According to F. Randy Vogenberg, Ph.D., principal at the Institute for Integrated Healthcare, step therapy “has been used to augment prior approval (PA) processes as a method to control utilization and costs of pharmacotherapy by managed care/third party administrators (TPAs). PA remains the best way to not pay or contain rising costs from a managed care perspective.”

“Health insurers have the responsibility to institute programs that limit health care spending,” points out Kim Diehl-Boyd, vice president of industry relations and government affairs at CoverMyMeds. “Step therapy has long been used by insurers, and supported by regulation, as a means by the plan to ensure that the most cost-effective, clinically appropriate medication is being utilized by the patient at the onset of a diagnosis.”

Larry Kocot, the national leader of KPMG’s Center for Healthcare Regulatory Insight, tells AIS Health that “when used effectively, step therapy can help prevent the use of more costly, unnecessary medications, thereby helping to control overall prescription costs and ensuring that patients receive the most economical and effective treatment for them. Patient affordability is an important aspect of meaningful access, requiring health plans to achieve a careful balance between cost and access when instituting step-therapy policies.”

Indeed, when the current administration reversed a longstanding rule and began allowing Medicare Advantage (MA) plans to use step therapy for Medicare Part B medications as of Jan. 1, 2019 (SMA 9/18, p. 13), CMS cited its reasoning as “introduce[ing] much-needed competition and negotiation into the market for physician-administered and other Part B medications that will result in better deals and lower drug costs for patients.” MA plans that also offer prescription drug coverage may deploy step therapy to have a beneficiary use a drug under Part D before stepping to one under Part B. The policy change applies to new prescriptions only.

Underscoring that declaration is a study by consulting group Visante Inc. that was commissioned by the Pharmaceutical Care Management Association (PCMA) and released in January 2019. Its analysis found that prior authorization can produce savings of up to 50% for certain drugs and therapeutic classes, with step therapy resulting in savings of more than 10% for targeted categories. PCMA is a PBM advocacy group.

“These tools are becoming increasingly important in managing the rapidly growing use of high-cost specialty pharmaceuticals, so the lost savings associated with restrictions on PA and ST [i.e., step therapy] would become greater as specialty drug expenditures grow,” according to the report. “The loss of savings from PA and ST would increase projected drug expenditures by an estimated 4.6% over the next 10 years.” The report also notes that patients and physicians can appeal a prior-authorization or step-therapy requirement, which “safeguards against the use of PA and ST being too restrictive.”

Numerous challenges, however, exist with step therapy, maintain many industry experts. Kocot says there is “some evidence that although step therapy often results in reduced prescription drug spending, outpatient services spending can increase.” He also points out that “exceptions often rely upon clear clinical evidence such as patients’ prescription history.” But with different patient responses to therapies and “unique underlying health factors, granting exceptions can rely in part on physicians’ attestation of those facts. These attestations can sometimes involve subjective assessments of what is best for the patient without underlying data to support the decision.”

One criticism of step therapy is that it gets in the way of physician prescribing, as well as causes administrative burdens for practices. “Step therapy, like other prior-authorization requirements, complicates prescriber decision making and reduces prescriber and office efficiency,” says Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates. Kocot adds that while the clinical evidence used to establish step-therapy protocols “may be applicable to most patients, it is possible that certain individuals may not have typical responses or protocols.”

Rubinstein points out that generics are typically the first step patients must take, “but when a branded drug is required, one payer’s step-therapy policies may differ from another’s with respect to the branded drugs that must be tried first and failed. Because physicians treat patients covered by many different payers, it is challenging for physicians to efficiently manage different step-therapy requirements, beyond the first commonly agreed generic step.”

“The problem arises when step therapy is applied for cost reasons in the absence of clinical rationale and even worse when there is a financial rebate for drugs on a formulary, requiring patients to step through treatments not because of clinical reasons but because a payer or PBM receives a financial rebate for this (e.g., in commercial plans),” Kennedy says. “Also, a lot of legislation has put thought into only applying this to new patients and equally reducing the amount of time required for a patient to remain on a drug — as these two areas can be very problematic for patients.”

For example, many payers are specifying the duration of each step required for anti-inflammatory biologics (SMA 4/15/19, p. 1). “It’s a growing restriction that we see in immunology,” says an industry expert who asks not to be identified. “There is a hierarchy in immunology, especially in plaque psoriasis, with so many products that are available. There is a pecking order.…You’ve got to go through this and then that and then one of these other things. But that doesn’t get to the question about how long you need to be there.” The source tells AIS Health that a couple of years ago, the practice of “some brands…contracting specifically for step duration to be a certain amount of length” started becoming fairly widespread.

Critics point out that step therapy could delay much-needed care for patients. “In cases of rare diseases, conditions of high acuity and time-critical treatment,…step therapy can complicate or delay a patient’s rapid access to the right treatment,” says Kennedy. “If a patient is subject to stepping through treatments, and this delays getting the correct treatment on time, this can have a monumental impact on outcomes and is a perfect example of where misapplied, step therapy can result in sicker patients who suffer more and are placed at greater risk of death.”

Diehl-Boyd notes that “programs like CoverMyMeds that make this process electronic address this challenge, in many instances resulting in same-day determinations, but there is still room for improvement.”

Another challenge, says Vogenberg, relates “to biologics and specialty drugs and the use of copay and coupon programs by manufacturers.” He points to a study he did that “showed limited value from an employer/plan sponsor perspective when taking all plan management factors into account. As the determination of advantages/disadvantages as value swings more to the plan sponsor versus TPA, the value is minimized compared with traditional studies and PBM reports that only take into account their scope of coverage, even before taking outcomes into account. For manufacturer programs to offset step [therapy] and PA by managed care if [drugmakers] are disadvantaged, it’s more of a game that doesn’t really benefit anyone — especially the patient who everyone says they are looking out for. Over time, the base price of drugs coupled with increases in price…reduce the value of those therapies along with affordability by the patient. In addition, this game around management and drug pricing has not helped manufacturers while enriching TPAs/PBMs for no added value to the patient or plan sponsor.”

Bills Have Bipartisan Support

As step therapy becomes more common, legislators on both sides of the aisle are trying to bring some transparency to the process. On April 10, Reps. Raul Ruiz (D-Calif.) and Brad Wenstrup (R-Ohio) introduced H.R. 2279, known as the Safe Step Act. The bill, which had 109 additional co-sponsors as of Oct. 31, has been referred to the Committee on Education and Labor. And on Sept. 25, eight senators, including Sen. Lisa Murkowski (R-Alaska), introduced S. 2546, a companion bill also known as the Safe Step Act. The legislation had two additional co-sponsors as of Oct. 22. It has been referred to the Committee on Health, Education, Labor and Pensions.

Both bills seek to amend the Employee Retirement Income Security Act (ERISA) of 1974 “to require a group health plan (or health insurance coverage offered in connection with such a plan) to provide an exceptions process for any medication step therapy protocol, and for other purposes.” They call for plans to “implement a clear process” for requesting an exception and a maximum of 72 hours for insurers to respond to exception requests. For situations where step therapy “may seriously jeopardize the life, health, or ability to regain maximum function of the participant or beneficiary,” those requests must be granted within 24 hours. They list multiple circumstances that would authorize coverage for a drug without adhering to a step-therapy process.

Those exceptions include:

✦ When the drug or another from the same class has been ineffective,

✦ When a treatment delay “would lead to severe or irreversible consequences” and the treatment is “reasonably expected to be ineffective,”

✦ When required treatments are contraindicated or likely to cause an adverse reaction,

✦ When required therapies are likely to prevent people from performing their job or daily activities, and

✦ When people are stable on current drugs and have received previous approval for them “by any group health plan or health insurance issuer.”

The bills also allow for additional circumstances for exceptions.

According to the National Psoriasis Foundation, 18 states have laws in effect targeting step therapy, and another seven have passed legislation that has not yet taken effect. The laws differ from state to state, but many of them include some of the same components of the federal legislation. For example, many states require insurers to respond to exception requests within 72 hours or 24 hours in the case of an urgent situation. If they fail to do so, the exception is automatically granted. Texas requires plans to notify members of any modifications to step-therapy requirements at least 60 days before they are effective. Some legislation applies specifically to Medicaid. And almost all the states include at least one of the exceptions listed in the federal bills. In addition, many laws targeting electronic prior authorization (ePA) also are in effect, which could accelerate patients’ access to drugs with step-therapy requirements.

Many health plans have language in their pharmacy and medical benefit policies around step therapy that outline their process but only in the absence of a state mandate. “I don’t think that this is at all an uncommon practice,” Kennedy tells AIS Health, adding that this language likely is seen most with payers administering plans for self-insured employers “and to a certain degree Part D drugs, especially for tightly managed therapeutic areas (e.g., diabetes).”

Vogenberg agrees. “Most [payers] all use the same or similar strategies and use many of the same consultants to advise them on clinical pharmacy programs. There has been little to no innovation in this area since biologic and specialty drugs have hit the market, which is part of the problem in running PA/step-therapy tactics designed for earlier generation mass-market drugs.”

However, that’s not to say that the laws’ implementation has been seamless. According to the American College of Rheumatology (ACR), “the ad hoc approach some states take creates barriers to additional reforms.…Practitioners in states that do not have a comprehensive step therapy law often report that there has been no improvement in step therapy override processes or the paperwork associated with getting an override approved. California is perhaps the best example of this phenomenon. The ACR has had substantial feedback from California physicians indicating the paperwork required for step therapy override requests has not been reduced. The enforcement mechanism to punish violators of the statute is also inadequate. California is not alone in problematic approaches to step therapy.”

So to whom does enforcement of the laws fall?

As far as the federal legislation, the Department of Labor (DOL) is responsible for oversight of ERISA, Kocot tells AIS Health. “Although DOL has historically focused oversight primarily on retirement plans, such as 401(k) plans, health plans’ audits have increased as a result of requirements in the Affordable Care Act. DOL investigations and plans’ audits most often occur as a result of beneficiary complaints, rather than through random audits; thus, enforcement traditionally has been primarily reactive, rather than proactive.”

Continues Kocot, “enforcement of state laws may differ significantly depending on how those statutes are written and which state agencies or bodies have jurisdiction. However, in general, beneficiary appeals oversight in the private market is less robust than in Medicare and Medicaid managed care. Providers are the first step in the process for determining whether a patient may be eligible for an exception, although their judgment may rely upon a combination of clinical evidence and other more subjective factors. Collection of evidence to support the health plan’s ultimate decision about acceptance or denial of an exception rests with other members of the care team, including administrative support. Generally only a patient or legal representative or the patient’s physician can formally appeal a benefit coverage decision. At the same time, employers, who are accountable to both investors and markets, are expecting health plans to effectively manage the trade-offs between ensuring appropriate access to medications and controlling costs through benefit designs that prevent unnecessary utilization.”

According to Diehl-Boyd, “adherence to the legislative or regulatory mandates outlined in the various state utilization management rules fall to the plan to ensure adherence. Oversight of compliance to states’ utilization management lies typically within the department of health or department of insurance. However, the provider and patient can play a significant role in ensuring that the regulations are followed by the plans as each state and CMS provide means in which a provider or patient can seek appeals or register a complaint against an insurer if they feel the insurer is not performing in accordance with utilization management laws, including step therapy or other prior-authorization provisions.”

“Providers are caught in the middle while also sometimes contributing to the problem in order to maximize their own revenue stream,” Vogenberg tells AIS Health. “The system as a whole around reimbursement and value across HCP stakeholders needs alignment to the care outcomes being sought by plan sponsors and patients as purchasers of care.”

With payers doing business in several states, some of which may have legislation enacted and some of which may not, how do they make sure they’re complying with the law?

Prime Therapeutics, Lassen tells AIS Health, has “a dedicated team that tracks laws.”

Payers may take a variety of approaches, says Kocot, but “for ease of administration and risk management, some may enact plan policies across all states that comply with the requirements of the state with the most restrictive policies. However, in practice much of the benefit coverage determination process plays out in appeals processes that are not particularly transparent. Payers and providers may have legitimately different views on what constitutes compliance.”

“Payers are brilliant at this — they already have to navigate state-specific laws and requirements, so they’ll just add this to the pile of regulations,” says Kennedy. “Also, unlike some other regulations, this probably is less onerous in that it is simply extending to a new group of patients something that they already apply.”

Diehl-Boyd tells AIS Health that “all states have prior-authorization or utilization management laws that govern how a plan must comply with the variances found within the multiple jurisdictions. Health insurers put significant resources into their compliance programs to ensure they are following the various mandates. Many have codes of ethics that they make readily available on their website.” And for payers in states where laws have passed but not yet taken effect, “along with their compliance and legal departments, plans will coordinate with their vendor partners to ensure timely implementation of any legislative or regulatory mandate related to utilization management,” she says.

“By not addressing these issues, it will leave TPAs/payers in a very problematic situation of their own making,” observes Vogenberg. “This may further hurt consumers through increased costs of doing business and consolidation among TPA/payer entities.”

According to Diehl-Boyd, these utilization management strategies aren’t going away any time soon. “Because specialty drugs and the utilization thereof account for a large and growing percentage of care and the high cost attached to many of the therapies, you can anticipate that the use of step therapy (i.e., prior authorization) will continue as well.”

However, she continues, “there are significant inroads being made in the industry via innovative and technological advances that we can expect the time frames in which a patient has to wait to begin therapy for the specialty medication, even when step therapy is required, will begin to diminish over time.” She cites AMP: Access for More Patients, a technology-driven program from CoverMyMeds and RxCrossroads by McKesson that “fundamentally changes the way patient support for specialty therapies is provided.”

“Utilization management programs are important because they can protect the patient from harm and also save the member money,” maintains Lassen. “However, the traditional processes are not necessarily easy for anyone in the system to use. Prime is making critical investments in technology enhancements to automate the process and work upstream at the point of care so the physician will have all the information about a patient’s benefits and can prescribe them the best medicine for their situation while they’re still in the clinic. This will greatly improve patient experience, and it will take the member out of the middle.”

View information on step-therapy legislation by state at https://bit.ly/2peFhPN.

Contact Diehl-Boyd via Angela Masciarelli at AMasciarelli@covermymeds.com, Kennedy at lisa.kennedy@innopiphany.com, Kocot via Bill Borden at wborden@kpmg.com, Lassen through Karen Lyons at KLyons@primetherapeutics.com, Rubinstein at elan.b.rubinstein@gmail.com and Vogenberg at randy@iih-online.com.

by Angela Maas

 

ICER Releases Report on Drug Price Hikes; Opinions Vary on Its Usefulness, Impact

As the spotlight continues to focus on drug prices and companies’ pricing strategies, an industry watchdog group has published the first of many planned reports on the topics. The Institute for Clinical and Economic Review (ICER) released the inaugural edition of the series last month, offering fodder to critics of the pharmaceutical industry. But others question the findings. Still, the report should give some momentum to the various drug pricing efforts, industry experts tell AIS Health.

The Unsupported Price Increases Report, unveiled Oct. 8, evaluated a list of the 100 drugs with the most U.S. sales revenue during 2018. The data was provided by SSR Health, LLC, a division of independent investment company SSR, LLC. ICER withdrew 23 drugs from the mix that did not have a wholesale acquisition cost (WAC) increase greater than twice the increase in medical consumer price index (CPI) from fourth-quarter 2016 through fourth-quarter 2018.

“For the remaining 77 drugs, we determined, where possible, the increase in spending on these drugs in the US during 2017-18 that was due to increases in net price,” which is the WAC net of discounts, rebates and other price concessions, according to the report. That data was estimated by SSR Health combining “available data on unit sales with data published in manufacturers’ earnings reports on US sales revenue for each drug.”

ICER selected the top 10 drugs. It deleted two — Biogen’s Avonex (interferon beta-1a) and Amgen Inc.’s Enbrel (etanercept) — based on manufacturer-submitted information and added one, Celgene Corp.’s Revlimid (lenalidomide), based on public input.

“The goal of these assessments was to determine whether there was new clinical evidence in the prior three years (2016 through 2018) for the drugs under review,” said the group. “Based either on submissions from manufacturers or an ICER systematic review, ICER reviewed randomized clinical trials, high quality comparative observational studies, and, for low frequency harms, large uncontrolled studies. For drugs with multiple indications, evidence was sought for indications responsible for at least 10% of a drug’s utilization.”

ICER used the system known as GRADE (Grading of Recommendations, Assessment, Development and Evaluations) to evaluate new evidence. That framework rates evidence as very low, low, moderate or high quality. Price increases for products with moderate- or high-quality new evidence were considered increases “with new clinical evidence.” Two drugs — Gilead Sciences, Inc.’s Genvoya (elvitegravir/cobicistat/emtricitabine/tenofovir alafenamide) and Revlimid — fell into this category.

The drugs that ICER found to have price increases that were not supported by new clinical evidence were:

✦ Humira (adalimumab) from AbbVie, Inc., which had a 19.1% increase in WAC and a 15.9% increase in net price.

✦ Rituxan (rituximab) from Biogen and Genentech USA, Inc., a Roche Group unit, which had a 17% boost in WAC and 23.6% in net price.

✦ Lyrica (pregabalin) from Pfizer Inc., which had a 28.3% WAC hike and 22.2% net price rise.

✦ Truvada (emtricitabine/tenofovir disoproxil fumarate) from Gilead, which had a 14.3% increase in WAC and 23.1% increase in net price.

✦ Neulasta (pegfilgrastim) from Amgen, which had a WAC that rose 14.6% and a net price that increased 13.4%.

✦ Cialis (tadalafil) from Eli Lilly and Co., which had a 26.2% WAC increase and 32.5% rise in its net price.

✦ Tecfidera (dimethyl fumarate) from Biogen, which had a 16.7% WAC boost and a 9.8% net price increase.

Of the two excluded drugs, Genvoya’s WAC rose 14.3% and its net price increased 21.7%, while Revlimid’s WAC rose 25.8%. No net price change was included for Revlimid in the report, which said, “because of lack of face validity, we do not show the change in drug spending for 14 drugs that had a net price higher than WAC price in at least one of the eight quarters in which data were captured.”

Per the report, the increase in net prices for the seven top drugs resulted in a rise of more than $5.1 billion in total U.S. drug spending from 2017 to 2018. Humira accounted for more than $1.9 billion of that total.

ICER acknowledged that it “does not have the capacity to perform full economic analyses on the nine therapies evaluated in this report, nor would the time needed to develop full ICER reports (at least eight months) provide information in a useful timeframe for the public and policymakers. Therefore, this UPI report cannot determine whether the price increases for the two drugs that had new clinical evidence are justified or meet an ICER value-based price benchmark. Instead, the analyses focused on whether substantial new evidence existed that could justify a price increase. By identifying whether there is, or is not, new evidence of improved safety or effectiveness for drugs with substantial price increases we hope we have taken an important first step in providing the public and policymakers with information they can use to advance the public debate on drug price increases.”

Payers increasingly are putting more stock into ICER assessments.

For the Managed Care Biologics and Injectables Index: Q2 2019, Zitter Insights surveyed pharmacy and therapeutics (P&T) committee members who work for 49 commercial payers with 173.7 million covered lives between May 30, 2019, and July 20, 2019. Respondents indicated that they expected an increase in their organizations’ looking to ICER as influential or highly influential in their decision making over the next three years (see chart).

AIS Health and Zitter are both owned by MMIT.

P&T member respondents from 29 commercial payers with 69.1 million covered lives and from 21 Medicare payers with 21.1 million covered lives cited supporting risk- or value-based contracting as the main action they used ICER reports for over the last one to three years (see chart, p. 3).

Report Prompts Array of Reactions

Still, ICER has been an organization on which industry experts have a wide array of opinions, and this report was no different.

“If anything, this propelled the list price versus net price issue further into the public eye — most people weren’t aware of this, and so this helped highlight this issue,” says Lisa Kennedy, Ph.D., chief economist and managing principal at Innopiphany LLC. “Also, most products on the list were at the end of their length of exclusivity, so their budget impact had greater impact versus their price rise — and this would be a budget impact that is an empirical reflection of the product’s value.”

“This list of drugs and their net cost impact over two years adds fuel to the fire of Congressional concern with out-of-control drug prices,” says Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates (SMA 10/7/19, p. 1). “This issue isn’t going to go away … pressure will continue to build as drug prices continue to increase, both at launch and over time, individually and in the aggregate, compared to what other industrialized nations pay.”

He points to an opinion piece in the Nov. 2 New York Times penned by its editorial board that examines the Lower Drug Costs Now Act (H.R. 3) and the savings it could provide: $345 billion in federal spending over seven years and $158 billion in out-of-pocket costs over 10 years. But to realize these savings, “Americans will need to accept a trade-off that other advanced nations have long since come around to: Slightly fewer new drugs will come to market, in exchange for better prices on the medications that already exist.”

This “sobering view…that, because drug prices have become unaffordable for many, reduced innovation may be a price worth paying” is, Rubinstein says, the “first time I’ve heard this opinion expressed in a widely distributed mainstream credible publication.”

Fein: This Is ‘Name-and-Shame Exercise’

However, others doubted the usefulness of the report. Adam Fein, Ph.D., CEO of Pembroke Consulting, Inc.’s Drug Channels Institute and author of the Drug Channels blog, told STAT that “this is another meaningless name-and-shame exercise that tells us nothing about true drivers of health care spending. Some of the data appear to contradict publicly available information about net drug price changes. And I think ICER is being arbitrary in saying that any increase in a drug price must be tied to new clinical evidence. There is no medical product or service in the U.S. for which that is the rule. The cost of things goes up.”

The methodology that ICER used, Kennedy tells AIS Health, “has a few issues in that net price may not have increased at all yet a manufacturer could still end up on the list — that’s a real problem.” However, responds Rubinstein, “yes and no on whether a real problem, because some manufacturers raise WAC and deepen discount, leaving net alone — but the result of doing that is more money in rebates that go into PBM/insurer/employer pockets. It is unfortunately the case that a higher WAC paired with a higher rebate is attractive to these payers.”

Payers May Put Drugs on Radar

Asked what payers can do with the information in the report, Rubinstein says payers may choose to give the listed drugs further analysis and attention. Kennedy points out that “I suspect that many of these treatments are so old with such entrenched contracts with payers that it won’t do much.”

In addition, she says, “I think that price divorced from value is a futile exercise — what we need is a better understanding of the value for money that these products bring.”

According to Rubinstein, “ICER’s objective and the explicit way in which it met that objective is the key takeaway from this report — that is, by calling out particular drugs and dollars, the ICER report turned up the heat on those manufacturers, a shot over the bow to other manufacturers and grist for the mill for the overall pricing debate — at a time when there are many bills pending to address drug prices in the Congress.” The bottom line, he says, echoes the New York Times editorial: “Drugs are becoming unaffordable, and this [editorial] represents initial stirrings for discussion of whether the price that may be paid to ratchet back cost in terms of lower innovation may be worth paying. In my view, this is a debate that we need to have, because the cost of health care in this country, including pharmaceuticals, is multiples of what any other country pays and, depending on your point of view, is not supportable or is not worth supporting.”

What Are Americans Willing to Accept?

So, he continues, “are Americans ready to accept a centralized and powerful (in the sense of being empowered to say that X drug is not payable) system such as U.K.’s NICE [i.e., the National Institute for Health and Care Excellence] to assess acceptable price in context of a particular drug versus its therapeutic competitor value? Or are we willing to skirt the issue of directly doing this analysis, by linking our acceptable drug prices to the prices paid in a market basket of advanced economies,” as seen in the International Pricing Index floated by the federal government and proposed in H.R. 3.

“Since the U.S. drug market dwarfs all others worldwide, this international reference pricing approach would be a bit like an elephant thumbing a ride on the back of a horse,” says Rubinstein. “But the horse is likely to realize that this ride is for the long haul, that it has consequences (e.g., manufacturers aren’t likely to give those referenced countries steep price breaks knowing that those breaks boomerang back to U.S. prices) and decides it doesn’t like it much.”

View the ICER report at https://bit.ly/32Kwzat. For more information on the Zitter data, contact Jill Brown at jbrown@aishealth.com. Contact Kennedy at lisa.kennedy@epiphanomics.co and Rubinstein at elan.b.rubinstein@gmail.com.

by Angela Maas

This story was reprinted from AIS Health’s monthly publication RADAR on Specialty Pharmacy. Visit https://aishealth.com/product/specialty-pharmacy.

 

Reality Check: Narcolepsy

 

Our Point of View

First-line treatment for narcolepsy generally involves stimulant medications such as methylphenidate, amphetamines or modafinil/armodafinil, says Mesfin Tegenu, R.Ph., president of PerformRx. Some stimulants are available in generic form, and “many plans may require trial(s) of an available generic product prior to payment of a brand-only formulation, or trial of less costly alternatives to higherpriced generic items if there’s a significant price difference,” he says. April Kunze, Pharm.D., senior director, clinical formulary development and trend management strategy at Prime Therapeutics LLC, says that “plans can choose to implement a step-through-generics program for narcolepsy medications to ensure generics are used first line. Additionally, some plans may choose to exclude higher-cost products in favor of the generics.”

 

Coverage


Drugs

Under the pharmacy benefit, more than 66% of the covered lives in commercial formularies have utilization management restrictions. Across all drugs, more than half of the lives under Medicare pharmacy benefit formularies are not covered for at least one of the drugs.


Payers

For 75% of the  covered lives, payer pharmacy benefit formularies do not require step therapy (ST). Of the lives that require ST, 41% require multiple steps. More than 67% of payer-controlled pharmacy benefit covered lives require prior authorization, with 16% consisting of policies that are restrictive as compared with a product’s FDA-approved label.

 

AIS Health’s View

The older medications for the condition, which affects around one in every 2,000 people in the U.S., don’t always work, and tend to lose their effectiveness over time even if they were successful at first. But two newly approved narcolepsy medications offer novel, possibly more effective options to people for whom older drugs aren’t working well: The FDA in March approved Jazz Pharmaceuticals’ Sunosi (solriamfetol), the first dual-acting dopamine and norepinephrine reuptake inhibitor, for adults with narcolepsy or obstructive sleep apnea. In August, the agency approved Harmony Biosciences, LLC’s Wakix (pitolisant), a selective histamine 3 receptor antagonist/inverse agonist that works to increase histamine in the brain. Sunosi was launched in July, and Wakix is expected to be launched later this year.

 

Trends From AIS Health


Health Plans Wait for More Data on New Narcolepsy Medicines

Two newly approved narcolepsy medications offer novel, possibly more effective options to people for whom older medications aren’t working well, but most plans are requiring patients and providers to try generic alternatives first. The older medications for narcolepsy, a condition that affects around one in every 2,000 people in the U.S., don’t always work, and tend to lose their effectiveness over time even if they were successful at first.

Subscribers to AIS’s RADAR on Drug Benefits may read the in-depth article online


Datapoint: New Narcolepsy Drug to Compete With Xyrem

Harmony Biosciences last week won its first-ever FDA approval for its narcolepsy drug Wakix. The drug will be a direct competitor to Jazz Pharmaceuticals’ Xyrem, which currently holds preferred status in the pharmacy benefit for 11% of covered lives, growing to 23% with prior authorization and/or step therapy.

Via AIS Health


FDA Approves Harmony’s Wakix

The FDA approved Harmony Biosciences, LLC’s Wakix (pitolisant) for the treatment of excessive daytime sleepiness in adults with narcolepsy. The product is a first-in-class medicine, a selective histamine 3 (H3) receptor antagonist/inverse agonist. The company says Wakix will be available in fourth-quarter 2019.

Subscribers to AIS’s RADAR on Specialty Pharmacy may read the in-depth article online

 

Key Findings


Market Events Drive Changes

Multiple agents in the pipeline include several Phase III agents, one of which is a once-daily product that is the same chemical as Xyrem.

Pharmacy Benefit Implications

Nearly all products are covered but almost exclusively restricted by prior-authorization policies. The pharmacy benefit is dominant, and Xyrem provides the largest coverage variance with its Risk Evaluation and Mitigation Strategies program. Analeptics (Nuvigil/Provigil) are first line in the treatment pathway as they are available generically. Following that, generic immediate-release central nervous system stimulants are often second line, with Xyrem reserved for third line due to costs and safety.

 

AIS Health’s View

Treatment guidelines for narcolepsy generally call for both pharmaceutical and non-pharmaceutical approaches to be used together. For example, proper sleep hygiene at night — with a regular sleep schedule and around 7.5 to eight hours of sleep per night — may help patients avoid falling asleep during the day. Some patients also benefit from scheduled naps, and physicians urge an exercise program for patients, particularly young patients. Still, Tegenu says he doesn’t know of plans that encourage or require non-pharmacologic approaches to narcolepsy prior to or in addition to drug treatment as part of drug utilization management.

 

Plans Stick With Parkinson’s Generics, Eye New Gene Therapies in the Pipeline

November 11, 2019

Although three new drugs for Parkinson’s disease have been approved over the last year, plans generally are sticking with the drugs they’ve included on formularies for several years, most of which are generic, experts say.

That may change in the long term as new gene therapies that currently are in development are approved and come online (see box, p. 4). But none of those potential new treatments are close to market right now,

Although three new drugs for Parkinson’s disease have been approved over the last year, plans generally are sticking with the drugs they’ve included on formularies for several years, most of which are generic, experts say.

That may change in the long term as new gene therapies that currently are in development are approved and come online (see box, p. 4). But none of those potential new treatments are close to market right now, says Mesfin Tegenu, R.Ph., president of PerformRx.

“Many commonly used therapies for Parkinson’s disease — carbidopa-levodopa, MAO-Bs, dopamine agonists — have available generics, which on most plans would be considered formulary options, or one generic product within each class would be selected as formulary,” Tegenu tells AIS Health.

The FDA in August approved Kyowa Kirin, Inc.’s Nourianz (istradefylline) tablets as an add-on treatment to levodopa/carbidopa in adult patients with Parkinson’s disease experiencing motor fluctuations, known as “off” episodes. In February, the FDA approved Osmotica Pharmaceutical US LLC’s Osmolex ER (amantadine) for the treatment of Parkinson’s disease. And in late December, the FDA approved Accorda Therapeutics’ Inbrija (levodopa inhalation powder) for intermittent treatment of off episodes in people with Parkinson’s disease taking carbidopa/levodopa.

Still, plans are stocking their formularies (see graphic below) with less expensive generic medications, of which there are numerous options. Parkinson’s disease treatment generally progresses through drugs that have a moderate effect but fewer side effects to drugs that are more effective, but have more significant side effects, Tegenu says.

“Choice of which pharmacotherapy to use initially is individualized based on the characteristics of the patient, the disease and the drugs,” he says. “There is no single preferred therapy, and trade-offs are common. Optimal care requires a flexible trial- and-error approach. Further treatment additions and changes are based on patient symptoms and response.”

Tegenu says there are four main classes of agents for Parkinson’s disease:

✦ Monoamine oxidase-B (MAO-B) inhibitors, which include selegiline and the brand name product Zelapar (selegiline hydrochloride; formulated to dissolve by mouth for people who can’t swallow pills). These drugs block an enzyme that breaks down levodopa. According to Tegenu, they have modest effects but are well tolerated and convenient. “They’re limited to use in patients with mild symptoms,” he says.

✦ Amantadine, which may cause the brain to release more dopamine. This drug also has modest effects, Tegenu says, but is well tolerated. It’s typically used in early Parkinson’s.

✦ Dopamine agonists such as pramipexole and ropinirole. These have “immediate potency for improving motor symptoms [and] lower risk of motor complications than levodopa,” Tegenu says, but they also carry a higher risk of somnolence, hallucinations and impulse control disorders. They’re not well-tolerated in older adults and those with cognitive dysfunction, he says.

✦ Levodopa, which is “the most effective agent for control of motor symptoms, but is less convenient and requires more frequent dosing,” Tegenu says. It also carries the highest risk for motor complications, he says.

April Kunze, Pharm.D., senior director, clinical formulary development and trend management strategy at Prime Therapeutics LLC, notes that a fifth class of drugs — anticholinergics — is used to control tremor in Parkinson’s patients.

“All of these drug classes have medications that are available generically,” Kunze tells AIS Health. “In general, the choice of treatment of Parkinson’s disease depends on the patient and their disease state. Each drug has its trade-off.”

 


MMIT’s Take: Parkinson’s Disease

“The treatment for Parkinson’s Disease is based on the patient’s specific symptoms,” Tracy Bilardo, a client success lead at MMIT, tells AIS Health. “Treatment regimen typically involves levodopa [a dopamine promoter] in combination with other agents to treat ‘off’ episodes,” motor fluctuations that occur in patients between levodopa doses. Bilardo says the Parkinson’s market is largely dominated by generic drugs, as many of the disease’s therapeutic options are long-tenured.

However, she adds that “multiple new branded options have become available in recent years with differing modes of administration,” and notes that the market has a full pipeline, so market dynamics could shift in the near future.

“Branded treatment options are primarily covered on the pharmacy benefit, with Apokyn and Duopa straddling both pharmacy and medical benefits,” Bilardo says, adding that Medicare is an exception, with most Medicare plans driving US WorldMeds’ Apokyn pen to the pharmacy benefit. “Apokyn and Neupro achieve the best preferred access across all lines of business. The Medicare channel provides multiple modes of administration on preferred tiers with Rytary, Apokyn and Neupro.” Bilardo adds that oral medications dominate physician prescribing patterns despite evidence that injectables, such as Apokyn, and transdermal patches, such as UCB’s Neupro, show certain advantages. “Physician behavior and coverage are slower to adopt compared to oral agents,” she says.

Bilardo says step therapy is rare in the treatment of Parkinson’s, and restrictive management strategies are unusual. “Since Parkinson’s treatment revolves around patient symptoms and ‘off’ episodes, many payers are reluctant to implement strict utilization management tactics such as step therapy to limit utilization of branded agents,” she says. “When a step is implemented it is through a generic [or generics].”

Bilardo adds that prior authorization use requires diagnosis and clinical documentation. “Commercial and Medicaid business lines are more likely to implement a step through a generic, [while] Medicare relies more on copay differentials to drive utilization away from branded agents.”


 

All three Parkinson’s drugs approved in the last year —Nourianz, Osmolex ER and Inbrija — are used to treat the motor complications that are a known effect of levodopa treatment, Kunze says. Another drug, Xadago (safinamide), which Newron Pharmaceuticals SpA licensed to US WorldMeds, LLC, was approved in 2017, and is also used to treat off episodes.

Of those four drugs, only Osmolex ER and Xadago are for sale currently in the U.S. For Osmolex ER, 30 tablets cost between $453 and $490, depending on the pharmacy’s discount. Xadago typically sells for a discounted price of around $781.

Inbrija, meanwhile, is expected to cost around $1,000 for a supply of 60 inhalation capsules. Kyowa Kirin hasn’t yet announced a price for Nourianz.

Plans generally aren’t covering Xadago and they aren’t expected to cover Inbrija, Tegenu says. “Members would be able to request an exception through the prior authorization process for these products,” he adds.

For example, Blue Cross Blue Shield of Arizona states in its pharmacy coverage guidelines that it will cover Xadago only if the patient first has trialed drugs from three different classes: pramipexole or ropinirole; selegiline or rasagiline mesylate; and entacapone or tolcapone. Xadago can only be used as an adjunctive treatment to levodopa and carbidopa, according to the coverage document.

UnitedHealthcare, meanwhile, states that Xadago will be approved to treat off episodes based on a history of failure, contraindication or intolerance to both rasagiline and selegiline.

For Osmolex ER, plans generally require failure on trials of immediate-release amantadine.

For example, Centene Corp. subsidiary Health Net states in a clinical policy document for its commercial and Medicaid members that it will consider Osmolex ER in patients with a diagnosis of dyskinesia who are receiving levodopa-based therapy, and who fail a two-week trial of immediate release amantadine, or whose physicians can provide medical justification that supports the inability to continue use of immediate-release amantadine, such as contradictions to excipients.

Gene Therapies in the Pipeline

Both Tegenu and Kunze say gene therapies eventually may change the way Parkinson’s disease is treated. Gene therapies that would alter the disease paradigm are several years from approval right now, although Kunze notes that four potential therapies are in Phase II trials.

They are:

✦ Voyager Therapeutics’ VY-AADC-01, which is designed to put the AADC enzyme into brain cells where it can convert levodopa to dopamine. A Phase III trial (RESTORE-2) is expected in the first half of 2020, Kunze says.

✦ MeiraGTx Holdings plc’s AAV-GAD therapy, in which glutamic acid decarboxylase (GAD) is delivered into the subthalamic nucleus. AAV-GAD has completed a Phase II trial.

✦ Axovant Gene Therapies, Ltd.’s AXO-Lenti-PD, which is designed to deliver three genes via a single lentiviral vector to encode a set of critical enzymes needed for dopamine synthesis. In June, Axovant reported six-month data from a Phase I/II trial.

✦ Prevail Therapeutics’ PR001, a single-dose gene therapy for Parkinson’s patients who have GBA1 mutations and neuronopathic Gaucher Disease. Prevail said Sept. 10 that it was in the process of activating clinical sites for its Phase I/II trial and expects to begin dosing patients later this year.

“Although it may be a couple of years before approval from the FDA, gene therapy for Parkinson’s disease is being researched,” Kunze says.

by Jane Anderson

 

Walgreens Joins Centene in Pact With Cloud-Based PBM RxAdvance

A recently announced partnership between Centene Corp., Walgreen Co. and the technology-focused PBM RxAdvance promises “an innovative model for pharmacy management that aims to increase transparency, enhance customer experience and ultimately result in better health outcomes at lower costs.”

While retail pharmacy-PBM-insurer combinations are “going to be par for the course” now, what makes this move unique is the fact that Centene is taking that model beyond the commercial space and into Medicaid, says Ashraf Shehata, a principal in KPMG’s health care life sciences advisory practice and the firm’s Global Healthcare Center of Excellence.

Indeed, the partnership between Centene, RxAdvance and Walgreens “addresses the growing need for innovative approaches to pharmacy benefits management, particularly in Medicaid,” Centene Chairman and CEO Michael Neidorff said during the insurer’s third-quarter earnings call on Oct. 22.

Neidorff said his company chose to deepen its existing partnership with Walgreens because its business niche aligns well with Centene’s.

“There are various outlets in pharmacy, and Walgreens has done a particularly good job in urban areas and is recognized for it in the inner cities, where we have a large population,” he said. “So working closely with them is an added plus while still maintaining relationships with the other large retail outlets.”

For its part, Walgreens expects that the partnership will “empower our pharmacists to make critical decisions at the point of sale to help improve adherence and also to reduce avoidable medical costs,” Stefano Pessina, executive vice chairman and CEO of Walgreens Boots Alliance, Inc., said in a press release.

Platform ‘Key’ to Patient-Centered Care

In Shehata’s view, the cloud-based PBM platform that all three organizations will use is key to the alliance, since it eventually will allow advanced point-of-care capabilities for pharmacists.

“The idea would be to use that platform to evolve it even further,” he notes. “This is an area where we’re going to start to see more and more technological enhancements,” he says, which is key to “getting to a patient-centered, member-centered design.”

The new partnership builds on Centene’s initial investment in RxAdvance back in 2018. The insurer has now increased its stake in RxAdvance, and Walgreens has “made a small investment” in the firm, which touts a cloud-based PBM platform aimed at promoting transparency, reducing costs and improving customer experience and health outcomes.

PBM platform aimed at promoting transparency, reducing costs and improving customer experience and health outcomes.

During Centene’s Oct. 22 earnings call, Jeffrey Schwaneke, executive vice president and chief financial officer, declined to say exactly how much the insurer increased its stake in RxAdvance.

“When we had made the RxAdvance investment initially, we had contemplated a few different steps along the way, so I think this is really kind of the one-year step,” he said. “Without getting into a lot of the specifics, we increased the nominal amount, but I think it’s representative of momentum and the trajectory of the work we’re doing together.”

While the companies’ press release offers few details about what exactly the new partnership will entail, RxAdvance’s overall business strategy is to streamline and integrate the often-fragmented platforms that PBMs use to process pharmacy, medical, laboratory and other data, the PBM’s CEO, Ravi Ika, previously told AIS Health.

The companies do say that they’ve already identified initial markets in which to deploy the model and that they plan to offer it to “other large payers.”

Asked which payers might be interested in such a model, Shehata points to Blue Cross Blue Shield plans that don’t contract with the Blues-owned PBM Prime Therapeutics, LLC. The products emerging from the partnership also could be of interest to provider-owned health plans, he notes.

Still, real-time integrated capabilities between the pharmacist, plan and PBM ultimately are “something you’re going to see at every PBM,” he says. The partnership between Centene, Walgreens and RxAdvance places the alliance at “parity” when compared to other major PBMs, he adds.

During Centene’s earnings call, one analyst inquired how states’ moves to change their relationship with PBMs might impact the insurer’s business and its RxAdvance partnership. Some states, like Michigan, are aiming to move the management of Medicaid enrollees’ pharmacy benefits from managed care back to the state, while states such as Ohio have been pushing PBMs to move to a more transparent pricing model.

“The states want transparency, and we agree with that,” Neidorff said. “I think RxAdvance will only enhance that opportunity — and some of the systems they have and some of that information moves us in that direction at an accelerated rate.”

by Leslie Small

 

Precision Medicine Hits N of 1 Milestone but Still Faces Many Cost, Regulatory Obstacles

November 4, 2019

Truly personalized or precision medicine — the idea that every treatment is matched to a patient’s unique genetic characteristics — moved closer to reality recently as researchers announced the first custom drug created to treat a genetic disease: milasen, named after its sole patient Mila Makovec, who suffers from a rapidly progressing deadly neurological disorder called Batten’s disease.

But Mila’s so-called “N of 1” success story, detailed last month in the New England Journal of Medicine and covered in various other publications,

Truly personalized or precision medicine — the idea that every treatment is matched to a patient’s unique genetic characteristics — moved closer to reality recently as researchers announced the first custom drug created to treat a genetic disease: milasen, named after its sole patient Mila Makovec, who suffers from a rapidly progressing deadly neurological disorder called Batten’s disease.

But Mila’s so-called “N of 1” success story, detailed last month in the New England Journal of Medicine and covered in various other publications, also spotlights the potential pitfalls in therapies developed in part based on genetics: They’re very expensive, the companion diagnostics needed to make them work also are very expensive, and the groups of patients who might benefit are small. In Mila’s case, the drug — a splice-modulating antisense oligonucleotide drug — is designed to work only for her.

“The cost of development and limited funding are certainly the top challenges facing development of personalized drugs,” says Sudhir Agrawal, D.Phil., visiting professor in the Department of Medicine, University of Massachusetts Medical School, Worcester, Mass., and a founder and former CEO of Idera Pharmaceuticals, which is pursuing nucleic acid-based therapies.

“In addition, clear guidance on regulatory paths and nonclinical safety support are needed to advance the drug candidate,” Agrawal tells AIS Health. He also notes that diagnostic and genetic tests to pinpoint the underlying cause of the disease must be developed.

Still, now that it’s clear the therapies hold potential, they should be pursued, says Art Krieg, M.D., founder and chief scientific officer at Checkmate Pharmaceuticals. Checkmate is developing cancer immunotherapies that would be used to treat large numbers of patients, but Krieg has worked in the oligonucleotide field for more than 20 years, including running oligonucleotide therapies at Pfizer Inc. and serving as chief scientific officer at Sarepta Therapeutics, Inc.

“Mila is the first patient to have received an individualized oligo therapeutic for a unique genetic mutation,” Krieg tells AIS Health. “I believe that there are thousands, and probably tens of thousands, of children like Mila with rare diseases who could potentially benefit from therapy with an individualized oligo. We owe it to these children to do everything that we can to make these drugs available to them, especially when their diseases are likely to be rapidly progressive and fatal.”

Drugs Can Treat One Patient or Many

Although the terms “precision medicine” and “personalized medicine” generally are used interchangeably to mean treatments developed for patients based on genetic, environmental and lifestyle factors, the National Research Council prefers “precision medicine” to the older “personalized medicine.” Still, both terms are in use.

Precision drugs may be developed for just one person — as in Mila’s case — or may be developed for a large subset of patients who share genetic characteristics. Medications range from targeted small molecule drugs such as Novartis International AG’s Gleevec (imatinib), which is used to target a gene in chronic myelogenous leukemia, to monoclonal antibody Herceptin (trastuzumab), from Roche Group unit Genentech USA, Inc., which targets a protein called HER2 that is overexpressed by tumors in around 30% of breast cancer patients.

Agrawal says he also would consider chimeric antigen receptor T-cell (CAR-T) medicines as personalized drugs, even as they’re expanded to a wider patient population. And the antisense oligonucleotide drug used in Mila’s treatment is the ultimate precision drug.

According to the Personalized Medicine Coalition, medicines that include labeling identifying the patients who are most likely to realize outsized benefits or experience fewer side effects have accounted for more than 20% of FDA approvals for the last five years (see chart, p. 10). These personalized medicines set a record in 2018, topping 40% of approvals, according to a report published in February 2019 that credits policies recently advanced by the FDA for “fostering a favorable environment for innovation that has accelerated this trend toward personalized medicine.”

Still, the report says, providers and payers continue to make decisions based on data from population averages, instead of embracing personalized medicine. The group notes that the Trump administration is encouraging Medicare Advantage plans to implement step-therapy policies that require patients to try less expensive treatments before gaining access to more expensive options under Medicare Part B.

This “ignores the documented trend toward therapies that have information in their labels about the populations they will likely benefit,” the coalition said. In fact, it’s counterproductive, the report argues, since by the time a patient who is likely to respond to a personalized therapy first completes a less expensive, one-size-fits-all course of treatment for a disease like cancer, the disease may have progressed so far that the personalized treatment can no longer help.

Better-Fitting Treatments Offered

Personalized drugs have multiple potential benefits, and “it’s hard to choose the top two or three,” says Nadia Atallah Lanman, a research assistant professor in Purdue’s College of Veterinary Medicine who manages the Collaborative Core for Cancer Bioinformatics (C3B), a shared facility between Indiana University Melvin and Bren Simon Cancer Center and Purdue University Center for Cancer Research. “However, if I had to pick, I suppose it would be to be able to better prevent diseases, to enable clinicians to pick the most effective drug or drugs possible to treat the patient with and to improve early disease detection.”

C3B aims to integrate and accelerate cancer discovery, drug discovery, precision medicine and training, Lanman tells AIS Health. Some of the benefits of personalized medicine are being realized already, she says. “For example, there are a number of targeted cancer therapies, and for some types of cancer, genomics can be used to determine whether a patient is a candidate for a particular treatment based on whether they have an appropriate target for the drug. Genetic screening is also often done prior to conception to predict the risk of passing on genetic disorders.”

C3B has worked on 312 projects since its inception and has generated 33 peer-reviewed publications, Lanman says. For example, she says, C3B supported an investigation into Apexian Pharmaceuticals, Inc.’s APX3330, a compound being studied in several different types of solid tumors and in pre-leukemia.

In another project, C3B aims to use pet dogs as a model in which to study cancer, Lanman says, since dogs spontaneously get cancer, present similarly to human patients, and, for some cancers, treatment in dogs mirrors that in humans. “We have a project where we can predict from pre-chemotherapy mRNA levels whether the patient will respond well to chemotherapy or whether they will be resistant,” she says. “We essentially integrated biodynamic imaging data with RNA sequencing data and used this to identify differences between dogs who respond well and dogs who do not respond well to chemotherapy.”

Diagnostic Testing May Be Roadblock

Precision medicine tends to alter the timing of drug development, since researchers need to know more precisely what they’re trying to treat before beginning the process. Of course, pinpointing a disease process down to the molecular or genetic level involves potentially expensive diagnostics. “The diagnostic/genetic test is the key to identifying the underlying disease,” Agrawal says. “Once the proper diagnosis has been made, only then a successful drug could be developed or an approach can be taken.”

Therein lies a potential barrier: Diagnostic testing can cost as much as or more than a dose of the drug, and payers may balk. In oncology, for example, diagnostic and biomarker testing has become integral in drug development and direct patient care, but there frequently are gaps in coverage for these tests.

In the case of personalized medicines designed to treat rare genetic diseases, the companion diagnostic likely is whole genome sequencing — which was what clinicians used in Mila’s case, Krieg says, adding that the cost is “not trivial.”

And it’s not always successful, either. The Harvard University-based Undiagnosed Diseases Network (UDN) has been performing whole genome sequencing for select patients, Krieg says, “and I think that even in that expert network the success rate for identifying a mutation causing a patient’s disease is only around 30%, maybe less. Right now, all the UDN can do is to tell patients they have found a diagnosis. I would guess that the UDN is excited about the potential for personalized medicines to provide real hope for their patients.”

Bill Would Streamline Testing Process

Legislation pending in Congress would streamline the diagnostic process, at least for children on Medicaid. The bipartisan bill, called the Advancing Access to Precision Medicine Act, would establish a pilot program within Medicaid to cover genetic and genomic testing in children with unresolved conditions that have suspected genetic causes. The bill also would fund research into how testing can improve health outcomes, potentially reducing Medicaid spending. Its sponsors, who include Rep. Eric Swalwell (D-Calif.), believe that if the Medicaid pilot program is successful, private insurers would begin to pay for testing.

The diagnosis and drug development process in extremely rare diseases may begin with motivated parents whose child is suffering from an unidentified genetic disease. This then can lead to drug discovery, Agrawal says. “Patients, along with interested researchers and patient foundations, mostly take the lead in conducting the initial work, which allows biotech or pharma to participate, furthering the development,” he says.

Obviously, patients with rare diseases for which there is no current therapy want new drugs that might help them, Krieg says. Therefore, he says, researchers should focus on a more efficient, cost-effective method of targeting these rare conditions, which he believes should involve oligonucleotide therapeutics. Oligos “inherently are closer to a rational drug design,” Krieg says, because they are designed to specific gene sequences like the one Mila has.

“Because the drugs are made of modular components that are ready to assemble by a series of very efficient chemical reactions, the entire drug discovery process can be accelerated to a matter of months and the cost brought down to around $2 million or less, depending on the specific complexities of the target,” he says. This is in contrast to around $20 million before human trials begin for a small molecule, he says, and perhaps $8 million before new biologics, such as antibody therapeutics, can go into the clinic.

The process moves very quickly, Agrawal says. “In the recent case with Mila, genetic analysis pinpointed the defect, the antisense approach was prioritized, the antisense drug was designed and evaluated using patient cells, and treatment was initiated in under one year,” he says.

“The cost of development of a drug is always high,” Agrawal adds. “However, development of personalized drugs should be faster and would have a higher probability of success.

In addition, if the potential benefits are not being observed, further development could be discontinued sooner rather than later. This needs to be communicated by participating parties to the payer.”

Still, oligonucleotides can’t treat all patients, Krieg says, since only certain types of tissues — such as those in the liver or in the central nervous system — will uptake the drugs into cells. The type of genetic defect also matters, of course. “Only certain types of genetic defects can be corrected with oligo therapies, and perhaps less than 10% of patients with [a] rare disease might possibly benefit,” Krieg says. “Or maybe the true percentage is under 1% — nobody really knows right now.”

Krieg says he expects the development of oligonucleotide therapies to be funded by philanthropic organizations or perhaps by families who are able to build the necessary donor networks and raise significant amounts of money through crowdfunding.

In Mila’s case, Boston Children’s Hospital hired manufacturers to produce supplies of a drug custom- designed to fix the error that causes her form of Batten disease. Her treatment, the cost of which remains undisclosed, was paid for in part by Boston Children’s, in part by research grants and in part by private foundations.

“As we streamline the process of developing these therapies, I hope that we can industrialize this process to the point where it becomes economically feasible for our society to pay for it,” Krieg says. “For example, the cost of care for many children with rare diseases is on the order of $400,000 per year. If the cost of developing an oligo drug to treat that condition is under $2 million, then at some point it becomes cost-effective to have society pay for that development. I hope we will reach that point.”

Beyond Cost, Other Challenges Remain

Cost isn’t the only potential roadblock to the widespread adoption of precision medicine. There also are regulatory issues, plus access issues that are unrelated to the price of the therapy itself.

In fact, regulatory issues abound, Agrawal says. “The FDA or other regulatory agencies have to clearly define the regulatory pathways for the patient population, diseases and stage of diseases to be treated,” he says. “There has to be clear guidance from regulatory authorities of what type of nonclinical safety data package would be acceptable to initiate dosing.”

Study design also is key, he asserts. If personalized drugs are designed to treat one patient or a cohort of patients, “what clinical endpoints would be acceptable if placebo-controlled studies are not being conducted?” Agrawal asks. “For many rare diseases, there are no appropriate preclinical disease models. Regulatory authorities need to provide guidance on what type of preclinical proof of concept data would be acceptable to advance personalized treatment.”

An additional potential concern with precision medicine involves ethical and legal issues, Lanman says. “Patients and participants in research need to have a good understanding of patient data, while still enabling it to be useful to biomedical researchers,” she says. “And in general, managing data and integration of data with electronic health records is challenging. We need to improve platforms for data integration, while protecting patient data.”

Even interpretation of the data can be a challenge, she notes, “so we additionally need to ensure that this data, once integrated, is not misinterpreted. Thus, training and education [are] important to increasing the availability and benefits of precision medicine to patients.” Finally, Lanman points out, it can be challenging in the case of rare diseases to find enough patients to make adequate sample sizes for studies.

Still, cost and access may be the biggest issues. “Access due to geography can be a challenge for individual patients. Treatments can be very expensive, and the interplay of drug manufacturers and insurance companies can lead to patients’ being unable to afford even standard-of-care treatment,” Lanman says.

Of course, she points out that the problem of cost isn’t limited to precision medicine, but she says she believes that manufacturers of precision drugs owe it to the public to keep the cost of diagnostics and treatment as affordable as possible. “Likewise, insurers should work to ensure patients have access to these diagnostics and treatments. I think insurers should aid patients as best as they can, in ways such as accepting copay assistance cards and also facilitating patients in understanding what options for personalized diagnostics and treatment are available.”

Finally, precision drugs can’t do it all, Lanman warns. “It’s important to remember that precision medicine is not just about making new pharmaceuticals,” she says. “It also involves prevention and changing our lifestyles to avoid disease or to perhaps alter the progression [of] disease. Additionally, precision medicine can involve identifying patients who benefit from less invasive procedures.”

And in the case of Mila and patients like her, precision drugs — even the N of 1 oligo drug developed just for her — will not repair damage already done. For Mila, the drug stopped her seizures.

In addition, they won’t cure the genetic diseases, nor will they repair damage already done. “I should point out that if they work, these therapies are expected to block, or at least delay, the progression of disease, but they are very unlikely to heal damage to tissues that has already progressed beyond the point of irreversible damage. The hope would be that as these therapies become established, therapy could be offered at a much earlier stage of the disease, before there is extensive irreversible damage,” Krieg says.

Read the Personalized Medicine Coalition report on genetically targeted therapies at https://bit.ly/2VVQC1Y. Contact Agrawal at sudhir.agrawal@umassmed.edu, Krieg at akrieg@checkmatepharma.com and Lanman at natallah@purdue.edu.

by Jane Anderson

 

Health Systems Can Reap Multiple Benefits By Offering Specialty Pharmacy Capabilities

As the specialty pharmacy space continues to grow, more entities within the health care system are boosting their capabilities in this area. Various health systems are implementing some form of a specialty pharmacy, often coordinating this effort through various partnerships. One such example of this is North Memorial Health and Trellis Rx, which began working together in 2018. The two companies spoke with AIS Health about the experience and the outcomes the collaboration has produced.

The Minnesota-based North Memorial Health system includes two hospitals, 26 specialty and primary care clinics, urgent and emergency care offerings and medical transportation services, and has more than 350 care providers and more than 6,000 team members. Trellis Rx, which started in 2016, partners with health systems in order to finance, build and operate specialty pharmacies.

The health system began offering specialty pharmacy services in 2009 though North Memorial Health Cancer Center. A patient advocate was placed in the clinic with a goal of providing support, including financial assistance, to patients requiring intravenous chemotherapy. That focus eventually expanded to include oral oncolytics, explains Paul Krogh, Pharm.D., system director of pharmacy services and infectious diseases at North Memorial Health.

Another person was added in 2015 to help support customers on additional specialty drugs. This expansion, he says, was because “many of our customers struggled to afford these therapies, and our providers spent numerous hours on prior authorizations and other required paperwork. Adding another financial advocate allowed us to provide comprehensive support to patients prescribed IV and oral oncolytics.”

Other specialists began asking for similar support, Krogh tells AIS Health, but “unfortunately, we didn’t have the capacity to extend services to other customers at the time.”

That same year, the health system began serving its employees taking specialty drugs through its retail pharmacies. “We became the preferred specialty pharmacy for our employees in May and captured 72% of these prescriptions within just six months,” he says.

Prior to the partnership, North Memorial Health served its cancer patients and employees via three on-site retail pharmacies, supplementing them with 340B contract pharmacies for limited-distribution drugs.

In November 2018, North Memorial Health unveiled its partnership with Trellis Rx. Initially available within the oncology and infectious disease spaces, the model expanded the existing offering to include “direct, in-clinic access to pharmacists and patient liaisons” to help with the coordination, education and support of people on specialty drugs. It also helps acquire insurance authorization and locate financial assistance.

Trellis Rx provided an experienced team to work in North Memorial Health clinics, including a program manager who oversees day-to-day operations. It also integrated a specialty pharmacy technology solution with the health system’s electronic health record system and “implement[ed] customized strategies to gain access to payer networks and limited-distribution drugs,” says Krogh, which previously had been “a major challenge.” Trellis Rx, he says, helped the system quickly gain access to five limited-distribution drugs. “Their support was also pivotal to us gaining access to Blue Cross Blue Shield of Minnesota this fall.” In addition, Krogh states, Trellis Rx shifted “all financial and operational risk away from us: They offer a 100% performance-based business model that aligns their incentives to ours and greatly reduces our related operating expenses.”

“Partnering with Trellis Rx has allowed us to rapidly extend high-touch, personalized specialty pharmacy services to more customers who require these therapies to manage chronic and complex conditions,” says Krogh. Since its start, the model has expanded to four clinics and added six on-site specialty pharmacy team members. “In our first 10 months, we supported over 600 patients and grew specialty pharmacy revenue by almost 100%,” he says. “Most importantly, we have addressed many barriers to medication access and adherence. As of August, we have connected patients with over $600,000 of financial assistance and reduced turnaround time from around 14 days to just 1.9 days.”

Other outcomes based on data from November 2018 through August 2019 include:

✦ 98% average adherence based on proportion of days covered.

✦ 100% hepatitis C treatment completion rate.

✦ 127% improvement in the Net Promoter Score, which measures people’s willingness to recommend a company’s services, from -62 to +65.

“We attribute these results to Trellis Rx’s fully integrated model,” says Krogh. Critical to the health system’s success, he contends, are the on-site program manager, pharmacists and pharmacy liaisons and Trellis Rx‘s Arbor technology. “Our pharmacists and pharmacy liaisons work as part of our customers’ care teams, just like doctors and nurses, and have access to our customers’ EHRs [i.e., electronic health records]. Being clinic-based makes it easy for them to establish strong trust and easily communicate with both customers and providers. Ultimately, this allows us to offer personalized, proactive care that is needed to improve access and adherence to specialty medications.”

In fact, North Memorial Health is “expanding one of our pharmacies to better accommodate home delivery and cold-chain shipments,” Krogh tells AIS Health, as well as “exploring options to launch a pharmacy specifically for specialty pharmacy and employee mail order within the next two to three years.”

In the management of people taking specialty therapies, pharmacists “are increasingly being recognized as critical care team members — something we’ve always believed,” says Tony Zappa, chief solutions officer at Trellis Rx. With the high costs and adherence issues among specialty drugs, “clinic-based pharmacists add value by helping providers select the most appropriate specialty medications for patients and then monitoring the clinical impact of these therapies over time. If a specialty medication isn’t having the desired clinical impact, pharmacists can flag this for providers sooner and recommend alternative therapies. Pharmacy liaisons also help address the financial toxicity that prevents many patients from accessing these therapies.”

Zappa points out that health systems offering clinic-based specialty pharmacy services is a trend that continues to grow. “This model was primarily used by academic institutions at first, but now we’re seeing community and rural health system like North Memorial Health successfully adopt it too,” he says, adding that his company sees five trends that are driving the adoption of the model.

First, “vertical integration of health plans, PBMs, and retail providers…is forcing health systems to differentiate their outpatient clinics to compete with retail providers,” says Zappa. “It’s also driving health systems, especially those in at-risk and value-based contracts, to find innovative ways to partner with health plans.”

Krogh echoes that point: North Memorial Health is “entering more risk-based contracts with payers, so the ability to offer more comprehensive care and control the total cost of care for our customers is very important to us. Being able to support our customers across the care continuum, including their specialty medication experience, is critical to improving health outcomes and preventing avoidable medical events.”

Second, as reimbursement for specialty drugs shifts from the buy-and-bill model within the medical benefit to the pharmacy benefit, health systems can provide more comprehensive patient care if they can fill and administer not only medical benefit drugs but also those adjudicated under the pharmacy benefit, he points out. In addition, being able to provide therapies regardless of their benefit gives the health system a “financial advantage.”

Having the ability to access integrated pharmacy and medical records allows for a comprehensive approach to health care. By having its own specialty pharmacy, North Memorial Health is “able to offer the highest level of care to customers,” asserts Krogh, adding that patients’ experiences with external specialty pharmacies often are “confusing and uncoordinated.”

Customer care is at the heart of the third trend: a “heightened focus on patient experience to differentiate” health systems from their competitors, says Zappa. “As ‘consumerization’ increases in the health care industry, health systems must differentiate themselves by providing a convenient, data-driven and personalized experience to attract and retain patients. A hospital specialty pharmacy program creates a superior patient experience that can build loyalty and brand equity,” he maintains.

Indeed, says Krogh, North Memorial Health “is one of the only remaining independent health systems in the Minneapolis area. As consolidation has increased in our market, we’ve focused on differentiating ourselves by offering the best customer experience and service. Offering clinic-based specialty pharmacy services is one way we can provide concierge-style care to our customers, while also improving access and adherence to specialty medications in order to enhance clinical outcomes.”

Zappa explains that “providers often spend up to two hours per day managing administrative tasks required for specialty medication prescriptions, adding to the current burnout epidemic.” With specialty liaisons on site to handle administrative work, an internal specialty pharmacy can “reduce the burden of specialty medications on our providers, which boosts their satisfaction,” says Krogh, who cites a recent study that estimates physicians spend almost 853 hours annually on tasks related to prior authorization.

Finally, Zappa tells AIS Health, “as health systems invest in outpatient services to combat inpatient revenue declines and improve margins, offering on-site specialty pharmacy services can bolster this strategy. In addition to creating a multimillion-dollar revenue stream, a specialty pharmacy program can improve a health system’s bottom line by attracting more patients to its outpatient clinics and reducing the total cost of care.”

Zappa contends that there are multiple key advantages for health systems with their own specialty pharmacy as opposed to using an outside company. Face-to-face interactions with patients allow clinic-based personnel to get to “know patients personally and can build credibility and trust via in-person interactions. Being on-site also allows clinical pharmacists and pharmacy liaisons to communicate more effectively with patients, which enables them to develop solutions to access and adherence barriers more quickly.”

 


Source: Some Misconceptions Exist Around Health System Specialty Pharmacies

As more health systems implement in-house specialty pharmacies, some misunderstandings potentially could pose an issue for this approach. Tony Zappa, chief solutions officer at Trellis Rx, which partners with health systems in order to finance, build and operate specialty pharmacies, says his firm encounters some common misconceptions.

The first is that these specialty pharmacies are more expensive for payers and patients. “Health system specialty pharmacies generally accept the same reimbursement rates as other specialty pharmacies, including those owned by PBMs and health plans,” he maintains. “And clinic-based programs help make specialty medication therapies more affordable for patients by securing financial assistance from patient advocacy groups, drug manufacturers and other organizations.”

Another is that such specialty pharmacies are not as good at improving patient outcomes. Counters Zappa, “health systems with clinic-based specialty pharmacies are well-positioned to enhance outcomes compared to external specialty pharmacies. This is because health system specialty pharmacies are uniquely able to (1) coordinate communication between patients, providers and specialty pharmacy team members, and (2) manage patients’ care holistically by embedding pharmacists and pharmacy liaisons into care teams and combining pharmacy dispense data with patients’ medical records.”

A third misperception is that health system specialty pharmacies are unable to access payer contracts and limited-distribution drugs. While this may be one of the biggest challenges for these entities, “it is possible for health systems to access payer contracts and limited-distribution drugs. However, doing so requires thoughtful planning and ongoing execution.…Health systems can overcome this barrier by demonstrating outcomes improvements and developing and executing a tailored strategy.”

Contact Zappa through Savannah Matthews at smatthews@mergeworld.com.

by Angela Maas


 

In addition, with a clinic-based approach, patients can get more coordinated care. “Pharmacists and pharmacy liaisons work directly alongside doctors, nurses and other health system team members,” he says. This helps streamline communication among all the health care professionals, “allowing the health system to provide the highest level of clinical care.”

Health systems with an on-site specialty pharmacy get can a total patient profile, allowing them to “holistically understand their patients’ care,” Zappa contends. “An in-house program allows hospitals to merge pharmacy dispense data with patients’ medical records. This means providers have visibility into whether or not patients are picking up and refilling prescriptions — information that can be difficult to track down when working with an external pharmacy.”

Increased revenue is another advantage, he says. “A specialty pharmacy service line can make pharmacy a revenue-generating department instead of a cost center. Health systems participating in the 340B drug pricing program significantly benefit from bringing specialty pharmacy services in-house. Depending on a health system’s 340B structure, a program can create a multimillion-dollar revenue stream.”

That revenue, Krogh says, can be reinvested “in programs that allow us to extend care and offer more comprehensive services to underserved customers in our community.” He explains that “offering specialty pharmacy services helps us achieve our mission. That’s why specialty pharmacy is now one of our organization’s five strategic priorities.”

But with all the advantages, some challenges still exist. “Gaining access to payer networks and limited-distribution drugs was a major challenge before partnering with Trellis Rx,” says Krogh (see box, p. 4). When the system was looking to expand the program, it faced the issue of “getting the resources we needed to grow. It’s very difficult for pharmacy leaders to ask their health system’s executives to invest more in a program prerevenue, but those resources are critical to growth. Trellis Rx eliminated this challenge — they hire and manage the specialty pharmacy team, though we have a lot of control over this process.”

Asked what advice he would give to a health system considering implementing a specialty pharmacy, Krogh replies, “consider what kind of support you will need to be successful. Are you looking for a consultant, or are you looking for a partner that will fully implement a specialty pharmacy for you? Ensure you understand the different options and the amount of resources needed for each option. Choosing the appropriate partner is the most important step to ensure you meet the needs of your customers and your business. Leverage at-risk share and accountable care contracts. Keeping more of a patient’s care in-house through expanded specialty pharmacy offerings aligns with and helps supports care models being built to support customers covered on these at-risk plans.”

Zappa recommends that when health systems are trying to decide whether to self-develop their own specialty pharmacy versus partnering with a specialty pharmacy services firm, that they evaluate their organization first. Specific needs, he says, include organizational capabilities — “risk tolerance, access to start-up funding, a collaborative culture with strong cross-functional partnership, and staffing and recruiting competency” — as well as certain pharmacy competencies: “specialty pharmacy expertise, an integrated technology solution, specialty physician practice structure and leadership, a current retail network and a dedicated pharmacy leader to oversee the program.”

According to Zappa, “a specialty pharmacy initiative must be an enterprise effort, not a pharmacy program. As a result, health systems need both organizational capabilities as well as pharmacy-specific ones to succeed. A lack of necessary pharmacy-specific and organizational competencies can delay or, worse, inhibit a program’s success. It may also cause health systems to miss opportunities to enhance clinical outcomes and improve patients’ experiences with their brands.”

Contact Krogh and Zappa through Savannah Matthews at smatthews@mergeworld.com.

by Angela Maas

 

IL-17 Use in Psoriasis Grows As Adherence, Outcomes Rise

For many years, the psoriasis treatment landscape was dominated by tumor necrosis factor (TNF) inhibitors. But with the FDA’s approval of three interleukin-17 (IL-17) inhibitors — as well as other drugs with different mechanisms of action — for the condition, those therapies are becoming more common among treatment regimens. An AllianceRx Walgreens Prime study shows that not only are people switching to IL-17s from another biologic, but many are starting on them as their initial biologic. Patients who switched had better adherence to treatment, and almost half reported that their symptoms were better on an IL-17 inhibitor.

The first IL-17 inhibitor on the U.S. market was Cosentyx (secukinumab) from Novartis Pharmaceuticals Corp., which the FDA approved for plaque psoriasis Jan. 21, 2015. The next therapy was Taltz (ixekizumab) from Eli Lilly and Co., approved for plaque psoriasis March 22, 2016. Then on Feb. 15, 2017, the agency approved Siliq (brodalumab) from Ortho Dermatologics, a division of Bausch Health Companies Inc.

Researchers examined pharmacy records from a national specialty pharmacy database to find people starting on an IL-17 from January 2016 through December 2017. They also looked at the members’ biologic regimens over the previous 12 months. Members were followed for 180 days after initiating on an IL-17.

A study sample of 5,215 members showed that 2,218, or 42.5%, switched from a prior biologic, while 2,997, or 57.5%, started on an IL-17 as their first psoriasis biologic.

Among those who started their biologic regimens on an IL-17 inhibitor, 2,266 started on Cosentyx, followed by 725 who initiated on Taltz and six who started on Siliq.

Among those members who switched to an IL-17:

✦ 793 switched from AbbVie Inc.’s Humira (adalimumab).

✦ 425 switched from Johnson and Johnson unit Janssen Biotech Inc.’s Stelara (ustekinumab).

✦ 821 switched from Amgen Inc.’s Enbrel (etanercept).

✦ 179 switched from another medication.

The IL-17 inhibitor that patients most often switched to was Cosentyx, dispensed to 1,705, or 76.2%, of patients. Next was Taltz, to which 511, or 23.7%, of people switched. Only two people moved to Siliq.

When researchers asked patients why they switched to an IL-17, the most common reason was that the prior therapy had been ineffective, cited by 64.7%. The next most common response was that they were uncertain why they had switched, cited by 8%. Other reasons included side effects, preference, drug interaction, lab abnormalities, inconvenience and administration.

Researchers also examined 180-day adherence outcomes among members who switched to an IL-17 inhibitor from another biologic, as determined by proportion of days covered (PDC). The mean PDC increase after moving to an IL-17 was 6.4%. An 8.4% increase in adherence also was seen after people switched to an IL-17 inhibitor. Patients who were receiving care from a rheumatologist also had better adherence than those treated by other non-dermatology providers.

Among those moving to an IL-17, 45.7% said their outcomes were better, 26.5% said they were the same, 5.3% said they were worse, and 22.6% said they were inconsistent.

Results of the study were presented at the 2019 National Association of Specialty Pharmacy’s (NASP) seventh annual meeting, which was held in Washington, D.C., from Sept. 9 through 12.

According to Renee Baiano, Pharm.D., clinical program manager at AllianceRx Walgreens Prime and the lead author of the poster, the main takeaway for payers is that “by [the] last quarter of 2017, IL-17 inhibitors may have gained clinical acceptance in the treatment of psoriasis, given the increase in patients prescribed as their first biologic.” She adds that “it is important for payers to be aware they may see more of their members being prescribed IL-17 inhibitors and will need to determine the appropriate placement of these newer agents within their formulary.”

Baiano says the slow uptake for Siliq — which didn’t launch until July 27, 2017, almost five months before the close of the study period — could be due to a few factors: First, it’s indicated for people “who have failed to respond or have lost response to other systemic therapies.” Cosentyx and Taltz both are approved as first-line treatments. Second, Siliq is available only through a Risk Evaluation and Mitigation Strategy known as the SILIQ REMS Program. That means “health care providers and pharmacies must be registered in this program in order to prescribe and dispense Siliq; patients must also sign a Prescriber-Patient Agreement Form before receiving Siliq,” she explains. And third, the therapy was the most recent IL-17 to gain FDA approval.

Findings Reinforce Ones of Earlier Study

AllianceRx Walgreens Prime also presented a study on members switching to Cosentyx and Taltz at the 2018 NASP annual meeting. That study showed that providers may be comfortable prescribing one of the drugs as a first-line biologic. Asked how the newer findings relate to that study, Baiano says that they “support or reinforce the data previously presented. In the newer poster, we were able to augment the prior poster with more data. This allowed for a better analysis of the utilization patterns of the IL-17 medications included in the study.”

According to Baiano, people with psoriasis may switch biologics due to efficacy, safety and tolerability. She says that the side effect profile of the IL-17s is similar to other biologics for psoriasis.

As far as the improved adherence outcomes after switching, she says those “could possibly be attributed to patients experiencing improved outcomes (as 45.7% of patients reported they felt better for at least two consecutive months following the start of their IL-17 inhibitor). Favorable dosing frequency (once or twice monthly) could also be a factor.”

The study did not evaluate the effect of provider specialty on adherence, Baiano tells AIS Health, but “a potential reason a provider specialty can impact adherence may be due to having more experience in treating patients with a specific illness (e.g., psoriasis). This could lead to proactive education of the patient on the importance of adherence at the initiation of therapy. This proactive provider education may also be reinforced through a specialty pharmacy specializing in the management of psoriasis patients. The complementary support provided by both the provider and the specialty pharmacy may lead to improved adherence. This is an interesting hypothesis that will require research to validate.”

Contact Baiano through Adrienne Foley at adrienne.foley@alliancerxwp.com.

by Angela Maas

This story was reprinted from AIS Health’s monthly publication RADAR on Specialty Pharmacy. Visit https://aishealth.com/product/specialty-pharmacy.

CVS, Express Scripts, OptumRx Unveil 2020 Formulary Changes and Exclusions

October 28, 2019

The largest PBMs are taking very different approaches to building their 2020 formularies, including maximizing rebates, focusing on multi-source brand exclusions and removing products that have experienced hyperinflation, benefits consultants say.

Express Scripts Holding Co. says it will exclude more than 100 brand medications in its 2020 National Preferred Formulary. CVS Caremark, which says it’s focusing on brands that have experienced hyperinflation, will exclude more than 30 medications plus three continuous glucose monitors.

The largest PBMs are taking very different approaches to building their 2020 formularies, including maximizing rebates, focusing on multi-source brand exclusions and removing products that have experienced hyperinflation, benefits consultants say.

Express Scripts Holding Co. says it will exclude more than 100 brand medications in its 2020 National Preferred Formulary. CVS Caremark, which says it’s focusing on brands that have experienced hyperinflation, will exclude more than 30 medications plus three continuous glucose monitors. And UnitedHealth Group PBM OptumRx, which discussed changes to its formulary in a recent webinar, will exclude several popular medications for asthma, fibromyalgia and contraception.

“We’re finding big differentiators from formulary to formulary,” Brian Anderson, a principal with Milliman, Inc., tells AIS Health. “Some PBMs focus on low cost and some PBMs focus on low net cost, and the low net cost is the high rebate strategy — you pay more for a drug, but you get a higher rebate. In addition, another factor could be aligning their purchasing strategies for their pharmacies to the formulary alignment to ensure financial success across the board.”

“Multi-source brand exclusions are a big item,” Anderson says. “In the past they would use tiers. Now they [the brands] are excluded. They’re taking a harder-line approach on these items — all PBMs are doing that.”

For example, as part of the push to focus on multi-source brand exclusions, OptumRx excluded the popular medication Lyrica (pregabalin), used for fibromyalgia, nerve and muscle pain. It will substitute generic versions, Michael Hunter, Pharm. D., pharmacy management consultant at Milliman, Inc., tells AIS Health.

Changes to formulary status for drugs that are taken by millions of people can have an outsized effect, Anderson says. For example, OptumRx will exclude AbbVie Inc.’s branded thyroid replacement hormone Synthroid (levothyroxine) beginning in 2020.

“Synthroid is going to be one of the disruptors,” Anderson says. “PBMs typically cover multiple iterations” of thyroid hormone replacement, he says, but OptumRx is “now clarifying [coverage] and excluding Synthroid.” For 2019, Synthroid had been a Tier 3 formulary drug.

“This was one of the few [branded drugs] left that hadn’t been touched,” Hunter says. “From a pharmaceutical perspective, I know a lot of physicians and patients prefer the brand. The question is, will physicians and patients still be able to get medical exceptions?”

CVS Takes On ‘Hyperinflated’ Drugs

CVS Caremark says it’s focusing on blunting the impact of hyperinflated drugs, which it defines as “medications that are exponentially more expensive than readily available lower-cost alternatives, and whose price is not supported by evidence of greater clinical efficacy.” The PBM notes that more than 3,400 drugs boosted their prices in the first six months of 2019, and the average increase was five times the rate of inflation.

In 2018, CVS Caremark says, it was able to keep the impact of price growth to 3.1% despite drug price inflation of more than 25%. It achieved this by applying strategies such as hyperinflation drug removals, the company says.

In April, the PBM removed 1,000 mg metformin extended release tablets from its formulary. CVS Caremark says that medication cost an average of $617.17 for a 30-day supply, while substituting immediate release metformin costs $3.80 on average for a 30-day supply. This saves payers $613 per month, the PBM says.

CVS Caremark also removed chlorzoxazone tabs (250 mg), a muscle relaxant, and substituted cyclobenzaprine. Since chlorzoxazone costs $2,902.64 on average for a 30-day supply and cyclobenzaprine costs $1.76, the average savings from this strategy is $2,901, according to the company.

Drug Removals Cut Client Costs

“In 2018, clients aligned with our template formularies with drug removals spent $88.30 on average per 30-day supply compared to $102.58 for those on formularies without drug removals,” CVS Caremark says.

CVS Caremark’s hyperinflation strategy targets “generics that have significant price increases, potentially due to a limited supply chain,” Hunter says.

Hunter notes that PBMs evaluate their formularies each quarter, so “although there’s a lot of activity around the first of the year, they’re continually making adjustments and exclusions.” He adds that “these exclusion lists have been in place for several years now,” and payers have grown to anticipate them and expect them. “Some appreciate the due diligence of tight management,” he says, while others may get some pushback from plan members.

It’s also not unusual for PBMs to add back medications that they’ve removed, Anderson notes. In some cases, these decisions may be influenced by negative reactions they get from payers and members, he says. “You have to look at the disruption in addition to the savings, and make sure the performance aligns with the contract.”

Anderson adds, “the formulary historically is based on clinical effectiveness, but they’re now aligning clinical effectiveness with financials.” This can involve various financial strategies, including rebates and mail order incentives, he says.

Still, payers are more focused on their specialty pharmaceutical spending — and its growth rate — than they are on their non-specialty formularies, Hunter says. Specialty pharmacy costs are taking up a rapidly increasing percentage of overall prescription budgets, and nearly two-thirds of the products expected to be launched over the next two years are specialty drugs.

“With several of the biosimilars on the market, I don’t see a consistent strategy — it differs from class to class,” Hunter says. In some cases the brand name product is excluded, while in others it is not, he says, adding that PBMs likely will solidify their strategies as more biosimilars come to market. “One of the big ones will be [a biosimilar for] Humira [adalimumab], but that’s not coming until 2023,” he says.

The FDA has approved four biosimilars for AbbVie Inc.’s blockbuster autoimmune product, but the first one won’t enter the market until early 2023.

by Jane Anderson

 

 

About Half of Payers Expect to Manage Beovu, Eylea at Parity

by Angela Maas

Earlier this month, the FDA approved Beovu (brolucizumab-dbll) from Novartis Pharmaceuticals Corp. for the treatment of neovascular (wet) age-related macular degeneration (AMD). The intravitreal injection will compete in a fairly crowded anti-vascular endothelial growth factor (anti-VEGF) market that is led by Eylea (aflibercept) from Regeneron Pharmaceuticals, Inc. Research from Zitter Insights shows that it’s likely the drugs will be managed at parity.

Novartis priced the new therapy at $1,850 per vial — the same per-dose price as Eylea.

Other anti-VEGFs for wet AMD include Lucentis (ranibizumab), from Genentech USA, Inc., a member of the Roche Group; Macugen (pegaptanib) from Bausch & Lomb Inc.; and off-label Avastin (bevacizumab) from Genentech USA, Inc., a Roche Group company.

For the Managed Care Biologics and Injectables Index: Q4 2018, Zitter surveyed pharmacy and therapeutics (P&T) committee members who work for 51 commercial payers with 139.8 million covered lives between Nov. 30, 2018, and Jan. 7, 2019. When asked about how they would manage Beovu and Eylea, 49% said they were more likely than unlikely or significantly likely to manage the two drugs at parity (see chart below).

Thirty-five percent said they were more likely than unlikely or significantly likely to start discussions with Regeneron to prefer Eylea over Beovu. These respondents said the average discount, including rebates, that they would need to prefer Eylea over Beovu is 29%. The 16% who said they were likely or significantly likely to prefer Beovu over Eylea said they would need a 27% discount to do so.

Sixteen percent said it was likely or significantly likely that they would prefer Beovu over other anti- VEGF agents besides Eylea. Of those, 73% said they were likely or significantly likely to prefer Beovu over Macugen, but only 23% said they were likely or significantly likely to prefer it over Lucentis and 9% said the same of Avastin.

Among 50 retinal specialists polled, 70% were likely or significantly likely to prescribe brolucizumab over Lucentis in wet AMD, and 60% said the same about brolucizumab over Eylea.

 

Reality Check: Psoriasis (PsO)

 

Coverage


Pharmacy Benefit

Under the pharmacy benefit, almost 74% of the lives under commercial formularies are covered with utilization management restrictions. Around 64% of the lives under Medicare pharmacy benefit formularies are not covered for at least one of the drugs.

 


Medical Benefit

Under the medical benefit, about 40% of the lives under commercial and health exchange policies are covered with utilization management restrictions. More than 24% of Medicare beneficiaries have access to the medications without restrictions.

 

 

Trends From AIS Health


FDA Approves Hadlima

In July 2019, the FDA approved Samsung Bioepis Co., Ltd.’s Hadlima (adalimumab-bwwd) for the treatment of plaque psoriasis, rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, adult Crohn’s disease and ulcerative colitis. It is the fourth biosimilar of AbbVie Inc.’s Humira (adalimumab) that the agency has approved. Merck & Co., Inc. will commercialize the drug in the U.S. It is expected to launch after June 30, 2023.

Subscribers to AIS’s RADAR on Specialty Pharmacy may read the in-depth article online


FDA Approves AbbVie’s Injectable Skyrizi

In April 2019, the FDA approved AbbVie Inc.’s injectable Skyrizi (risankizumab-rzaa) for the treatment of plaque psoriasis. AbbVie’s Hurima pen is one of the most advantaged therapies for the treatment of plaque psoriasis, holding preferred status for 9% of covered lives, which grows to 60% including prior authorization and step therapy.

Via AIS Health


Payers Specify Step Duration

As payers try to get a handle on the growing and costly array of biologics approved for psoriasis and other inflammatory conditions, some have begun stipulating the specific length of time patients need to be on a particular drug before they can step to the next drug. “It’s a growing restriction that we see in immunology,” says an industry expert. “There is a hierarchy in immunology, especially in plaque psoriasis, with so many products that are available.”

Subscribers to AIS’s RADAR on Specialty Pharmacy may read the in-depth article online

 

Key Findings


Market Events Drive Changes

In July 2019, the FDA approved Samsung Bioepis Co., Ltd.’s Hadlima (adalimumab-bwwd) for the treatment of plaque psoriasis, among other conditions. It is the fourth biosimilar of AbbVie Inc.’s Humira (adalimumab) that the agency has approved. In April 2019, the FDA approved AbbVie’s injectable Skyrizi (risankizumab-rzaa) for the treatment of plaque psoriasis.

Competitive Market Landscape

Manufacturers with franchises across inflammatory indications often hold contracting power and improved position, which is everything in this market. While a tumor necrosis factor (TNF) inhibitor is nearly always the first-line biologic after generics, there are situations where others (like Janus kinase inhibitors) have been placed on this tier. The entrance of interleukin inhibitors in recent years, with more on the way, means the desire to move past a TNF agent for better efficacy is something plans protect against and occasionally embrace. The sheer volume of products and manufacturers with products in this class, coupled with the relatively high number of possible patients, means that contracting competition is enormous.

Medical and Pharmacy Benefit Implications

Many products are covered under both the medical and pharmacy benefits, with even infusions covered under the pharmacy benefit. Cost sharing on the specialty tier is common with patient support available.