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)



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.



Manufacturers Must Address Challenges in Paying for, Showing Value of New Therapies

October 21, 2019

As innovative new therapies — many of them expensive one-time treatments — come onto the U.S. market, they are sparking a discussion around pharma reimbursement. With the drug pipeline full of many novel treatments, questions exist around whether traditional payment systems are appropriate for the products, and many experts maintain that new approaches are needed. In addition to making sure effective and efficient models are in place, drugmakers must be able to convey the value proposition of these new therapies.

As innovative new therapies — many of them expensive one-time treatments — come onto the U.S. market, they are sparking a discussion around pharma reimbursement. With the drug pipeline full of many novel treatments, questions exist around whether traditional payment systems are appropriate for the products, and many experts maintain that new approaches are needed. In addition to making sure effective and efficient models are in place, drugmakers must be able to convey the value proposition of these new therapies.

In May, the FDA approved gene therapy Zolgensma (onasemnogene abeparvovec-xioi) from AveXis, Inc., a Novartis AG unit, to treat spinal muscular atrophy (SMA) (SMA 7/1/19, p. 6). The cost for the one-time 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 (CAR-T) therapy Kymriah (tisagenlecleucel), first approved in August 2017, costs $475,000 or $373,000 depending on the type of cancer it’s used in; and Gilead Sciences, Inc. unit Kite Pharma, Inc.’s Yescarta (axicabtagene ciloleucel), approved in October 2017 to treat large B-cell lymphoma, costs $373,000.

These innovative therapies are not anomalies. Research from the IQVIA Institute for Human Data Science shows that almost 100 next-generation biotherapeutics that leverage 18 different approaches were in at least Phase II clinical trials in 2018 (see chart below). That total is almost a doubling of therapies since 2014.

Cigna Corp.’s Express Scripts PBM unveiled its Embarc Benefit Protection program through which plans pay per member per month for Luxturna and Zolgensma, and members have no out-of-pocket costs. Express Scripts is executing the model through coordination among its Accredo Specialty Pharmacy, CuraScript SD distributor and eviCore unit, which provides medical benefit management, to help offer comprehensive care.

“I do think that this is going to be something that employers will want to know more about,” says David Dross, managed pharmacy practice leader at the consulting firm Mercer.

Indeed, “employers are looking for solutions like that from their health plan partners and the PBMs,” says Steve Wojcik, vice president of public policy for the National Business Group on Health, which represents large, self-insured employers. Other companies also exploring possible approaches include CVS Health Corp. and its Aetna unit and Anthem, Inc. and its PBM, IngenioRx.

So far, deals struck between manufacturers and payers for the CAR-T and gene therapies have focused on outcomes-based deals and pay-over-time arrangements, although payers may turn to different approaches (see box, p. 7). For example, AveXis is offering two Zolgensma payment deals for payers: a five-year pay-over-time option that it is executing via Accredo, and a five-year outcomes-based deal. Cura- Script will be the sole distributor of the drug.

“As the market transitions to one based on value, there will need to be some connection between money paid and the outcomes provided,” says Jeremy Schafer, Pharm.D., senior vice president, director, access experience team at Precision for Value. “We are starting to see this in gene therapy and CAR-T agents already where outcomes agreements are providing discounts or refunds if the drugs don’t work. Payments over time may be an option as well to reduce up-front cost and improve affordability.”

Payments that are made over time, though, won’t work for drugs given on a chronic basis, says Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates: “That’s intuitively obvious by thinking of payments spread out over X number of years. The drug must be administered chronically, so the payer and patient are faced with new and multiple streams of extended payments, one for each drug administration, that pile up over time, never get fully paid off and bury both parties both financially and administratively. The manufacturer would see the mirror image of this.”

But with these payment approaches, Wojcik says, “just financing the medications and the therapies doesn’t really get at the real issue, which is the broken pricing model.”

Indeed, contends Winston Wong, Pharm.D., president of W-Squared Group, “spreading payments across a period of time does not make the product more affordable. It merely spreads out the liability, but the liability is not lessened. In some cases, the liability is higher since financing interest may be added.

“The only way to make any product more affordable to the payer is to lower the cost,” he continues, which may be accomplished via a traditional rebate or a value-based contract. “Under a value-based contract, if the product produces the clinical benefit as anticipated, then the full cost of the product is paid. If the product does not produce the full clinical benefit, then a lower cost is paid, if anything is paid at all. In some proposals, full refunds have been offered in treatment failures. In the end, if the product provides its full clinical benefit, then there is no change to the affordability. What is saved is the cost of ineffectiveness. In the end, we are willing to pay for effectiveness, but does that make the product more affordable? In my mind, no.”

Wong maintains that traditional rebating doesn’t make a product more affordable either: “Yes, we can negotiate X% rebate on a very expensive product. Yes, in our minds, we can link the rebate to a lower cost, but at the end of the day, does it make the product more affordable? Most likely not. This is also assuming that everything is transparent in terms of rebate tracking as well. Reality tells us that rebating does less to make a product more affordable.…We know that the rebate strategy by a manufacturer is already included in the overall cost of the medication so that the net profit margin at the end is achieved. If the rebate has to increase, then the cost of the medication increases. The interesting case study here is to see what would happen if the ability for CMS to negotiate rebates is passed. CMS might see reduced cost, but the rest will most likely see higher costs.”

It may be easier said than done to not only implement these reimbursement models but also have them operate effectively.

When it comes to oncology, outcomes-based arrangements are “theoretically possible, but the administration of outcomes arrangements, given the numbers of patients and variety of cancers, can be daunting,” says Ira Studin, principal at Stellar Managed Care Consulting, LLC. Also, he points out, manufacturers and payers must agree on outcome standards with such deals, “and that is not an easy thing to do.”

Schafer agrees. “Outcomes must be measurable and reportable. For some conditions, an outcomes agreement is relatively simple. For example, when paying for cholesterol drugs, the goal is to reduce heart attack or stroke. Both heart attack and stroke are objective and appear in claims data at the payer. However, for an oncology drug, disease progression may be the outcome. Disease progression can be somewhat subjective and does not appear in claims data.”

“The big challenges are largely around transparency of prices/costs and having the tools to effectively analyze the cost of care and measuring outcomes,” Ashraf Shehata, national sector leader for KPMG’s Healthcare & Life Sciences practice, tells AIS Health. “This takes a great deal of collaboration between the payers, providers, pharma and specialty pharmacy. Data and analytic capabilities can get people on the same page about what to measure, and that needs to feed into the organization that negotiates contracts.”

Another challenge, says Schafer, is that “outcomes arrangements may require payers to marry medical and pharmacy claims data, which can be difficult. The remedy will be the continued integration of health systems and payers along with improvements in technology to better capture data.”

According to Lisa Kennedy, Ph.D., chief economist and managing principal at Innopiphany LLC, “health care isn’t yet ‘digitally literate’ enough to measure the outcomes required for these payments over the length of time required as patients move from payer to payer. Take gene therapy — we don’t know the durability of some of these treatments — what do you do when a patient’s treatment gets financed up-front to secure the treatment and then moves to another insurer? Does the original insurer continue to make the payment? The new insurer?”

Eric Althoff, a Novartis spokesperson, clarifies that the Zolgensma “pay-over-time model provides payers with a choice to pay for Zolgensma over a period of up to five years regardless of patient response.” As far as what would happen if a patient changes health insurers during that time, he tells AIS Health, “we don’t expect plan switching to be a significant issue for Zolgensma patients, as research shows that families of children with rare diseases remain on commercial health plans longer than average.” AveXis sponsored that research, which was published in the February 2019 issue of the Journal of Managed Care & Specialty Pharmacy. But on the occasion that switching does happen, “currently, there is no portability for the payment installments — so the original payer will be responsible for the cost of treatment, whether or not they retain the patient, for the duration of the payment plan.”

But what about a situation where a payer reimburses for the treatment up front and then will need to be reimbursed at some point based on a patient’s outcomes? Wong tells AIS Health that for most contracts today, the main way that refunds are administered is “via a modified rebate provided during the next measurement period. Hence, the refund is realized over a period of time. There is difficulty in tracking the refund, as well as the refunds being timely. Payers will then require the sophistication in their systems to track the refund back to the payer source, be it the insurer in a fully insured situation or an employer in a self-funded situation. Also, in both the fully insured and self-insured markets, the payer will need to process a refund back to the patient for their share of the cost represented by the co-insurance. In most cases, patients would have already been required to pay the required co-insurance portion of the cost before receiving services.

“Until these logistical issues are worked out to a smooth-running process, then we are stuck with the negotiated discount off list price,” he says.

This model also poses risk for manufacturers in terms of revenue generation, points out Schafer.

“Instead of receiving the money up front, the manufacturer is getting smaller payments and may be bearing more risk if the drug stops working or a payer refuses subsequent payments. For providers, any payment system used by the payer will impact reimbursement to the provider. A provider or health system cannot pay $1 million for a drug up front and then be reimbursed over five years at $200,000 per year and stay viable.”

An additional provider risk is seen with the CAR-Ts. People must undergo chemotherapy before treatment and then must remain in the hospital for a period afterwards due to the risk of suffering a potentially fatal side effect known as cytokine release syndrome. Treatment of the condition differs depending on its severity, and in severe or life-threatening cases, the administration of Roche Group subsidiary Genentech, Inc.’s Actemra/RoActemra (tocilizumab) is recommended, which itself is not inexpensive. Additional provider costs “could be in the hundreds of thousands on top of the treatment itself,” points out Kennedy. “How is this reimbursed? Also, how can a provider take on the economic risk with securing such an expensive treatment? It presents some tricky financial challenges that require careful navigation to manage risk for all parties.”


What Are Other Reimbursement Models for Novel New Therapies?

While most reimbursement approaches for costly treatments have focused on outcomes-based deals and pay-over-time arrangements, other approaches may be possible but have limitations as well, particularly when it comes to oncology.

“Some opportunities may arise in bundling payments for the medicine with other services to address the condition,” says Ashraf Shehata, national sector leader for KPMG’s Healthcare & Life Sciences practice.

A subscription model, as seen with some Medicaid plans for hepatitis C drugs (see story, p. 1), “is innovative, but oncology does not lend itself to the concentration of lives that model requires” with so many different cancers and treatment options, says Ira Studin, principal at Stellar Managed Care Consulting, LLC. He tells AIS Health that indication-specific arrangements “are probably the cleanest to implement” with conditions that have at least two treatment options. “But the brute fact is that until a cancer product faces competition, the manufacturer has little reason to contract under any payment model, and the health plan has little leverage to enforce one.”

“Today, the costs of end-stage renal disease and of certain other catastrophic diseases are nationalized for those who meet eligibility criteria,” points out Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates. The Social Security Administration’s Compassionate Allowances program helps reduce the time it takes to identify people who meet its standards for disability benefits, qualifying them for the Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) programs. People approved for SSDI can receive Medicare benefits two years after approval, while SSI recipients receive Medicaid benefits immediately in most states.

“In order to keep self-insured employers from experiencing unaffordable health benefit costs and to stabilize the health insurance system, both with respect to the growing burden of the increasing number of super high-cost prescription medications, certain categories of patients’ costs should be nationalized — perhaps via extension of the ‘compassionate allowance,’” says Rubinstein. “Certainly very large (not $1,000s/year, but surely over $100,000s/year) recurring chronic drug costs should qualify patients for compassionate allowance.

“It may be possible to manage cost for huge one-time curative therapy through the private sector, via annuity, pooling or bond payment mechanisms, with outcome guarantees,” he continues. “In itself nationalizing patients with huge recurring chronic drug costs is not the same as controlling those costs. But by increasing the federal government’s role in payment for those with huge recurring chronic drug costs, the likelihood increases that the government will implement price control mechanisms for those products, as is commonly done in other industrialized nations and as was recently proposed” by House Speaker Nancy Pelosi (D-Calif.) (SMA 10/7/19, p. 1).

Contact Rubinstein at elan.b.rubinstein@gmail.com, Shehata through Bill Borden at wborden@kpmg.com and Studin at istudin@stellarmc.com.

by Angela Maas


And what if that patient changes insurers during that time? “Even if one insurer has an adequate system, there is no guarantee the next one will, nor that the systems will be compatible, nor that these insurers will agree on the terms of the handoff of payments due and outcome guarantees made,” says Rubinstein. So if treatment was initiated under one insurer but failed under another, “does the pharmaceutical manufacturer make good on its guarantee (assuming a partial refund) to that last patient insurer? Will that last patient insurer contractually agree to reimburse the prior two insurers on a failed outcome guarantee paid by the manufacturer, and if so, on what basis? And what if the manufacturer reneges on the guarantee payment — is the third insurer held harmless by the other two insurers, even though the product failed its guarantee?”

Wong maintains that systems are not in place to track and process installment billing, as well as to track patients. “The inability to track members after they have left the health plan will be a major obstacle to overcome for any value-based agreement where payment will be depended upon continued efficacy of the therapy.”

Studin agrees. “A snapshot of this point in time suggests the science is more advanced than the business,” he tells AIS Health. Asked what entities should be responsible for tracking patients, he replies, “the need for scale, customization and precision suggests an entirely new industry entity may need to evolve.”

According to Shehata, “specialty pharmacies, health care payers, providers and drugmakers can track how patients respond through electronic health records or claims data.” Such information, particularly with highly complex conditions, he says, can show “patterns of care, medication adherence and outcomes. The bigger issue is around coordination of care, and the medical specialist, a primary care physician and the pharmacy need to be on the same page.”

With Zolgensma, Jennifer Luddy, an Express Scripts spokesperson, tells AIS Health that since Accredo is the dispensing pharmacy, it can track a patient over time. “In this set-up, Accredo pays the drugmaker, and then the plan reimburses Accredo per the contract.”

As payers grapple with the challenges posed by these therapies, manufacturers need to make sure they convey the value proposition of the products, which can be done in various ways. “Payers are most interested in trial data that demonstrates clinical benefit,” says Studin. “For oncology, that includes response rate, complete response, progression free survival, event free survival, overall survival and remission.”

“The clinical story needs to resonate first,” agrees Schafer. “Manufacturers should focus on deficiencies with the prior standard of care and how the new therapy improves upon it. Manufacturers with data on overall survival impact or superiority to current agents via comparative studies should lead with these elements. A net decrease in total cost of care is often not achievable with new cancer drugs, but manufacturers should provide data on how a new drug helps avoid use of supportive care drugs, potentially reduces health resource utilization or helps patients return to work.”

“We speak to payers a lot about this, and what they’ve articulated to us is that they are looking for a fairly priced product with good demonstrated clinical data with well-designed studies and ideally a strong associated biomarker that predicts response,” Kennedy tells AIS Health. “Payers also frequently state the need for non-manufacturer health economic analyses and supporting studies (outside of clinical trials). Moreover, payers are also looking for information that is directly relevant to their own beneficiary population.” She notes that payers are looking to use more alternative payment models, particularly ones with two-sided risk for providers, to address rising health care costs, as seen with CMS’s Oncology Care Model (SMA 7/15,19, p. 1). Such models, she says, “could potentially be pretty disruptive in oncology.”

According to Shehata, “the issue of value creates some hard questions about comparative effectiveness of these treatments. When it comes to cancer, it is a matter of looking at some factors outside of economics, such as quality of life and how the condition is responding to treatment. With cardiology, you can have a pretty good sense about how a patient will respond after a stent is used, and there is a set of medications to use after the procedure. With orthopedics, a knee or hip replacement has a fairly defined set of protocols around treatment and helping with recovery. With cancer, some tumors will shrink under a course of treatment or some won’t respond to treatment, and the doctor and patient are battling time to find treatments that are effective.”

“Payers are looking for more than an incremental benefit,” says Wong. As an example, he points to Spinraza (nusinersen), which was developed by Ionis Pharmaceuticals, Inc. and Biogen and licensed to Biogen. It’s approved to treat SMA in pediatric and adult patients; its first-year price is $750,000, and subsequent years cost $375,000. Four types of SMA exist, with the deadliest being Type 1, which is usually evident before a child is six months old.

With Type 1 SMA, “there is evidence of significant improvements in QoL [i.e., quality of life] and motor function as a result of treatment with Spinraza and Zolgensma. That improvement in QoL and motor function is not as clearly demonstrated in the Type III/IV and pre-symptomatic patients. It is in this subpopulation that we need to see more definitive evidence of improvement in QoL and motor function through more analysis of the natural history of the disease state and impact of treatment. At this point in time, we just simply do not have the data.

“In some respects,” Wong continues,” we are in need of more real-world data and real-world experience. The issue we face here is that RWD and RWE is really still a concept and not well defined in my mind, even though the FDA has endorsed the concept,” he tells AIS Health.

Manufacturers should ensure they are providing payers with the data they actually want as opposed to what pharma thinks payers want. This can be done, says Studin, by getting payer feedback “before finalizing endpoints for pivotal Phase III trials.” Adds Schafer, “It is easier and more scientifically accurate to gather data on planned endpoints rather than going back retrospectively for the data, if even possible, after the trial is done.”

Wong observes that “manufacturers are still not really opening up pre-launch due to FDA guidelines. I believe the FDA has opened up about this topic, but manufacturers are still interpreting what they can and cannot talk about” (SMA 8/18, p. 1).

According to Kennedy, “besides all the excellent things that manufacturers already do, there is the increased opportunity to develop and use data lakes [i.e., repositories of raw data] for continued understanding of treatment durability, subgroups, quality of life and patient-reported data, adherence, biomarkers, etc. Clinical trials are only the start, and given all the advances (mainly we see advances in other industries before health care) with data, there is a huge opportunity to work with payers in real-world evidence analysis.”

Contact Kennedy at lisa.kennedy@epiphanomics.co, Rubinstein at elan.b.rubinstein@gmail.com, Schafer through Tess Rollano at trollano@coynepr.com, Shehata through Bill Borden at wborden@kpmg.com, Studin at istudin@stellarmc.com and Wong at w2sqgroup@gmail.com.

by Angela Maas


Louisiana Took Long Path to Modified Subscription Model for Hepatitis C Drugs

As of July, Louisiana has been able to treat hundreds of people who were waiting to receive a cure for hepatitis C thanks to an innovative “modified subscription model” in which the state pays a fixed amount to a manufacturer for a drug, up to a spending cap, and in return gets unlimited access to the therapy for Medicaid beneficiaries.

But the road to get there was long and difficult, according to Rebekah Gee, M.D., secretary of the Louisiana Department of Health, who, during a July 22 event hosted by the Brookings Institution, detailed the challenges she faced in trying to get a costly curative therapy to more people while facing down a $2 billion budget deficit.

Along the way, Gee noted, “we were told ‘No’ at least 50 times from a variety of people, whether it was the industry, or policymakers or individuals at the CDC…because it had never been done before.”

Back in 2016, Gee’s boss, Democratic Gov. John Bel Edwards, took office and inherited a state budget “in shambles,” Gee said, explaining that Louisiana was then facing the prospect of making “draconian” cuts to vital programs. At the same time, Gee received letters from CMS and patient advocates urging her to provide more drugs to hepatitis C patients — something the state couldn’t afford. (When the first breakthrough hepatitis C drug, Gilead Sciences, Inc.’s Sovaldi (sofosbuvir), debuted in 2014, it cost about $84,000 for a 12-week course of treatment.)

So Gee decided the state had to find a creative way to pay for the life-saving therapies.

“The pitch was always this: It was never about a slightly better price or a better deal — it was that here we are in this country…with a disease that kills tens of thousands of people; it is a leading infectious disease killer of our time; and through in large part the innovation of Americans, our research institutions, we have a cure,” she said. “And it’s unacceptable that in this day and age we cannot provide it, and we have people suffering, bleeding internally and dying unnecessarily because of the price.”

After much deliberation, Gee and Louisiana officials got together with other governors to ask the pharmaceutical industry and payers what they thought would work — and critically, came across a subscription model developed by the National Academy of Sciences, she said. Under a true subscription model, a state negotiates with a pharmaceutical manufacturer on an up-front, lump sum for an unlimited number of treatments, thus increasing access to the drug while offering the manufacturer more revenue, according to Neeraj Sood, a professor at the University of Southern California, who helped develop the model and explained its components in a presentation at the Brookings event.

Ultimately, the Louisiana Department of Health issued a formal solicitation for offers on Jan. 10, seeking to develop a public/private partnership with a hepatitis C drug manufacturer that made such a subscription model a reality. In its response to the state’s solicitation, Asegua Therapeutics LLC, a subsidiary of Gilead, beat out Merck & Co., Inc. and AbbVie Inc., which also responded, AIS Health has reported.

Initially, Asegua envisioned its pact with Louisiana as a true subscription model, “which we couldn’t do because I can’t write a check to a company,” Gee said. Louisiana also didn’t have time to get a Medicaid waiver — as its governor would be up for re-election, and there was a “moral imperative” to give patients access to hepatitis C cures — so it looked at what it could do under existing policy, she said.

Therefore, the state settled on a modified subscription model that makes use of supplemental rebates, which are exempt from Medicaid’s “best price” rule requiring manufacturers to offer the lowest price for a drug they negotiate with any other purchaser to all states in the Medicaid program.

Under Louisiana’s pact with Asegua, the state will have unrestricted access to the authorized generic of Epclusa (sofosbuvir/velpatasvir tablets) at a fixed, negotiated price — which the state has not disclosed — until a predetermined spending cap is reached, after which the state receives the drug free of charge. The state’s proposal calls for its annual spending on the drug not to exceed what it spent for the fiscal year that ended June 30, 2018: $30 million for Medicaid enrollees and $5 million for its incarcerated population.

Model Poses Some Risk to Pharma Firm

From Gilead’s perspective, meanwhile, the challenge was how to provide a predictable expenditure for Louisiana and spread the budget impact of paying for the authorized Epclusa generic over time — while still providing an incentive for the state to continue finding patients and curing them, said Rekha Ramesh, the firm’s executive director of public policy.

“We believe in what Louisiana is doing, and it does pose a bit of risk on behalf of the company,” she said of the model that they decided on, “but we’ve tried to mitigate that, obviously, as we’ve had conversations.”

One aspect of Louisiana’s model that is helpful in this regard is the state’s commitment to treat a certain number of people with hepatitis C, Sood noted — which allows the drug manufacturer to be more confident that it can expect a certain amount of revenue in the future. (The state’s Department of Health has said its goal is to treat at least 31,000 people with hepatitis C by the end of 2024.)

In addition, there’s no price barrier to accessing the drug beyond the hard spending cap, Sood said, which encourages the state to invest in linking more hepatitis C patients to care.

For Gee’s part, she said she hopes Louisiana’s model spreads elsewhere, asserting that “success for us is replication.”

Indeed, Washington won approval in June from CMS for a state-plan amendment that allows it to negotiate under a subscription model with manufacturers of hepatitis C drugs. The state is working with AbbVie on its model.

For states that want to successfully replicate what Louisiana has done, not only do they need a solid partnership with CMS, but they also must understand that price is not the only barrier to expanding treatment, Sood said.

“Even if you make the price zero, you have to figure out how to test everyone, link them to care, make sure they adhere to therapy — and that’s no small task,” he said.

It’s also important to note that such a model cannot work in a non-Medicaid market under current laws because it would change the Medicaid best price, Sood said. “So if United[Health Group] made a deal, what would happen is, United will pay up front to a company and after that the price of the drug is going to be zero, and Medicaid best price would say, ‘All Medicaid programs should get the price to be equal to zero,’” he explained. To fix that, he advocated for changing the statute so that innovative models like Louisiana’s receive an exception.

The model can work for other drugs, though, if there is an access problem with the drug due to affordability, if the scope for moral hazard is minimal — meaning it won’t be misused or overprescribed if the price of the drug drops to zero — and if there is some competition among manufacturers producing the drug, according to Sood.

“One example of where all these conditions are kind of met is insulin — it’s been in the news, insulin prices are rising, a lot of people can’t afford it, and there are several firms competing in the market,” he said.

Cures ‘Are Coming Faster Than Before’

To Rena Conti, an associate professor of markets, public policy and law at Boston University, it’s going to be necessary to find innovative ways to pay for expensive, curative medicines. “We are living in an unprecedented time in American medicine,” she said. “The cures are coming faster than before.”

Many of the diseases being targeted by pharma companies — such as hemophilia, sickle cell anemia and mental illnesses — affect working-age people and children, who are largely insured either by the state (through Medicaid) or employer-based insurance, she explained. And unlike the federal government, states and employer plans don’t have the luxury of expanding their budgets without asking taxpayers to foot the bill or raising premiums. “Instead, they really do have to figure out where that money is going to come from,” she said.

View a replay of the Brookings Institution event at https://brook.gs/2Jw7w3N.

by Leslie Small

This story was reprinted from AIS Health’s biweekly publication RADAR on Drug Benefits. For more information, visit https://aishealth.com/product/drug-benefits.


Reality Check: Acute Myeloid Leukemia


Our Point of View

Since April 2017, the FDA has approved eight therapies for acute myeloid leukemia (AML). Most of the treatments target a specific biomarker, so it’s critical that people diagnosed with the condition undergo genetic testing to determine whether they fall into a particular patient subgroup. “AML is associated with characteristic nonrandom chromosomal abnormalities and genetic defects that are used to classify AML and that are associated with response to therapy and prognosis,” says Winston Wong, Pharm.D., president of W-Squared Group. “Continued research into the genomic aspect of AML is resulting in a constant redefining of risk stratification and development of targeted therapies. At this time, the new targeted therapies are being given in addition to the aggressive chemotherapy when the specific genomic mutation is present. There is no doubt that as we continue to gain insight to the presence of other genomic mutations, we can expect to see further refinement of the treatment options, as well as additional novel targeted treatment options developed.”



Pharmacy Benefit

Under the pharmacy benefit, almost 60% of the lives under commercial formularies are covered with utilization management restrictions. Around 20% of the lives under health exchange and Medicare pharmacy benefit formularies are not covered for at least one of the drugs.

Medical Benefit

Only Mylotarg and Vyxeos are covered under the medical benefit. About 44% of the lives under commercial policies are covered with utilization management restrictions, while more than 83% of Medicare beneficiaries have access to the medications without restrictions.


AIS Health’s View

Multiple policies exist on the pharmacy side, particularly for the newer targeted therapies. Payers want to make sure these drugs are given to the appropriate patients at the appropriate point in therapy. “Payers often require prior authorization of these therapies due to safety, concern for off-label usage and cost,” says Mesfin Tegenu, R.Ph., president of PerformRx, LLC. A variety of drugs are used offlabel for certain patient populations, he notes. In addition, says Wong, “past disease history also plays a part in treatment decisions. Hence, utilization management defaults to the usual confirmation of the indicated use, e.g., an FLT3 inhibitor in the presence of an FLT3 mutation. In cases where off-label utilization is requested, management consists of confirmation that there is adequate medical evidence [about] the benefit of the off-label use in this indication, e.g., Nexavar in the presence of an FLT3 mutation.”


Trends From AIS Health

AML Therapy Class Has Seen Boom Over Past Couple of Years

The FDA has approved nearly 10 therapies for acute myeloid leukemia (AML) over the past couple of years. Because most of them target a specific biomarker, it’s critical that people diagnosed with the condition undergo genetic testing to determine whether they fall into a particular patient subgroup.

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


FDA Approved Astellas Pharma Inc.’s Xospata

The FDA approved Astellas Pharma Inc.’s Xospata (gilteritinib) for the treatment of adults with relapsed or refractory AML with an FLT3 mutation as detected by an FDA-approved test. The agency gave the drug priority review, as well as orphan drug and fast track designations. Website BioCentury reports that the tablet’s 30-day wholesale acquisition cost is $22,500.

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

FDA Issued Accelerated Approval to Venclexta

The FDA gave accelerated approval to Venclexta (venetoclax) in combination with a hypomethylating agent or low-dose cytarabine for the treatment of people with newly diagnosed acute myeloid leukemia who are at least 75 years old or for those ineligible for intensive induction chemotherapy. Website Blink Health lists the price of 30 100 mg tablets as more than $2,900.

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


Key Findings

Market Events Drive Changes

In November 2018, the FDA gave accelerated approval to AbbVie Inc. and Genentech, Inc.’s Venclexta in combination with a hypomethylating agent or low-dose cytarabine (LDAC) for the treatment of people with newly diagnosed acute myeloid leukemia (AML) who are at least 75 years old or for those ineligible for intensive induction chemotherapy. That same month the agency approved Pfizer Inc.’s Daurismo in combination with LDAC for the treatment of newly diagnosed AML in people at least 75 years old or who cannot undergo intensive induction chemotherapy, as well as Astellas Pharma Inc.’s Xospata for adults with relapsed or refractory AML with an FLT3 mutation as detected by an FDA-approved test.

Medical and Pharmacy Benefit Implications

Coverage for drugs in this indication is good and processes through both the pharmacy and medical benefits. Idhifa, Venclexta, Daurismo, Tibsovo, Xospata and Rydapt are oral and will always process through the pharmacy benefit, while the injections Mylotarg and Vyxeos will be mainly through the medical benefit.


AIS Health’s View

According to Tegenu and Wong, many drugs are in the AML pipeline. On June 21, Daiichi Sankyo Company, Ltd. said that the FDA had issued a complete response letter (CRL) for its new drug application for quizartinib for the treatment of adults with relapsed or refractory FLT3-internal tandem duplication (ITD) AML. The company said it is evaluating the CRL and “will determine next steps in the U.S.” Jazz Pharmaceuticals, Inc. has several drugs in phase I, II and III trials, says Tegenu. In early September, Forty Seven, Inc. said the FDA had granted fast track designation to its magrolimab for AML and myelodysplastic syndrome based on initial data from a Phase Ib trial. The agency also gave the therapy orphan drug designation in AML. Wong notes that compounds being studied focus on mutations and pathways already targeted, as well as new ones. Researchers also are studying targeted follow-on therapies that are better tolerated in terms of side effects, he says.


Acute Myeloid Leukemia Therapy Class Has Seen Boom in New Drugs Since 2017

October 14, 2019

The FDA has approved nearly 10 therapies for acute myeloid leukemia (AML) over the past couple of years. Because most of them target a specific biomarker, it’s critical that people diagnosed with the condition undergo genetic testing to determine whether they fall into a particular patient subgroup.

In people with AML, the bone marrow produces abnormal white blood cells, red blood cells or platelets. The abnormal growth “results in suppressed normal bone marrow activity,

The FDA has approved nearly 10 therapies for acute myeloid leukemia (AML) over the past couple of years. Because most of them target a specific biomarker, it’s critical that people diagnosed with the condition undergo genetic testing to determine whether they fall into a particular patient subgroup.

In people with AML, the bone marrow produces abnormal white blood cells, red blood cells or platelets. The abnormal growth “results in suppressed normal bone marrow activity, leading to anemia, infections, and bleeding, among other symptoms and complications, and can be fatal if left untreated. Hence, the goal of therapy is to be aggressive with the goal [of] achieving complete remission,” says Winston Wong, Pharm.D., president of W-Squared Group. “At the highest level, treatment decisions are made based upon AML classification, comorbidities and age, all of which will determine the patient’s prognosis and ability to tolerate the treatment. Genomic profiling studies play a key role to identify potential genomic abnormalities and mutations, for which there is a strong correlation to prognosis.”

Once people go into remission, he tells AIS Health, they undergo consolidation treatment, also known as post-remission therapy. This, he says, consists of “aggressive chemotherapy, with targeted medications added on if a specific gene mutation is present. Selection of treatment option is based on individual parameters such as age, white blood cell counts, ease of remission induction, comorbidities and any evidence of measurable residual disease.”

Those patients not achieving remission or who have relapsed often undergo stem cell transplants or enroll in clinical trials, he adds.

As far as comorbidities go, there are not any specific ones that are common with AML, says Mesfin Tegenu, R.Ph., president of PerformRx, LLC. But when people are diagnosed with the condition, “they tend to have at least one comorbidity,” such as diabetes, he says. “However, these comorbidities may be due to other factors such as lifestyle/age and are not necessarily attributed to AML. Patients with comorbidities tend to have compromised health outcomes when it comes to treatment compared to those who are otherwise healthy.”

And those comorbidities can impact the treatment regimen that the patient undergoes. For example, says Wong, “a comorbidity of heart disease will impact the use of an anthracycline (daunorubicin), which is one of the components of the preferred intense induction chemotherapy regimens. Anthracyclines are a known cardiotoxin, hence will exacerbate the heart disease.”

Class Saw Eight Recent Drug Approvals

The class has undergone a burst of activity recently (see box, p. 4), with the FDA approving eight new therapies since April 2017. The following drugs are the most recent additions to the AML treatment armamentarium:

✦ Rydapt (midostaurin) from Novartis Pharmaceuticals Corp. was approved April 28, 2017.

✦ Idhifa (enasidenib) from Celgene Corp. and Agios Pharmaceuticals, Inc. was approved Aug. 1, 2017.

✦ Vyxeos (daunorubicin and cytarabine) from Jazz Pharmaceuticals plc was approved Aug. 3, 2017.

✦ Mylotarg (gemtuzumab ozogamicin) from Pfizer Inc. was approved Sept. 1, 2017.

Tibsovo (ivosidenib) from Agios Pharmaceuticals, Inc. was approved July 20, 2018.

✦ Daurismo (glasdegib) from Pfizer was approved Nov. 21, 2018.

✦ Venclexta (venetoclax) from AbbVie, Inc. and Genentech USA Inc., a member of the Roche Group, was approved Nov. 21, 2018.

✦ Xospata (gilteritinib) from Astellas Pharma Inc. was approved Nov. 28, 2018.

Most recently, on June 21, Daiichi Sankyo Company, Ltd. said that the FDA had issued a complete response letter (CRL) for its new drug application for quizartinib for the treatment of adults with R/R FLT3-internal tandem duplications (ITD) AML. The move followed a May 14 vote by the agency’s Oncologic Drugs Advisory Committee recommending eight to three against approval of the drug. The company said it is evaluating the CRL and “will determine next steps in the U.S.” It was approved June 18 for use in Japan under the brand name Vanflyta.

“Prior to two years ago, we had no new drugs for over a decade, and now we have eight new drugs approved in just the last two years, so the whole field has changed,” said Daniel J. DeAngelo, M.D., Ph.D., chief, division of leukemia, institute physician, professor of medicine, Harvard Medical School, in an interview published on the website obroncology.com. “Really what that means is that it is really important to make a specific genetic and molecular diagnosis for our patients with acute myeloid leukemia because the treatment might very well may be different.”

“AML is associated with characteristic nonrandom chromosomal abnormalities and genetic defects that are used to classify AML and that are associated with response to therapy and prognosis,” says Wong. “Continued research into the genomic aspect of AML is resulting in a constant redefining of risk stratification and development of targeted therapies. At this time, the new targeted therapies are being given in addition to the aggressive chemotherapy when the specific genomic mutation is present. There is no doubt that as we continue to gain insight to the presence of other genomic mutations, we can expect to see further refinement of the treatment options, as well as additional novel targeted treatment options developed.

“Currently, we have identified gene mutations impacting cell proliferation, myeloid differentiation, cell-cycle regulation and epigenetic regulation,” he continues. “Specifically, mutations in FLT3, NPM1, KIT, CEBPA and TET2 impact proliferation and differentiation, [and] DNMT3A, ASXL1, IDH2 and TET2 impact epigenetic regulation. New novel targeted medications, as well as older medications with an expanded indication, are currently being used to address cell proliferation (FLT3 inhibitors) and epigenetic regulation (IDH inhibitors).”

Many of the newer drugs are oral formulations, which, “in general, are easier to administer,” points out Tegenu. “Rather than having to go into a hospital or clinic for treatment, a patient can simply take a medication orally for their condition.”

However, even with all the new therapies available, “in some respects, the treatment options have not really changed,” Wong states. AML treatment starts “with one to two courses of intensive combination chemotherapy (induction therapy), with a goal of obtaining a complete remission. Targeted medications would be added on to the chemotherapy. The rationale for this approach is because the specific gene mutations are not consistently present across the broad AML population,…chemotherapy is still the only option for a broad suppression of the bone marrow. The oral targeted therapies are also used for the older patients, more than 60 years old, who are not candidates for intense chemotherapy, as well as for relapsing/refractory AML.”


MMIT’s Take: Acute Myeloid Leukemia

“Acute Myeloid Leukemia (AML) presents a very high financial burden on patients, payers and the healthcare system overall,” Alaa Elsaeed, a client success lead at MMIT, tells AIS Health. “This is due to long hospitalizations, high rates of complications and the need for stem cell transplants.”

According to Elsaeed, approximately 20,000 new cases of AML were estimated to be diagnosed in 2018, making it one of the most common forms of acute leukemia in the U.S. Elsaeed says that despite a number of new drugs on the market and other recent medical advances, outcomes for AML patients are still poor due to high rates of relapse, the cancer’s poor response to treatment and increased prevalence among seniors.

“The payer concern regarding the budget impact of AML has historically been low due to the small size of the population in comparison to solid tumors, the high severity of the disease and the lack of branded treatment options,” Elsaeed adds. “As a result, few access controls were historically utilized for AML therapies.”

“Looking at the AML market basket’s overall market access, with the exception of older products, most of the class is in the covered or better tiers for about 35% of lives,” Elsaeed says, mentioning that payers often require prior authorization for AML therapies due to their high cost, patient safety and concern for off-label use.

While the cost of AML treatment has not previously been a cause for concern, Elsaeed says increased prevalence of the disease and the “surge” of newly approved products has some payers considering how these developments might impact their budgets in the future.

“Many of the recently approved products and late stage pipeline candidates are targeted therapies and despite their smaller patient populations, they are anticipated to contribute heavily to the increasing cost of therapy,” he says. “Due to the rising expenditure, payer acceptance will become more critical for the commercial success of new AML therapies.”


Average annual costs for someone with AML can vary. “Many sources have reported different costs for AML patients,” explains Tegenu. “In a study conducted in 2017, 237 newly diagnosed patients with an average age of 73.1 years were observed. After diagnosis, these patients were either started on chemotherapy or given a stem cell transplant. During the first year after diagnosis, the average annual cost was about $294,144. The second year after diagnosis costs about $147,708. Treatment-related costs were approximately $188,252 and approximately $57,606 in the first and second year respectively. If a patient required a stem cell transplant and chemotherapy, their average cost for treatment can be about $544,178.”

Payers utilize a variety of management tactics with AML therapies (see infographic, p. 6). “Payers often require prior authorization of these therapies due to safety, concern for off-label usage and cost,” says Tegenu. A variety of drugs are used off- label for certain patient populations, he notes.

“Due to the various considerations that go into the choice of a treatment option, the management of the various treatment options by a payer is difficult,” maintains Wong. In addition to the above-mentioned factors that are considered when deciding upon a regimen, “past disease history also plays a part in treatment decisions. Hence, utilization management defaults to the usual confirmation of the indicated use, e.g., an FLT3 inhibitor in the presence of an FLT3 mutation. In cases where off-label utilization is requested, management consists of confirmation that there is adequate medical evidence [about] the benefit of the off-label use in this indication, e.g., Nexavar in the presence of an FLT3 mutation.”

Asked if AML is a condition suited for value-based contracting, Tegenu asserts that “all therapies associated with high cost should have some kind of value-based payment models to make drug manufacturers an integral part of the health care delivery system.”

According to Wong, the newer drugs would be better candidates for such deals due to AML’s heterogenicity and the fact that “the treatment foundation is still conventional chemotherapy, which for the most part is available as a generic.”

Value-Based Deals Pose Challenges

Challenges exist in implementing such arrangements for the newer drugs, he says: “These are targeted medications, and the IT systems of today are not sophisticated enough to be able to document the presence of the gene mutation, e.g., extracting genomic profile information from the lab system/[electronic medical record] and interfacing it with the payer claims system. We would not be able to determine if the targeted agent was successful in getting the patient into remission, as well as maintaining that remission through consolidation.

In addition, the targeted agents are add-on therapy and may very well not be effective enough without the chemotherapy. So then, it is a question of whether remission and consolidation [were] achieved because of the targeted medication. Patients reaching remission and consolidation is dependent upon individual patient factors beyond that of medication effectiveness. Thus, it is the entire clinical presentation and treatment that plays into the success of positive outcome.”

According to Tegenu and Wong, numerous drugs are in the AML pipeline. Jazz has several drugs in phase I, II and III trials, says Tegenu. In early September, Forty Seven, Inc. said the FDA had granted fast track designation to its magrolimab for AML and myelodysplastic syndrome based on initial data from a Phase Ib trial. The agency also gave the therapy orphan drug designation in AML.

Wong notes that compounds being studied focus both on “mutations and pathways already identified and targeted, e.g., FLT3 [and] IDH, as well as mutations and pathways that have been identified, however, the significance [of] which is being evaluated. As the research in this area continues, novel medication targets are evaluated as well.”

Researchers also are studying targeted follow-on therapies that are better tolerated in terms of side effects, he says. In treating AML, “it’s important to be correct and not fast,” said DeAngelo. “Patients can wait a few days before initiating chemotherapy to try and put them into these different subgroups, and I think that’s really where the improvement for our patients with acute myeloid leukemia is going to be coming from in the future.”

by Angela Maas


Radar Landscape Offers a Narrative Experience for Payers’ Covered Lives

MMIT’s newest product, Radar Landscape, shifts the focus from drug coverage to the distribution of payers’ covered lives. MMIT developed Radar Landscape after receiving feedback from account managers who were interested in having a narrative on the allocation of payer lives in the market. Radar Landscape takes MMIT’s lives data and provides detailed breakdowns at a channel, state, core-based statistical area (CBSA) and formulary level, which users can view and export in a table or graph format. Radar Landscape achieves this level of granularity by providing users with three unique views: overview, account and geography.

The overview screen provides a high-level summary of how lives are distributed at the payer and state level. The controller lives analysis breaks out the number of controlled pharmacy and medical lives for each account and lists the top 10 payers for both benefit types. The overview of geographies shows lives distribution at a state level, which can be viewed as a table or geographical heat map. To understand the lives distribution for a specific payer, account managers can navigate to the accounts view.

Account managers can leverage the accounts view to understand the total number of enrolled pharmacy and medical lives for the selected payer. Once the account filter is applied, Radar Landscape will populate the payer’s top 10 formularies, the total number of lives they control in each channel and the number of enrolled lives by state and CBSA. To further understand lives distribution at the geographical level, account managers can navigate to the geography view.

Using the geography view, users can observe the total number of covered lives and top payers in a specific state. Once the geography filter is set, account managers will be able to see the top 10 controllers and formularies in their selected area, as well as the distribution of lives by channel. The geography view also includes all of the pharmacy benefits managers operating in a specific state, as well as a lives breakout for employer-based plans.

To learn more about Radar Landscape’s functions and licensing, please reach out to MMIT’s sales team at sales@mmitnetwork.com.

by Amanda Tadrzynski


Will New Ways to Finance Costly Drugs Satisfy Employers?

With concerns mounting about how health plan sponsors will pay for breakthrough treatments with ultra-high price tags, some major insurers are offering up new solutions aimed at easing that burden.

Cigna Corp. “appears at the forefront” of initiatives to cope with super-high-cost drugs, as Citi analyst Ralph Giacobbe puts it, given that the firm recently introduced a new solution that would help clients pay for and manage two gene therapies: Luxturna and Zolgensma.

Members whose plan sponsors pay a per-member per-month fee for Cigna’s new solution — called Embarc Benefit Protection — will pay nothing out of pocket for Zolgensma or Luxturna if they meet the clinical qualifications to be treated with one of those therapies.

“Employers are looking for solutions like that from their health plan partners and the PBMs,” says Steve Wojcik, vice president of public policy for the National Business Group on Health. However, while offerings like Cigna’s could help employers “smooth out the spikes in expenses,” businesses remain concerned about the overall costs of breakthrough therapies in the pipeline, he notes.

Besides Cigna, other major names in the insurance sector, such as CVS Health Corp.’s Aetna and Anthem, Inc., are working on their own solutions to help cope with high-cost therapies, including annuity-style payment arrangements and value-based contracts.

David Dross, managed pharmacy practice leader at the consulting firm Mercer, says some large, self-insured employers that are concerned about ultra-costly treatments are rethinking their decision to forgo stop-loss coverage.

However, issues can arise if clinical and financial management of a high-cost drug are done separately, he adds. In other words, a plan sponsor may determine that a member qualifies for a high-cost drug, but the stop-loss carrier that’s taking on the financial responsibility may not agree.

by Leslie Small



Will Various Drug Pricing Efforts Endanger Innovation Within Pharma? Opinions Vary.

October 7, 2019

As drugmakers continue to gain insight into biomarkers and how to drill down into subsets of diseases, they are producing an astonishing array of novel new therapies. But innovation does not come cheap in the pharmaceutical industry. For example, the IQVIA Institute for Human Data Science reports that the median annual cost of new oncology drugs in 2018 was almost $150,000. At the same time, there has been a flurry of activity aimed at bringing down drug prices.

As drugmakers continue to gain insight into biomarkers and how to drill down into subsets of diseases, they are producing an astonishing array of novel new therapies. But innovation does not come cheap in the pharmaceutical industry. For example, the IQVIA Institute for Human Data Science reports that the median annual cost of new oncology drugs in 2018 was almost $150,000. At the same time, there has been a flurry of activity aimed at bringing down drug prices. And while efforts to make treatments affordable certainly are needed, those approaches should be such that they don’t hamper manufacturers’ research and development tactics, caution some industry experts.

One of the proposals is the International Pricing Index (IPI), an effort by HHS to bring payments for Medicare Part B closer to what other countries pay for these drugs, unveiled in October 2018 through an Advance Notice of Proposed Rulemaking (SMA 11/18, p. 1). Among the provisions is one to change Part B reimbursement from average sales price plus 6% to instead an approach based on drug pricing data from not only the U.S. but also 16 other “developed economies: Austria, Belgium, Canada, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden, and the United Kingdom.”

The administration has said that it still plans to move forward with the effort.

Among other proposals is one requiring that direct- to-consumer television ads for certain prescription drugs contain their wholesale acquisition cost (SMA 11/18, p. 1). That effort recently was deemed invalid by a judge in response to an industry lawsuit (SMA 8/5/19, p. 1); the administration is appealing. Another strategy would have done away with the safe-harbor protection in the anti-kickback statute for rebates negotiated between manufacturers and PBMs (SMA 2/18/19, p. 1). Following the Congressional Budget Office’s projection that the rule would increase federal spending by approximately $177 billion from 2020 to 2029 (SMA 5/20/19, p. 1), the administration withdrew the rule.

Uncertainty Surrounds Bills

But the efforts haven’t all been from the administration. Both the Senate and the House have proposed sweeping efforts to target drug prices. The Senate’s Prescription Drug Pricing Reduction Act (PDPRA) of 2019, introduced in July, proposes multiple changes to Medicare Part B and Part D, as well as Medicaid (SMA 8/5/19, p. 1). The Senate Committee on Finance passed the legislation, but it’s unclear whether Senate Majority Leader Mitch McConnell (R-Ky.) will allow a vote on the Senate floor.

However, McConnell’s stance on the House’s drug pricing bill, unveiled in September, was crystal clear: In an interview with Politico, he maintained that “socialist price controls will do a lot of left-wing damage to the healthcare system. And of course we’re not going to be calling up a bill like that.” The bill proposes, among other things, requiring HHS to negotiate the prices of up to 250 drugs in Medicare without competitors. Companies not coming to an agreement would be subject to financial penalties.

Drugmakers have vociferously pushed back on many of the proposals, with one of the arguments against them being that the efforts would have a chilling effect on pharma R&D. But opinions run the gamut on what kind of impact — if any — the moves would have on innovation.

“Empirical evidence” exists to support the idea that “lower spending on pharmaceuticals will lead to lower R&D spending and lower yield of innovative drugs,” says Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates. But “there isn’t enough evidence either way” to say whether “there aren’t policies besides spending that can impact innovation.”

“Additional patent protections and favorable tax treatment of R&D expenditures for drugs designated to treat ‘orphan’ indications appears have resulted in a large push among manufacturers and investors to bring those products to market,” he points out. “And those efforts succeeded, although sometimes at astronomical price points.”

Indeed, a July Health Affairs blog concluded that “the connection between high drug prices and innovation is more nuanced than commonly discussed. Reducing drug revenue (a combination of net prices paid for their use and quantity) would almost certainly reduce R&D investment and the yield of important new drugs. However, it may be possible to mitigate the negative effects of reducing high prices—one part of revenue—by simultaneously implementing other policies to promote drug use and reduce R&D costs. Finding a better balance between robust innovation incentives and high prescription drug prices should inspire aggressive information gathering, drive focused empirical experimentation, and embolden reforms already underway.”

A 2017 Health Affairs blog acknowledges the validity of the argument that strategies to reduce drug prices will result in less R&D investment. However, wrote the authors, “we question the premise that more innovation is always a good thing. A central tenet of economics is the law of diminishing returns. In this case, additional resources going into innovation inevitably yield fewer important breakthroughs. At some point, perhaps already reached, the yield from additional resources going into R&D no longer justifies what society is paying in the form of higher prices to support this.”

“Indeed, it is possible that the current magnitude of innovation in pharmaceuticals is already too high in the sense that resources going into it might be better used for infrastructure, education, housing and other priorities,” they wrote, noting that because the government already pays a high portion of increased drug prices through Medicare and Medicaid, as well as via tax subsidies, “higher drug prices inevitably lead to either higher taxes or cuts in spending for other priorities.”

According to Rubinstein, “it seems to me (as a non- economist) that there are two decisions that investors make: (1) whether to invest in R&D vs something else, and (2) whether, once deciding to invest in R&D, that R&D investment should go into pharmaceuticals. The issue is what other investment opportunities those dollars could go to where they could yield better future risk-adjusted returns. It seems to me that while pharmaceutical R&D is costly and risky, the payoff for success is potentially huge, as the marginal cost of production is quite low relative to the net market price, and given multiyear patent protection. So if the net market price is reduced due to government action to control drug prices or due to fewer policy protections and benefits, the key question remains: Even if margins and protections are lower, might that scenario still be better compared to other investment opportunities? It seems to me that this question depends on moment to moment comparative dynamics across industries and internationally, so [it is] not so easy to answer categorically. Another way to put it: How outsized need the investment opportunities be, relative to other opportunities, to continue investors’ preference for pharmaceutical R&D?”

The federal proposals, says Winston Wong, Pharm.D., president of W-Squared Group, “are all over the place, ranging from what seems to be outlandish, to totally ineffective. They all come and go, and none of them are really clear as to what the details are. I suspect they never get that far into the discussion. Hence, it is difficult to know what the true impact will be on innovation and drug development.”

Overall, he says, most of the proposals are targeting drug costs “mostly from a transparency and negotiations standpoint. In the end I doubt there will be much impact upon innovation because innovation is a vital component of the life cycle to keep the industry moving. I would be more concerned if there was a direct correlation between the cost of research and development and the cost of the medication, as opposed to pricing being driven by what the market will pay, which is any list price under the current environment. The EU does not stop innovation.”

Jeremy Schafer, Pharm.D., senior vice president, director, access experience team at Precision for Value, maintains that the two proposals posing the “biggest initial threat” to manufacturers are the IPI and PDPRA. If either is implemented, he tells AIS Health, “the government will have to consider developing alternative incentive schemes, or exceptions to the law, to encourage manufacturer investment in rare and complex diseases that have small patient populations. Without those incentives, manufacturers may not pursue drugs in those disease states.”

However, says Ashraf Shehata, national sector leader for KPMG’s Healthcare & Life Sciences practice, “just because legislation is passed, that doesn’t mean drugmakers will stop making medicines. Pricing regulations, however, create a whole new equation about what medicines can afford to be developed.” In the absence of action impacting R&D costs, “pricing regulations create a higher hurdle for drugmakers to make a profitable product, and that could slow the number of medications in the pipeline. Affordability of medications is a big issue, but we also need to address the costs of verifying that a compound under development is safe and effective.”

According to Lisa Kennedy, Ph.D., chief economist and managing principal at Innopiphany LLC, “the biopharmaceutical industry is responsible for approximately 70% of all innovation within health care — that is to say that the majority of R&D happens within the pharmaceutical industry. Price fixing of pharmaceuticals has been shown in several studies to have a knock-on effect on innovation.” In addition, she says, “price controls have been directly linked to decreases in life expectancy. So sure — price controls in the pharmaceutical industry will definitely reduce the pace of new drug development. And what is one of the most productive and exciting areas of innovation in biopharmaceuticals? Oncology. Cancer is the largest pharmaceutical therapeutic category, with U.S. sales estimated to grow from $39 billion in 2017 to $70 billion by 2023. So oncology could be hit particularly hard.”

“If enacted, it is reported that at least some of the proposed drug pricing legislation has the potential to pull upwards of $100 billion from the pharmaceutical industry over a 10-year period. It stands to reason that lost revenue will impact innovation,” says Ira Studin, principal at Stellar Managed Care Consulting, LLC. “Two angles appear particularly vulnerable. Big pharma could be less inclined to pursue more challenging research programs, focusing instead on areas where incremental gains appear more certain. Also, small, non-public biotech start-ups could find it more difficult to raise capital because the future market is now less attractive.”

Also potentially impacting these small start-ups are “efforts to erode protection in things like the Orphan Drug Act,” says Kennedy, spurred by debates around whether the statute promotes innovation or allows companies to take advantage. Small start-ups, she says, “are responsible for a huge number of promising oncology products, and they require the Orphan Drug Act incentives and tax breaks to secure angel and venture investments. We could see large numbers of oncology drugs lost without these protections.”

Legislation could also negatively impact bioclusters, geographically concentrated groups of biosciences-focused organizations interacting and collaborating in areas such as research and innovation, Kennedy tells AIS Health. “As lessons from Japan and other parts of the world have shown, it is really hard to build up a biocluster — the years of expertise, infrastructure and development aren’t something that once they decline can be immediately reversed. It can take decades to get it back to where it was.”

Because of this, she stresses the importance of people understanding “intimately the impact of this type of legislation: These are issues with a lot of nuance and complexity that are hard for individuals to understand and require really thoughtful measures to balance affordability challenges with the need to keep innovation intact.”

The U.S., she notes, “drives pharmaceutical innovation” through the National Institutes of Health and “a strong bench-to-bedside excellence from the biopharmaceutical industry. Government has the tendency to overcorrect, and sometimes the results of these actions cannot be accurately measured for very long periods, and then it is hard to reverse these overcorrections.”

“Many people have grown tired of the argument that higher-priced drugs are connected to the R&D cost,” says Kennedy, “and while it is true that there are some elements of price adjustments that need to be balanced with value and affordability, it doesn’t erase the link between price reductions and reduced funding for R&D investment at some level.”

Contact Kennedy at lisa.kennedy@epiphanomics.co, Rubinstein at elan.b.rubinstein@gmail.com, Schafer via Tess Rollano at trollano@coynepr.com, Studin at istudin@stellarmc.com and Wong at w2sqgroup@gmail.com.

by Angela Maas


Visibility Into Cost, Coverage Information Is Key for Providers, but Progress Is Slow

Health plans, PBMs and the pharmaceutical industry itself long have wanted to design user-friendly information technology systems that give prescribers coverage and cost information on medications at the point of prescribing.

Creating visibility into cost and coverage could help all system stakeholders as denials drop and adherence improves, experts agree. If the information available included details and eligibility for financial assistance programs provided by drug manufacturers, it would be even more useful.

However, providing coverage and cost data at the point of prescribing is turning out to be a difficult needle to thread. Analysts agree that the best approach is to fully integrate data into electronic medical records — prescribers want it at their fingertips as they’re meeting with their patients, and if they have to switch systems, they probably won’t bother.

The Advisory Board Company, an arm of UnitedHealth Group’s Optum consulting practice, recently held a summit with key stakeholders on adherence that touched heavily on transparency issues and how to get key cost and coverage data to prescribers, says Lindsay Conway, managing director.

“The single biggest takeaway was the importance of factoring in physician workflow into any solution you bring,” says Brandi Greenberg, managing director, life sciences, the Advisory Board Company. “You can have a great solution, but if it isn’t yet integrated into a physician’s EHR [i.e., electronic health record] or they have to log in and log out, it’s not a great solution.”

There’s an opportunity for the pharma manufacturing industry to fill some gaps, says F. Randy Vogenberg, Ph.D., principal, Institute for Integrated Healthcare in Greenville, S.C. “Manufacturers would like to have their product availability and coverage better known at the time of prescribing,” Vogenberg says. “They can utilize sales or clinical field personnel in addition to account managers to help get the information made available or known by clinicians.”

Slow Movement Toward Visibility Exists

Several companies — representing health plans, PBMs and parts of the pharmaceutical supply chain — have taken steps to improve prescriber visibility into costs and coverage.

For example, Humana Inc. said in June that it would integrate its Real-Time Benefits Check tool, IntelligentRx, directly into Epic, the most widely used EHR system, in order to deliver real-time pharmacy data to providers. By doing so, Humana will help to ease administrative burdens for providers and surface quality and cost information to providers as they make referral decisions at the point of care, Humana said. It also should help to improve medication adherence by presenting treatment alternatives with cost information to providers while they’re making prescribing decisions, said the insurer.

In January, Cerner Corp. announced a collaboration with CoverMyMeds, a wholly owned subsidiary of McKesson Corp. Under the pact, Cerner’s ePrescribe tool will partner with CoverMyMeds’ RxBenefit Clarity tool, delivering patient payment and benefit information at the point of prescribing. Nearly 1,600 clinics use Cerner’s EHR.

Surescripts boasts that 80% of prescribers have access to its price transparency tool, called Real-Time Prescription Benefit, via their EHRs. When combined with Surescripts’ electronic prior authorization tool, the two solutions allow providers to review patient- specific drug prices before prescribing, evaluate clinically relevant and preferred therapeutic alternatives based on individual patients’ characteristics, compare drug processes across channel options such as mail order and retail and complete prior authorizations “only when necessary,” allowing providers to streamline their workflows.

Finally, the federal government under the Trump administration is pushing the pharmaceutical industry towards price transparency. However, the administration’s proposed rule that drugmakers disclose prices in television ads was sidetracked in July by a federal judge who said Congress must act to give HHS permission to promulgate such a rule (SMA 8/5/19, p. 1). In addition, no federal solution on drug price transparency has been envisioned that would reach the granular level of detail needed for a physician to tell a particular patient how much her out-of-pocket spending might total.

Still, multiple significant barriers remain, Vogenberg says. “The lack of transparency and easy access to coverage status — good or bad — remains a conundrum for all key stakeholders in the U.S. health care system,” Vogenberg tells AIS Health. “IT limitations, contractual requirements or supply limitations and inefficiencies among the number of supply chain partners all contribute to issues at the point of decision-making by clinicians with their patients.”

Progress on integrated systems that would provide meaningful information at the point of prescribing has been slow and inconsistent, Vogenberg says. “There have been several efforts over the years by multiple parties to improve visibility into payer coverage on their formularies,” he says.

“Pharmacy benefit managers and other third-party payer organizations have created more links and improved their own websites or digital platforms, but have not tied directly into health system/hospital EHRs per se,” Vogenberg explains. “GoodRx [a consumer-facing startup that tracks prescription drug prices and offers coupons] and other consumer-centric entities and advocacy organizations have done similar actions to get information out in provider or consumer hands. Overall, speed of improvement has been slow and incomplete.”

Data Varies by Product Type

Health systems and PBMs generally are aware of the transparency problem and how it can affect overall costs and adherence. Vogenberg says health systems are working to capture real-time coverage information and include it in EHRs, “but experts say it will take many more years to achieve that goal, along with total system interoperability.” Maintaining the information on different platforms also can be challenging, he says, since there could be “errors, bugs or inaccurate information due to lag times or interoperability problems.”

Currently, it’s not clear how many physicians have ready access to payer drug coverage and formulary information at the point of prescribing, but it’s likely a small percentage and varies by the type of practice, clinic ownership and other systems running. A larger group of physicians may have access to some information at the point of prescribing, but that access may be limited and difficult to use.

The information available differs by types of products. Conway says that infused and injectable drugs that are administered in providers’ offices tend to offer the most visibility regarding cost and coverage, since providers have an incentive to determine whether patients are covered.

The data could be a two-way street: Vogenberg adds that most specialty and biologic drugs “typically have tight supply chains that include extensive reporting of data back to the manufacturer. Such data may be required by a REMS [i.e., Risk Evaluation and Mitigation Strategy].”

In the case of infused and injectable drugs, “the prescriber will probably hand off the patient to an insurance specialist or a financial counselor to check whether the drug is covered and what the estimated out-of-pocket would be,” Conway says. In this case, the pharmaceutical manufacturer’s role could be to provide financial assistance to patients who need it, she adds, although “health plans have a very uneasy relationship with pharma providing financial assistance and are not always excited about promoting it.”

Some providers may help patients determine coverage and cost issues for specialty medications that are dispensed through specialty pharmacies. Although “this category’s a bit fuzzy,” providers who typically care for patients who use many high-cost medications — for example, rheumatologists — are more likely to have staff members who help patients work through these financing issues, Conway says, adding, “my sense is that any physician who’s routinely prescribing high-cost medication is going to be attuned to coverage.”

Still, she says, “the difference is they [the providers] don’t have money on the line — it’s unreimbursed time for them.” In addition, many patients are taking multiple medications from different prescribers, which complicates both the clinical and financial pictures, she says. “I think when we get fragmentation of different specialists, and also patients trying to navigate different programs, it can be very overwhelming from the patient or physician perspective to try and optimize and take advantage of the programs out there.”

Prescriptions that are fulfilled by a third-party specialty pharmacy and more common drugs that are covered under the pharmacy benefit tend to have less visibility and transparency for providers, she says.

Conway also says physicians’ attitudes are changing on how much they want to know about various drugs’ costs and coverage. “A decade ago, not only did physicians not know what drugs were covered by a particular health plan — they didn’t want to know. They wanted to make clinical decisions unsullied by cost,” she says. “This is changing. Physicians are interested in managing the total cost of care. So this is an interesting transition period.”

Tools Vary in Usefulness

All major PBMs and a lot of smaller ones have created tools to help providers determine coverage and out-of-pocket costs of drugs they prescribe, Conway says. She notes that “the tools have been shown to be very effective in terms of getting patients on a drug that’s covered more quickly.”

However, these tools are not always completely user-friendly, Greenberg says; in many cases, prescribers need to log out of their EHRs and into a separate system to look up a drug, and then log out of that system and back into their EHR once they’re done looking up drugs, she says. In a focus group convened by the Advisory Board, “this came up as one of the biggest challenges — it’s not neatly integrated into the physician workflow, they have to log in and log out, and not all tools work with all EMRs.”

Of course, getting information to physicians about the cost and coverage of different pharmaceutical products is only one piece of the puzzle, Conway says. The second piece is “equipping providers to have that conversation with their patient. It takes time and sensitivity, and it’s a hard topic.”

Physicians dealing with complex medical conditions frequently delegate this task to a staff member, she says. For example, “in oncology, by and large the community has decided it’s not the best use of the oncologist’s time [to discuss financial issues], so it’s delegated to another member of their team.”

In addition, primary care physicians who are practicing in a patient-centered medical home may have a social worker or other staff member available who can deal with financial and drug coverage issues, and return quickly to the physician if a change in a prescription is necessary, Greenberg says. A medical home may even have a pharmacist available for consultation, she says, noting, “it’s a team-based approach.”

In those cases, representatives of pharmaceutical manufacturers should consider speaking to lower-level staff members at physician practices, instead of going “up the ladder” to higher-level clinicians, Greenberg says.

Some pharma companies are embedding documents or reminders about financial assistance programs into EHRs, Greenberg says, adding that she first started hearing about this practice three or four years ago. “Very often, this goes hand-in-hand with organizations that have invested in key accounts programs,” she says.

OptumRx Touts Adherence

PBM OptumRx offers a program called PreCheck MyScript, which consolidates what medications are covered; highlights any clinically appropriate, lower-cost options; and calculates exactly how much the options will cost individual patients. The technology is embedded within the provider’s existing EHR system and also includes a trial claims function to help both providers and members make informed decisions based on actual cost and coverage information in real time.

The tool works to improve adherence while also helping to save members money, according to a white paper OptumRx published in January.

In a series of studies consolidated and analyzed in the white paper, Optum reviewed more than 13 million transactions for 2.6 million members involving more than 110,000 health professionals from July 2018 through November 2018. The researchers looked at the costs associated with each step of the prescription process, including physician and pharmacist time, member costs and member adherence.

The white paper analysis showed that on average, physicians who used PreCheck MyScript chose a lower-cost alternative at least 24% of the time, leading to savings of $11.75 per prescription. In addition, physicians who used PreCheck MyScript saw fewer prior authorization/medical necessity rejections and denials, reducing work for themselves. The researchers estimated that avoiding prior authorization and formulary rejections reduced providers’ per-patient time by 27 to 31 minutes compared with providers not using PreCheck MyScript.

Finally, adherence rates rose modestly, the white paper found. The researchers identified a 4% improvement in medication adherence for diabetes, a 4% improvement for statins and a 2% improvement for hypertension after the PreCheck MyScript system was implemented.

OptumRx spokesperson Andrew Krejci tells AIS Health that more than 188,000 physicians have used PreCheck MyScript in the past year, and the system is generating more than 3.5 million transactions per month. Specialty drugs covered under the pharmacy benefit are included in the tool, he says. The entire tool is seamlessly embedded within the EHR as part of the e-prescribing process flow, he says.

“We currently partner with a wide variety of cloud-based EHRs that have automated (push) deployment systems resulting in immediate scalability,” Krejci says. “We also partner with several server-based EHRs that require a health system-centric focus, as many contract with their own IT departments.” PreCheck MyScript currently is deployed to Allscripts, Athena, Cerner, Dr. First, Epic, Meditech and NewCrop, among other EHRs, he says.

“Increasing provider access is a top priority for OptumRx,” Krejci adds. “We are focused on expanding adoption with doctors, continuing to provide accurate and valuable information that helps providers and consumers better engage with prescription decisions and enhancing the solution to ensure we deliver value and exceptional experiences for consumers and providers.”

Pharma Can Step Up

Greenberg tells AIS Health that “there’s an opportunity for pharma.” She notes that “we get a lot of questions from life sciences leaders about who else [beyond physicians] should we be talking to. More often than not, we find it’s a very effective strategy when they go down the ladder to social workers. They consistently undervalue the opportunity to share tools and resources with the provider’s care team.”

The more progressive pharmaceutical manufacturers have figured this out, Greenberg says. “A lot of it depends on how long they have had their key accounts program and how much they’re willing to invest in skills and competitiveness surrounding their key accounts people. We’re seeing a trend towards more investment, but there still are a lot who are not” investing.

Of course, Conway warns, this approach won’t work with many physician practices, since most of them don’t have a social worker as part of the team or another lower-level staff member who’s designated as the person to deal with patient coverage and financial issues.

Over the last two years, Greenberg says, she’s seen a growing interest from various stakeholders in greater pharmaceutical price and coverage transparency, coupled with growing trust and a sense of collaboration. But she says there’s still a long way to go.

“What I come back to is, I don’t believe that any one part of the industry is going to be able to solve this by itself,” says Greenberg. “Interest extends not just to contracting but to just breaking down some of the barriers. There is a growing recognition that certain problems will require cross-industry solutions, and we are still taking baby steps.”

Contact Conway and Greenberg via Advisory Board spokesperson Pete Simpkinson at SimpkinP@advisory.com, Vogenberg at randy@iih-online.com and Krejci at andrew.krejci@optum.com.

by Jane Anderson


Payers’ Coverage Factors for Rozlytrek Will Go Beyond Cost

The FDA’s August approval of Genentech, Inc.’s Rozlytrek (entrectinib) marked the third drug approved for a tissue-agnostic oncology indication. And while one of those two legacy drugs will compete directly with the newcomer, which is priced at a much lower point, payers and providers should make coverage determinations based on more than cost alone.

On Aug. 15, the FDA approved Rozlytrek for the treatment of adults with ROS1-positive metastatic non-small cell lung cancer (NSCLC). The agency also gave the drug from the Roche Group unit accelerated approval for the treatment of people at least 12 years old with solid tumors that have a neurotrophic tyrosine receptor kinase (NTRK) gene fusion without a known acquired resistance mutation; are metastatic or where surgical resection is likely to result in severe morbidity; and have progressed after treatment or have no satisfactory alternate therapy.

The first therapy to receive a tissue-agnostic indication was Merck & Co., Inc.’s Keytruda (pembrolizumab), to which the FDA gave accelerated approval on May 23, 2017, for use in all people with unresectable or metastatic microsatellite instability-high or mismatch repair deficient solid tumors that have progressed after treatment and do not have satisfactory treatment options, as well as people with MSI-H or dMMR colorectal cancer that has progressed after treatment with certain chemotherapies.

Then on Nov. 26, 2018, the FDA gave accelerated approval to Loxo Oncology, Inc. and Bayer Corp.’s Vitrakvi (larotrectinib) for the treatment of adult and pediatric patients with solid tumors that have an NTRK gene fusion without a known acquired resistance mutation; are metastatic or where surgical resection is likely to result in severe morbidity; and have no satisfactory alternative therapies or that have progressed after treatment (SMA 1/7/19, p. 6). Following Eli Lilly and Co.’s Feb. 15 unveiling of its planned purchase of Loxo, Bayer exercised its option to obtain exclusive licensing rights for the global development and commercialization of Vitrakvi and BAY 2731954 (LOXO-195), another TRK inhibitor.

Vitrakvi and Rozlytrek will compete directly for this indication. For the ROS1-positive metastatic NSCLC use, Rozlytrek will compete with Pfizer Inc.’s Xalkori (crizotinib), which also is indicated for NSCLC that is anaplastic lymphoma kinase (ALK)-positive.

The monthly price of Rozlytrek is $17,050 for adults. In pediatric patients, dosing varies based on body surface area.

That price is half of Vitrakvi’s $32,800 per month — but in line with Xalkori’s. An article in STAT points out that “in 51 patients [with ROS1-positive tumors], Rozlytrek had a response rate of 78%, compared to Xalkori’s 66%.”

According to Winston Wong, Pharm.D., president of W-Squared Group, “there is some indication that Xalkori is actually more effective in patients that exhibit both the ALK-positive and ROS1-positive mutations. This is currently being investigated under a breakthrough approval process. Should this approval become reality, I would anticipate…Rozlytrek to be used behind Xalkori, although there are indications that Rozlytrek has not been found to be effective in Xalkori failure in except in cases where there is a metastasis to the brain.” According to Roche, tumors in up to 40% of people with ROS1-positive NSCLC have spread to the brain.

Both Rozlytrek and Vitrakvi offer programs to help patients get the medications. With Vitrakvi, in a situation where a patient does not have a clinical benefit within 90 days of starting the drug, the cost of up to two months of the drug will be refunded to each entity that made a payment for the drug — patients, payers and third-party organizations — through the Vitrakvi Commitment Program. The Roche press release makes no mention of a similar program, and the company did not respond to an AIS Health request for comment on whether it is offering any value-based deals for Rozlytrek.

What are considerations for payers when it comes to coverage of Vitrakvi and Rozlytrek? “At the highest level, payers will look at efficacy, safety, and cost in making their determinations for coverage and ultimately formulary status,” says Wong. “Certainly, for the single common indication of treating advanced or metastatic NTRK gene fusion-positive solid tumors, the lower cost of Rozlytrek surely gives good justification to look to prefer the use of one product over another. The additional indication for Rozlytrek will also make it easier to justify the use of Rozlytrek over Vitrakvi. Given these two points, it seems that the decision is an easy one from a strategic care management standpoint.

“However, one then needs to ask why is Rozlytrek being marketed at nearly 50% of the cost of Vitrakvi, especially in this day and age of price inflation for novel products?” he continues. “One answer might be the overall efficacy of Rozlytrek. While Rozlytrek is observed to shrink a ROS1-positive NSCLC tumor in approximately 78% of the patients, Rozlytrek was only able to shrink the NTRK gene-fusion positive advanced/metastatic solid tumors in 57% of patients, compared to an overall response rate of approximately 75% for Vitrakvi.” This lower efficacy, he says, “will hinder a preferred status of Rozlytrek over Vitrakvi.”

Less-Frequent Side Effects Favor Vitrakvi

In addition, he points out that the drugs have similar adverse effects in terms of the ones most frequently reported. “However, when looking at the less frequent, more severe adverse effects, the profile is in favor of Vitrakvi,” says Wong. “Specifically, Vitrakvi’s label warns of neurotoxicity, hepatotoxicity and embryo-fetal toxicity. Rozlytrek shared the warning of hepatotoxicity and embryo-fetal toxicity but, in addition, warns of congestive heart failure, central nervous system effects, skeletal fractures, hyperuricemia, QT interval prolongation and vision disorders. When you are treating a patient in an already compromised clinical state, you do have to be cognizant of the risk of adverse effects.”

“Finally, given that both of these medications were fast-tracked, the evidence for long-term durability of the clinical benefit is minimal, as well as for any evidence of adverse effects associated with long-term use,” he continues. “Because Vitrakvi was released into the U.S. market last year, the experience with Vitrakvi is relatively longer than the experience with Rozlytrek, but neither agent has any extensive long-term use. In short, given the lower efficacy for advanced/metastatic NTRK gene fusion-positive tumors and the less favorable adverse effect profile and the relative short time of being on the market here in the U.S., there would be enough questions to lead a payer to allow for parity coverage and simply let the oncologists gain experience with both medications and allow the market dynamics to play itself out. The other point to be considered is that many states now have regulations in place that require coverage for any cancer treatment if it is supported by the FDA-approved indication, NCCN [i.e., National Comprehensive Cancer Network] guidelines or compendia.”

Ultimately, says Wong, “I would envision payers [will] utilize their normal prior-authorization process to insure the medications are being prescribed to the approved indication, which will include verification of the specific NTRK gene fusion-positive identification and for the ROS1 mutation with the cancer type being advanced or metastatic non-small cell lung cancer. I would not anticipate [a] UM [i.e., utilization management] program beyond the approved indication.”

Launch Is ‘in Line With Expectations’

During its July 30 conference call to report second-quarter earnings, an analyst asked about how the Vitrakvi launch was going, including patient numbers. Stefan Oelrich, a member of the Bayer board and head of the company’s pharmaceutical division, responded, in part, “we’re progressing fine. This is going according to our plans. We’re not disclosing the number of patients that we have on product for the time being, but the uptick is exactly going according to plan and we’re happy.” He added that it’s “in line with expectations.”

“My gut tells me that the population meeting the criteria is too small to drive any type of preferred UM program, unless Roche is offering a major rebate on top of the lower cost (which would go against their philosophy in the past),” Wong tells AIS Health.

Both Firms Are Developing CDxs

Interestingly, Bayer is working with Roche-owned Foundation Medicine on a companion diagnostic for Vitrakvi, while Genentech/Roche are working with that same company on a companion diagnostic for Rozlytrek.

In its press release announcing Rozlytrek’s approval, Genentech said that it “is leveraging its expertise in developing personalized medicines and advanced diagnostics, in conjunction with Foundation Medicine, to help identify people with ROS1 and NTRK gene fusions. Foundation Medicine will submit FoundationOne CDx to the FDA for approval as a companion diagnostic for Rozlytrek.” The companion diagnostic is approved in Japan for NTRK fusion detection but not for ROS1.

According to the Xalkori website, there are three FDA-approved ALK companion diagnostics, including FoundationOne, and one approved for ROS1, the Oncomine Dx Target Test from Thermo Fisher Scientific Inc. Various processes are available to confirm an NTRK fusion, but so far, the FDA has not approved a test for this use.

Roche did not respond to an AIS Health request for comment on whether its companion diagnostic for Rozlytrek, if approved, could be used for Vitrakvi as well.

“I am assuming that the Foundation Medicine NTRK test will not be specific for Rozlytrek only, but is actually applicable for both medications,” says Wong.

Contact Wong at w2sqgroup@gmail.com.

by Angela Maas

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

New Migraine Class Upends Payers’ Calm

October 25, 2018

For years, clinicians have mostly prescribed generic prescription drugs to treat migraines. But a new class of relatively high-cost specialty biologic products is threatening to upend payers’ calm. The upshot, pharma industry experts say, is insurers and PBMs are proceeding with caution and focusing on utilization management to ensure the proper use of Aimovig (erenumab-aooe) from Amgen, Inc. and Novartis AG, Teva Pharmaceuticals’ Ajovy (fremanezumab-vfrm) and Eli Lilly and Co.’s Emgality (galcanezumab-gnlm) the first FDA-approved products in this emerging class of drugs known as calcitonin gene-related peptide (CGRP) inhibitors.

For years, clinicians have mostly prescribed generic prescription drugs to treat migraines. But a new class of relatively high-cost specialty biologic products is threatening to upend payers’ calm. The upshot, pharma industry experts say, is insurers and PBMs are proceeding with caution and focusing on utilization management to ensure the proper use of Aimovig (erenumab-aooe) from Amgen, Inc. and Novartis AG, Teva Pharmaceuticals’ Ajovy (fremanezumab-vfrm) and Eli Lilly and Co.’s Emgality (galcanezumab-gnlm) the first FDA-approved products in this emerging class of drugs known as calcitonin gene-related peptide (CGRP) inhibitors.

According to Mesfin Tegenu, R.Ph., president of PerformRx, LLC, a Philadelphia-based PBM subsidiary of the AmeriHealth Caritas Family of Companies, there have been few approved migraine treatments in the last decade. Current treatments supported by clinical evidence “include beta blockers, tri-cyclic anti-depressants and some seizure medications,” Tegenu says. “These are utilized for prevention of migraine episodes only and not for stopping or reducing the duration of a current migraine. Most of these agents are relatively inexpensive generic medications.” Many plans also cover alternative therapies for migraine treatment, such as acupuncture and massage therapy, he notes.

The situation changed in mid-May, when Aimovig got the regulatory greenlight in the U.S., followed by the September approvals of Ajovy and Emgality. This new class of CGRP medications has the potential to be used in episodic and chronic migraines, a limited population within the overall migraine patient population, explains April Kunze, Pharm.D., senior director of clinical formulary development and trend management strategy at Prime Therapeutics LLC.  

“The clinical data shows the drugs decrease monthly migraine days by about two days per month. Because it is a new class of drugs with limited data and launching at a high cost relative to other migraine drugs, which is largely a generic market, many [PBMs] will likely have utilization management criteria to help ensure [their] proper use in the correct patient population,” Kunze tells AIS Health.

As more CGRP inhibitors come onto the market, this “will increase the competition within this class, and there will likely be preferred products selected based on varying pricing strategies,” Kunze notes. All three drugs have a $6,900 annual price tag.

Competition Could Trim Costs

Tegenu agrees that CGRP competition “may mean the opportunity for unit cost reduction.” While the new drugs’ price is less than some analysts’ estimates, it is “obviously much higher than the generic products currently used for prevention,” Tegenu says. PerformRx pays considerably less for existing comparable generic products: $10 per month, or $120 annually, for Topamax (topiramate) and $11 per month, or $132 yearly, for propranolol or amitriptyline.

“To date, there are no head-to-head clinical trials between CGRP inhibitors and ‘traditional’ migraine prevention medications,” he notes.

According to Tegenu, PerformRx is managing the costs related to the new class of CGRPs for migraine prevention in a typical manner. “These drugs follow our standard procedure, which is to be reviewed at a P&T committee meeting for consideration and formulary placement recommendation,” he says.

“The current standard of practice is to require a trial of clinically appropriate first-line agents, many of which are generic medications that have been in use for quite some time. In addition, we require the patient be seen by a specialist and have the appropriate diagnosis.”

He adds that, like most specialty medications, CGRPs will require a prior-authorization review prior to approval.

In the end, Tegenu says migraines are a fairly common disorder “so we want to make sure these medications are being used appropriately. The clinical data appears promising.”

“For members that continue to have episodic migraines and do not adequately respond to traditional therapies, these medications provide another treatment option,” he says. “However, I hope drugmakers will re-think their drug pricing strategy.”  


Welcome to Spotlight on MMIT Solutions

Welcome to the first issue of Spotlight on MMIT Solutions, a new publication intended to help MMIT users get to know our company better. It features the latest enhancements to our applications and analytical tools, the newest findings in our research on market access, and a closer look at MMIT employees. This publication is a companion to Spotlight on Market Access, which aims to provide readers with an actionable understanding of the pharma and payer worlds and will cover key catalysts and trends in the market. Together, the two Spotlight publications shine a light on the rapidly changing health business landscape and ways MMIT applications can help leverage those changes. “The clinical data shows the drugs decrease monthly migraine days by about two days per month. Because it is a new class of drugs with limited data and launching at a high cost relative to other migraine drugs, which is largely a generic market, many [PBMs] will likely have utilization management criteria to help ensure [their] proper use in the correct patient population,” Kunze tells AIS Health. As more CGRP inhibitors come onto the market, this “will increase the competition within this class, and there will likely be preferred products selected based on varying pricing strategies,” Kunze notes. All three drugs have a $6,900 annual price tag.



Migraine Class: MMIT’s Take

“Aimovig is the first in a new class of migraine treatments,” says Wade Carter, a vice president at MMIT. “It’s interesting to see where coverage is filling in more quickly than where I would have initially anticipated.” He adds, “There’s a modest rebate on Aimovig right now. At that price point, I’d be very interested in [the product.]”

“Amgen has an apparent head start on the other products launched in the class, but it will be exciting to see how patient access and uptake play out in this class over the next six to 12 months,” Carter explains.

“All products seem to be launching with $0 or very low copay offers for the first 12 months of therapy. Historically, these programs are shunned by the payers, so it’s another interesting area to monitor as the payers are laying out their policy and restrictions for the class.”






MMIT Tracks Biological vs. Non-Biological Policy Variance for Immunology Indications

In response to changing market access strategies, MMIT has restructured the Duration of Step Failure field in PAR data used to track step therapy for six immunology indications:

✦ Ankylosing Spondylitis (AS),

✦ Crohn’s Disease (CD),

✦ Psoriasis (PSO),

✦ Psoriatic Arthritis (PsA),

✦ Rheumatoid Arthritis (RA), and

✦ Ulcerative Colitis (UC).

We previously used one field to track the duration of step failure for these indications. Now that single field is represented by two fields that allow clients to track step-failure metrics based on biological branded products vs. conventional non-biological products like methotrexate.

Many payers are documenting a specific length of time to satisfy step-therapy restrictions for immunology products. Specifically, they are establishing different duration requirements for biologic vs. non-biologic products.

Indication-specific coverage policies and restrictions are increasingly common in the immunology space, and MMIT pharmacists observed that the trend toward varying step duration requirements began ramping up about 18 months ago.

The new PAR fields allow clients to observe differences in step duration across indications, since duration requirements might be more common for plaque psoriasis, for example, compared to a more debilitating chronic condition like rheumatoid arthritis. Step therapy restrictions are a primary barrier to access in immunology indications, and this is complicated by the fact that there are many different mechanisms of action. As a result, a one-size-fits-all policy on duration of step therapy is likely to ensure that patients get access to the most cost-efficient, effective product.

MMIT experts explain that immunology, especially rheumatoid arthritis and psoriasis, is a leading cost center for payers and pharmacies, so it makes sense for them to experiment with more detailed policies and restrictions. Pharmaceutical companies can benefit from insight into these additional layers of restrictions. If a payer has a step duration requirement that is significantly longer than other payers for a specific drug, that’s a potential negotiating point. If a product is third in line after a couple of short-term steps, drug companies need to compare that to being second in line after a long-term step requirement. Step durations for biologics can vary widely, so the details matter.

Fields Could Help Drive Communication

This data enhancement allows for a more thorough picture of access for immunology products — even when plans do not specify how long a trial should be, that lack of documentation is useful information. Insights gained from this new data can translate into more informed payer communications that result in better access and outcomes for immunology products. Clients can also use this information to estimate how long a trial and failure of any given drug might take.

This is the second time MMIT has implemented step duration fields; this method of viewing PAR data has already been implemented in the PCSK9 class.

Findings from the initial research on the new fields for immunology indications show that the time is right for pharmaceutical companies to access and deploy these insights to gain optimal market positioning. While payers are not yet consistent in documenting specific duration requirements, MMIT will continue to proactively research these requirements and future planned update will feature new step duration data from Express Scripts and CVS.

For specific questions about this new data enhancement or other MMIT product features, please contact MMIT support at support@mmitnetwork.com.  



Reality Check: HIV

Our Point of View

The HIV treatment space includes good pharmacy benefit coverage for most products. Quantity limits are commonplace, and prior authorizations (PAs) usually require an HIV diagnosis. Because anti-retrovirals are a protected Medicare Part D class, AIDS Drug Assistance Programs and Medicaid carve-outs also impact coverage. Many commercial formularies implement PA or step-therapy restrictions for less than 10% of total lives, while health exchange formularies see utilization management policies for nearly 25% of lives. Manufacturers of products in this class do find specific pockets of advantaged access where they are able to promote and gain an edge over competitors.  




A review of commercial market access across these three key HIV treatment groups shows the nature of coverage for payer-controlled pharmacy benefit lives. Over the past two quarters, restrictions on protease drugs actually decreased for commercial lives.


A breakdown of PAs across the three major HIV treatment categories shows the differences across this class. PA policies remained stable, besides an increase in the percentage of restrictive policies for transcriptase products.



AIS Health’s View

Since the first antiretroviral therapies were approved in the 1990s, the FDA has approved multiple other HIV treatments that have improved the lives of people with the virus. In 2012, the agency approved Gilead Sciences, Inc.’s Truvada (emtricitabine/tenofovir disoproxil fumarate) as the first drug aimed at reducing the risk of sexually acquired HIV infection for individuals at high risk of being infected. The FDA recently approved the first generic version of that drug, from Teva Pharmaceutical Industries Ltd. But following a patent lawsuit, the companies reached a confidential settlement, so it’s unclear when the generic might come onto the U.S. market. According to Lynn Nishida, area vice president, Solid Benefit Guidance, “this generic would likely gain a swift uptake by plans, largely because of one-to-one substitution for existing populations and new patients taking Truvada for PrEP and post-exposure prophylaxis. The degree to which plans will place prior authorization on the brand to divert prescriptions to the generic will likely depend on how fast the price of the generic falls relative to the brand as multiple manufacturers bring their generic versions to market.”  


Trends From AIS Health

New Generic HIV/AIDS Drugs Likely Won’t Have Large Impact

Several new generics for HIV/AIDS are on deck for the U.S., sparking hope among some observers that overall costs for the drug class will fall. But most of the generics are not expected to create significant disruptions in plans’ formularies for the HIV/AIDS class due to the complexity of HIV/AIDS treatment and the current practice of using once-a-day combination therapies, insiders tell AIS Health.

From AIS Health’s RADAR on Drug Benefits

Magellan Report Shows Double-Digit Medicaid Specialty Cost Growth

In 2015 and 2016, specialty net cost per claim had double-digit growth in the Medicaid FFS space, according to a new report from Magellan Rx Management. HIV/AIDS therapies led the specialty net spend for the second year in a row, with the average prescription net cost rising by almost 30%.

From AIS Health’s RADAR on Specialty Pharmacy

UnitedHealth Draws Fire on Truvada Policy; Are Other Plans Walking a Fine Line?

UnitedHealthcare recently took heat on a coverage policy for Gilead’s HIV drug Truvada (emtricitabine/tenofovir disoproxil fumarate) that patient rights groups said was designed to steer HIV or potential HIV patients away from joining — or staying — in their plan. This growing pattern of requiring PA every three months for Truvada among some health plans — along with placing HIV, MS and other costly drugs and their generic equivalents on the highest tier — is drawing more attention.

From AIS Health’s Health Plan Weekly  


Key Findings

Major Market Events Coming and a Robust Pipeline

The HIV indication has a full pipeline: According to a report released in June 2017 from the Pharmaceutical Research and Manufacturers of America (PhRMA) in partnership with The AIDS Institute, 52 medicines and vaccines to treat and prevent HIV are in the drug pipeline. The products include 32 antiretrovirals and antivirals, 16 vaccines and four cell therapies, says PhRMA. The pipeline consists of a variety of compounds across the five core groupings, as well as “booster” drugs, fixed dose combinations and a potential new “maturation inhibitor.” New therapeutic options continue to enter the market each year, including some generics of single agents that are losing patent protection.  

Payer Contracting Dominance

Contracting is prevalent for drugs in the same HIV grouping, with most activity focused on tiering preference. Dozens of HIV/AIDS treatments on the market create a crowded landscape. Based on specific patients needs, products segment into multiple product groupings, helping to ease the density. Payers cover most products equally across the board with one or two treatments leading each main category with more preferred market access.


AIS Health’s View

New generic entrants for the treatment of HIV are hitting the U.S. market, prompting hope that overall costs for the drug class will decline. For example, Mylan N.V. launched a generic version of Bristol- Myers Squibb Co.’s Sustiva (efavirenz) on Feb. 1, and Teva launched a generic version of Gilead Sciences’ Viread (tenofovir disoproxil fumarate) on Dec. 15. Both are mainly used in combination therapies with other drugs that still have patent protection. But for the most part, analysts don’t expect the therapies to have a significant impact on benefit designs due to the complexity of the treatments and the current practice of using once-a-day combination therapies. “While the prospects of more generics becoming available for HIV drugs is exciting, significant uptake of generics will likely be challenging due to HIV treatment regimens that require triple and quad medication therapy cocktails,” says Lynn Nishida, area vice president, Solid Benefit Guidance.

With QALY Use Rising, Manufacturers Can Use Value Assessments to Their Advantage

October 25, 2018

As payers struggle to keep their drug costs down, many are turning to independent health technology assessment organizations as a source of information. Various surveys show that more and more pharmacy and therapeutics (P&T) committees consider this information valuable and are turning to organizations such as the Institute for Clinical and Economic Review (ICER) to help make formulary decisions. And while many manufacturers may take issue with the way some assessments are conducted, there are steps they can take to have more of an influence in how their drugs are perceived.

As payers struggle to keep their drug costs down, many are turning to independent health technology assessment organizations as a source of information. Various surveys show that more and more pharmacy and therapeutics (P&T) committees consider this information valuable and are turning to organizations such as the Institute for Clinical and Economic Review (ICER) to help make formulary decisions. And while many manufacturers may take issue with the way some assessments are conducted, there are steps they can take to have more of an influence in how their drugs are perceived.

For years, many countries outside the U.S. have used quality-adjusted life years (QALYs) to help determine whether they will extend coverage to a drug. As U.S.-based payers struggle to rein in the costs of pharmaceuticals, they are increasingly turning to evaluations by health technology assessment organizations, and ICER, which uses QALYs to assess products, appears to be the most popular one.

Following a 2017 ICER report on rheumatoid arthritis therapies, Decision Resources Group (DRG) surveyed MCO medical and pharmacy directors on tactics they would use to control their spending in RA. More than half said that “they expect to set reimbursement criteria for emerging therapies based on the ICER analysis,” according to a DRG blog (see chart, p. 18).

And in a Sept. 20 article in Managed Care, ICON plc’s Nathan White, senior vice president; Adam Johns, senior principal; and Eric Latch, analyst, wrote about a survey their firm conducted this year of more than 20 payers. According to the article, “more than three quarters of respondents said that they would use an ICER cost-effectiveness threshold as a basis for negotiating a rebate contract. More than a third said it was likely or extremely likely that they would request a rebate to match the net ICER cost effective price. And a similar proportion said they would request a rebate worth more than 50% of the difference between the product list price and the ICER-assessed cost-effectiveness threshold, although payers indicated that this would be capped when actual rebates approached ‘double digits.’

“Judging by these survey results, ICER’s numbers are, at the very least, serving as important starting points for the consistently tense negotiations between drugmakers and payers,” wrote the authors, who are all in ICON’s global pricing and market access practice.

They also compared the wholesale acquisition costs (WACs) of almost 40 products with their prices at $150,000 per QALY. If drugs with WACs larger than the QALY threshold lowered their prices to meet it and drugs below the threshold raised their prices to be in line with it, total annual expenditures on the therapies would decline $6.2 billion.

According to Lisa Kennedy, Ph.D., chief economist at Epiphany, a company that performs health economics, reimbursement and market access studies, “the best thing that a value framework can do is bring all the evidence together — especially clinical, safety and tolerability — not just clinical trials but real-world evidence — into one place so that all treatment options can be evaluated. A large number of payers have told us that this is the most useful part of value frameworks. This is hard to find and can help physicians, payers — and increasingly patients — make more informed individual choices on treatments.”

“I think payers within their own health plans…just don’t have the breadth of data that these other organizations are able to tap into to do their various health economic data analyses, so they are looking for an unbiased view informed by a really robust set of data beyond the claims data that a payer might have” or the patient records that a provider would have, says Peter Gilmore, a principal at KPMG Strategy.

In addition, says Stephanie Kennedy, Ph.D., senior engagement manager at Precision Xtract, “External unbiased validation supports value-based decision-making, particularly when management and coverage choices may be challenged by employer groups, patients, advocacy groups, and physicians. This can be extremely helpful if the issue is controversial, as it provides the external support from a group that is not funded by the manufacturer or a payer. A second advantage occurs where a payer may be resource- constrained. In such a situation, the valuation organization may have access to expertise and resources that would otherwise be unavailable to the payer.”

QALYs Are Complicated

However, some criticism of the QALY methodology exists. QALYs, says Lisa Kennedy, are “as complicated as the concept sounds. The purpose of using the QALY is to be able to compare all innovations with a common unit of benefit. The problem is that QALYs are hard to understand and exhibit extraordinary methodological and practical problems: They aren’t reliable across the same patients over time, across different patients and, additionally, fall down when required to measure more difficult things such as QALYs in the elderly or the very young. QALYs are often mapped from quality-of-life measures collected in a trial. What can happen is that the quality-of-life instruments used are not sensitive enough to capture meaningful change for the patient.”

A recent Milliman white paper sponsored by the Pharmaceutical Research and Manufacturers of America (PhRMA) outlines various problems with ICER’s cost-effectiveness analyses, maintaining that there are “several disconnects between ICER’s work and its potential use by private payers.”

David Whitrap, a spokesperson for ICER, responds that “The core question here — do payers find ICER’s work to be useful — is best answered by payers, not PhRMA,” and points to the ICON survey. “Health economists in the U.S. and around the world have yet to find a better metric to measure a treatment’s benefit to patients than the QALY. Critics sometimes decry the QALY as a way to measure the ‘value of a patient, but what it’s really used for is measuring the ‘value of a treatment,’” he tells AIS Health. “Because the QALY records the degree to which a treatment improves a patient’s life, people that begin treatment with a lower baseline health — whether through a disability or serious illness — provide medicines the greatest opportunity to demonstrate more QALYs gained. Relatively, it is far more difficult for treatments that target very healthy patient populations to demonstrate many QALYs gained.”

Yet although “one might argue with the methodology” used to assess value, Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates, tells AIS Health, “the fact of the matter is that this is a step in the right direction for the United States, where pursuing value is something of a new thing that has had difficulty getting established — and in light of a health care cost trend which regularly exceeds CPI-U [i.e., Consumer Price Index for All Urban Consumers], and which likely holds down wage increases since employers look at the whole ‘package’ of employee costs. When other package costs rise faster, then wages have less room to rise.”

Rubinstein tells AIS Health that “criticism of evidence-based review, whether at the population level or the treatment decision level, is important because it keeps all concerned alert to how to improve — but this criticism does not challenge the importance or existence of evidence-based review. While still evolving as to method, evidence-based review is necessary to improve clinical outcomes and reduce variability that has insufficient basis, while stretching available resources.”

So what can manufacturers do to impact how their drugs are perceived in these value assessments?

Gilmore points out that in clinical trials, manufacturers often study endpoints that are focused on gaining FDA approval but often “are less valuable to payers.…It’s not that they’re completely irrelevant, but they don’t get at the heart of the matter, which is how can I as a payer or provider assess the outcomes the drugs lead to versus the costs? And also factoring in other drivers of cost beyond drug – how do all these interventions work together? Pharma companies aren’t really set up to study that, but they can think about interesting clinical trial designs that reflect real-world clinical practice. They can rethink some of the outcomes that they’re tracking, even if they’re secondary in nature, that are more relevant to payers.” Without those data, assessments will be forced to make assumptions about them based on the endpoints that the company actually studied, which can lead to questions about the validity of the assumed numbers.

“In the emerging value-based care environment, manufacturers will need to proactively build their own budget-impact/cost-effectiveness models and their own data to stay in control of their product’s value story,” agrees Tricia Garland, engagement manager at Precision Xtract. “In the development phase, they need to carefully study the frameworks that currently have traction, such as ICER, to determine what type of data most effectively move the needle in those assessments and invest to display their data in that way. This means they will need to think through gathering payer-relevant evidence beyond the traditional endpoints. For example, cost- and quality-related metrics, such as a reduction in hospitalizations, etc., will likely gain greater importance in terms of how payers value treatments.”

“The more that manufacturers can directly study relevant health economic endpoints, the better off they’ll be in communicating the value,” Gilmore tells AIS Health. However, he adds, “that’s easier said than done and introduces a lot more risk to a clinical trial program. You risk also not focusing on the endpoints that matter most to regulators, and drug developers are first and foremost interested in getting their drugs approved, so it’s sort of a balancing act.”

For manufacturers that set “endpoints focused on health economic relevance and that really show demonstrable health economic value,…and their competitors don’t, they certainly have an advantage” until those competitors can produce similar data, maintains Gilmore. “Early movers with good data who introduced more risk by setting endpoints that were most value to payers will often be rewarded with differential pricing and formulary positioning versus competitors.”

According to Todd Edgar, Pharm.D., senior vice president, payer access solutions at Precision for Value, “Manufacturers have significant opportunities to influence the perception of their products with respect to value assessments.”

One way is to “model how their products will likely ‘score’ in these different frameworks. If done far enough in advance, this information can be used to inform their pricing discussions. As the product gets closer to approval, some of the organizations have a formalized process for manufacturer input,” allowing drugmakers to weigh in on their product’s perceived value. “Finally, many manufacturers have prepared ‘rebuttals’ to valuations, in which they explain the perceived shortcomings of the assessment and offer an alternative view as to the value of the product,” he tells AIS Health.

“Before or during launch a manufacturer has worked in a given disease and the design of trials for that disease for years — they might arguably be the world leading experts into research in that indication,” says Lisa Kennedy. “In this case, manufacturers can work with those developing value assessments to ensure that trial data, endpoints comparisons, costs, quality of life measures, etc. are designed, assessed and modeled correctly. This is extremely important — many of those who work in value frameworks assessments have not worked in the therapeutic area before or, alternatively, have outsourced this to an academic institution such that a professor’s student researchers are assessing the evidence and modeling the disease but can be light on the disease context.”

“Manufacturers should continue to monitor the environment to see if one framework is ‘winning,’ as this will dictate the rules that they need to play by in the future,” Garland recommends. “Manufacturers should really look to align with physician and patient groups to ensure that all of these groups have a seat at the table in terms of how ‘value’ is measured. This means having public engagements with these value framework groups to provide alternative viewpoints when appropriate with these value frameworks’ methods.”

It’s beneficial for a manufacturer to align a drug’s price within the ICER QALY benchmark. Sanofi and Regeneron Pharmaceuticals, Inc. did this at the launch of their atopic dermatitis drug Dupixent (dupilumab), as well as with their PCSK9 Praluent (alirocumab) almost three years post-launch. “If an assessment proves to be positive, this is excellent — there are some products that have been recently seen as ‘responsibly priced’ and praised by groups such as Express Scripts — this could be a real advantage for manufacturers in payer negotiations,” Lisa Kennedy tells AIS Health.

Per the ICON authors, “We recognize that payers have a major opportunity now to use ICER pricing to their advantage, especially as drug rebating is becoming increasingly unpopular in public perception. In pricing wars, they will be able to wield ICER’s numbers as weapon, as demonstrated by CVS Health’s recent announcement that their employer group clients will be able to create formulary exclusions based on ICER pricing. The flip side is access and pricing challenges (but also some opportunities) for manufacturers.

“We expect contracting negotiations to be significantly affected by ICER assessments in the coming years,” they continued. “Manufacturers need to be prepared to reconcile their economic evaluations with ICER’s. If they don’t, manufacturers should be prepared to counter payer pushback that is bristling with cost-effective evidence and value positioning.”

View the ICON article at https://tinyurl.com/y7yrkp4n, read the DRG blog at https://tinyurl.com/ybrhuqhb and download the Milliman white paper at https://tinyurl.com/y75d7f4o. Contact Edgar, Garland and Stephanie Kennedy via Tess Rollano at trollano@coynepr.com, Gilmore through Bill Borden at wborden@kpmg.com, Lisa Kennedy at lisa.kennedy@epiphanomics.co, Rubinstein at elan.b.rubinstein@gmail.com and Whitrap at dwhitrap@icer-review.org.

by Angela Maas


Pharma Company Collaborations Have Multiple Aspects to Manage for Success

When manufacturers choose to collaborate on a drug, there are numerous aspects of that partnership that will need to be settled, as well as potential challenges that need to be managed. Still, multiple companies have successfully negotiated such arrangements and can offer insights for others.

“A lot of times, deals are done on a global basis, spanning lots of countries,” says Peter Gilmore, a principal in the life sciences practice at KPMG Strategy. “And oftentimes, when you’re dealing with governmental payers,…you can only have one manufacturer going” to pricing negotiations, so companies will need to decide who will take the lead. “All of this tends to be done up front. There’s a whole business development cycle, where they’re going through the contracting of who’s the one who originally owned the drug, and then what other obligations will the partner have from a commercial perspective. A lot of times, there’s a lot of detail given around who’s going to actively market the drug, what the sales force structure will look like, who’s paying who what under promotion activities for the drug.…It depends on the nature of the deal.”

Sometimes a company that owns a drug will partner with another firm with an eye on getting support for commercializing the product, he says. In other situations, a smaller biotech firm that owns the product may partner with a larger company that has “much more clout and can even do portfolio-level contracting,” and so the smaller firm may defer to its partner that has more negotiating power. “It really just depends on the nature of the two parties that are collaborating.”

Conversely, sometimes in a partnership between two companies that vary in size, the drug involved may be “a specialized product, and the smaller company actually has the sales force,” says Ira Studin, Ph.D., president of Stellar Managed Care. “But the bigger company is better positioned to work the payer space and drive contracting. They’re going to make a functional decision based on the core competencies that each of the partners has.”


Oncology Combination Therapies Are Posing New Challenges for Drugmaker Collaborations

While deals involving drugmakers collaborating on a drug are not new, there is one growing aspect of pharma collaboration that companies are starting to grapple with, according to an industry source.

“The less-chartered territory is one we’re seeing increasingly in oncology and other rare diseases where expensive drugs are being used in combination with each other,” says Peter Gilmore, a principal in the life sciences practice at KPMG Strategy. “That’s where alliance management and these deals between manufacturers get a little more complicated.”

“Most manufacturers are trying to combine their oncology products with immuno-oncology products,” with the two largest brands being Merck and Co.’s Keytruda (pembrolizumab) and Bristol-Myers Squibb Co.’s Opdivo (nivolumab), he says. “If you look at how many clinical trials each of those drugs has, they’re in the hundreds, often in combination with another manufacturer’s drug. They’ll start off by doing co-development or a supply agreement. Where it gets tricky there is that the rules for how to market combination therapies are not as well-cemented or well-established as collaborations around individual molecules.”

“One of the major complications that happens is that usually one of the drugs in the combination, such as Merck’s Keytruda, is already approved; it already has a price. They already have a sales force that’s marketing this thing,” points out Gilmore. “Then you get a drug that’s layered on top of it by another manufacturer, where even the label references Merck’s drug, and they may not have a commercialization agreement. There they might actually be at odds with one another because Merck would love the increased volume that comes as a result of this combination being approved but doesn’t want to have its price re-evaluated because it’s got this new approval.”

“I think that’s where we’re starting to see a lot of disputes, in combination therapies,” he says. “I don’t think people have cracked this code yet across manufacturer combinations.”

Contact Gilmore through Bill Borden at wborden@kpmg.com.


“Typically what happens is you have the one manufacturer who has the molecule, the protein, the science, and they’re entering into a collaboration because they want to spread the risk,” says Studin. “It may be that their partner is going to end up underwriting a large portion of the pivotal trial. Later, there’s going to be one company that may have the sales staff with the size and focus to deliver a clinical message to physicians and hospitals that the other company doesn’t have. So one of the decision factors just from a functional standpoint is who’s better equipped to engage the provider community.” He compares it to the old expression often used with managed care: “If you’ve seen one partnership, you’ve seen one partnership.” When the duties are divvied up, it depends upon the “strengths of each of the partners because they don’t want to reinvent the wheel.”

Gilmore explains that sometimes drugmakers form a joint venture company to handle these kinds of arrangements. “Within the alliance management, generally one company will take the lead on a certain set of commercial activities, and they’ll report back to the alliance management committee.…It really just depends on who owns the molecule, who’s driving development of the molecule, what the commercial terms of the deal are.”

As far as deciding who goes to providers, “a lot of times deals are done between two companies because one lacks a sales force that is already targeting the relevant physician specialty and/or provider accounts,” Gilmore tells AIS Health.

In other situations, it depends on “who has the sales force that’s best positioned in terms of numbers and skill sets. One player may have a hospital sales force but not a physician sales force,” points out Studin. “It comes down to core capabilities. One player may have a stronger medical science liaison team than another. Another may have stronger medical directors.”

Asked how much of an influence the therapeutic area a drug is in influences the decision making, Gil-more explains that companies will have areas of focus within their portfolios, such as oncology, neuroscience and diabetes. “So often the collaboration deal comes about between these two parties because one is more skilled and advanced at commercialization activities around that specific disease state.”

For example, if a manufacturer has historically been stronger in oncology and its partner has historically been stronger in hepatitis C, and now the hep C player all of a sudden has an oncology product, the company with the new oncolytic may give greater latitude with some aspects of the co-marketing to the oncology player.

Of course, as with any partnership, disagreements are bound to arise. “You have to assume there are going to be disagreements,” Studin tells AIS Health.

According to Gilmore, “Typical disagreements have to do with level of resourcing. Nobody wants to outlay a lot of cash without having good visibility into the profit and then control over the activities to get to the profit. So the biggest points of disagreement are on control — everybody wants control over what the sales force does, what the promotional materials look like and so forth if you’re spending money. And so then that’s where we’ve seen the creation of alliance management organizations, which bring together the parties, and they operate as a joint marketing team making joint decisions. I think what could be done to avoid disputes is having a solid alliance management governance structure approach and processes for making big decisions.…It’s important up front to call out how governance is going to work within the alliance and who’s going to make the decision, especially on the deployment of resources around field force and promotional activities.”

Once the drug has launched, “the alliance management organizations…become pretty important for making tactical decisions along the way,” maintains Gilmore. “Oftentimes they get into disagreements on how big their sales force should be and where it should be deployed and the nature of the promotional activities, and then they often have to change based upon what they’re learning in the first few months of launch. So the alliance management team is critical in making a series of tactical decisions, but you need a governance process to specify who ultimately makes the decisions,…or else you’re going to be in decision paralysis for a while.”

Another issue that companies will need to reach an agreement on is the ad campaign and the brand development. “I’m sure that’s going to command considerable attention. You’re going to need to be out there a while, get your feet wet, and it could be year two, two-and-a-half, the dollars are poured in big time to advertising,” says Studin.

In addition to making decisions post-launch “on the sales force and detailing of the product, what’s the mix between the two companies? Oftentimes there will be sales forces working in parallel,…and so there’s careful coordination that has to go on because you don’t want to call on the same doctor about the same product from two different companies. There has to be coordination in the field.”

Gilmore points out that “there can also be disagreements about how one company might position the product second or third in the bag, as they say, and that’s just the level of priority in time that they spend detailing doctors about the product. And the other company might have it as its top priority, and so between the two figuring out the relative priorities when you’re detailing the product seems to be important because sometimes a company may neglect or deprioritize talking about a product it’s partnered with, and that often leads to conflicts. So coming to a consensus on the relative priorities is important. The level of spend on promotional activities outside a field force and the messaging and look and feel of all that promotional material is another thing that they often have to decide.”

When it comes to handling a product recall, Risk Evaluation and Mitigation Strategies and patient support assistance programs, “usually one [company] will have responsibility even through it’s an alliance,” says Gilmore.

“Oftentimes they’re also collaborating on the life cycle plans of the drug. If they’re going to cooperate on development of new indications and eventual launch of those new indications, that’s a major important piece,” he says. “With that, [there may be] additional studies that they’re going to run together, because one company can’t just decide to start a study without the other company saying yes or no because that could impact the commercial value of the product. But then again, in certain deals, the one who owns the molecule may have said, ‘Oh, we’re just collaborating on this one indication; we reserve the right to do what we want to do with the molecule in other disease states or indications. There are so many categories of consideration when you’re setting up the deal between two companies.…It can get quite complicated.”

Although deals involving pharma companies collaborating on a single drug have been done for decades within the pharma industry, “some people still get it wrong, and it’s not easy, but there are proven models for how to do it and do it efficiently,” states Gilmore. “There are clearly a lot of decisions that partners need to make on the level of control, the level of investment they want to have. There’s a lot of back and forth, and that’s why some deals fall through: They can’t reach an agreement.”

Contact Gilmore through Bill Borden at wborden@kpmg.com and Studin at istudin@stellarmc.com.

by Angela Maas


RWE Data Are Helping Advance Clinical, Commercial Objectives

Efforts to develop innovative, lifesaving medicines are always fraught with peril, and the clinical and commercial success of any investigational therapy is never guaranteed. Today, all stakeholders in the health care spectrum — pharmaceutical developers, payers, regulators, physicians and patients — are putting their money on the collection and analysis of many different types of real-world evidence (RWE) as a key enabling strategy, to close critical gaps in knowledge, give physicians and patients broader access to therapies and help payers realize the actual value of those therapies in improving health and reducing costs.

Traditional clinical trials — while still the gold standard for establishing a drug’s risk/benefit profile and appropriate dosing strategy — are not able to fully elucidate how the drug, once launched, will perform under messy, real-world conditions, where patient populations are decidedly more heterogeneous than those studied in the trial. To better assess the full clinical profile and economic impact of high-cost specialty medicines over time, efforts are underway to explore and exploit various forms of real-world data that can be collected during patient care. Then, analytic, modeling and simulation tools, including artificial intelligence (AI) and machine-learning methodologies, can derive meaningful insights from those data.

But the process of using RWE is far from straightforward. Since all data are not created equal, a variety of industry stakeholders are developing standardization frameworks in an effort to establish some form of accountability and reliability, and thus foster greater confidence as RWE is being used to advance a variety of pharma and health care objectives.

Today, many data sources — some traditional, others emerging — are being used to improve insight during drug development. These include:

✦ Insurance claims and billing activities;

✦ Pharmacy and specialty pharmacy dispensing data;

✦ Electronic health records (EHR) data;

✦ Aggregated clinical lab-testing data;

✦ Genomic data;

✦ Patient registries related to specific diseases and products;

✦ Patient-generated data (such as from in-home, mobile and wearable devices and sensors);

✦ Patient-reported outcomes data;

✦ Behavioral data and insights collected from social media; and

✦ Purpose-built databases.

Third-party aggregators of data records provide another good source of RWE. For example, IQVIA owns a comprehensive, global data portfolio representing more than 530 million de-identified patient records across more than 10 markets, with more than 3,000 ready-to-use sources from EHR, hospital, pharmacy and claims data, as well as data related to genomics, mobile-health and patient-reported outcomes.

Similarly, the health care AI company Prognos claims to be the largest aggregator of laboratory data related to diagnostic testing. Its database, called The Prognos Registry, contains more than 13 billion de-identified, HIPAA-compliant clinical records, representing more than 180 million patients, from more than 140 commercial diagnostic clinical-testing laboratories, according to the company. This enormous cache — which continues to grow over time — spans many different pathologies, in 50 disease states.

Today, a variety of advanced modeling, simulation and AI capabilities are being used to analyze data from actual clinical practice to overcome the limitations of narrow or insufficient clinical trial data. Such efforts, according to Camie Britton, senior director, real-world data services, Parexel International, include:

✦ Mining unstructured data (for instance, from EHR clinical notes and sensors) for research purposes;

✦ Creating retrospective cohorts of patients to better understand how a drug works in a defined indication;

✦ Developing and validating algorithms based on EHR clinical notes or claims; and

✦ Using such algorithms to distinguish and characterize targeted sub-populations as a means of supporting future research.

“Two approaches are emerging in terms of how drug developers are using RWE — greater use of classical, hypothesis-driven research and the use of newer data-analytic tools including AI and machine-learning techniques that provide insight based on pattern recognition within vast data sets,” says John Doyle, senior vice president and general manager, real-world & analytic services, IQVIA, and faculty member, department of epidemiology, Mailman School of Public Health, Columbia University. “We should be looking at a hybrid approach, but we also need to challenge and ‘pressure test’ the pattern-recognition results and inferences that are being made about causation, to ensure that they are based on sound scientific principles.”

The second annual RWE benchmarking survey from Deloitte’s ConvergeHealth unit, released this summer, finds that 90% of global pharma companies either have or are building RWE analytical capabilities, and that applications range across the entire product life cycle for these undertakings.

Leverage Off-Label Prescribing Data

Once a drug has been approved and enters the marketplace, it is often prescribed to additional patient subgroups (beyond just the narrow patient cohorts enrolled in the clinical trial or specified in the approved label indication). The ability to study the medication’s performance in patients using it off label is important, as it will reflect how the product actually performs among a more heterogeneous patient population and thus can help to paint a broader picture of the drug’s full clinical potential.

In some cases, RWE findings from such patients can help the drugmaker seek and gain regulatory approval for additional label indications for that therapy and can help to inform clinical guidelines and other decision-support tools for use in routine clinical practice.

However, unlike the tightly screened patient populations enrolled in a formal clinical trial, patients seeking treatment for any condition in a real-world setting often have one or more co-morbidities and are already taking other medications that could lead to drug-drug interactions (DDIs). Those DDIs, coupled with unpleasant side effects or adverse events, affordability issues and other patient behaviors, often conspire to reduce the patient’s adherence to therapy, and poor adherence to therapy is one of the leading factors to undermine the clinical effectiveness and health outcomes that were demonstrated in the trial.

For many specialty drugs that are aimed at diseases with critical unmet medical need — particularly in oncology and orphan diseases — fast-track or conditional regulatory approval provides an accelerated pathway for regulatory approval. “Giving patients faster access to these drugs is fantastic, but fast-track approval leaves an unfinished story still to be told,” says Doyle. “RWE becomes the only option to round out that conditional approval, to demonstrate safety, effectiveness and tolerability across more diverse populations in real-world clinical settings over longer time horizons.”

Patient or product registries can yield data from a sufficient number of patients to enable statistically relevant subgroup analyses, and these findings can be used to seek expanded label indications and help demonstrate the therapy’s full value proposition to payers and health technology assessment (HTA) organizations. “Such examples are exciting, and they are really happening today, but frankly these techniques are still being grossly underutilized in this space to validate, extend and complement the findings of these clinical trials,” says Doyle.

Meanwhile, Zhen Su, M.D., chief medical officer for North America at EMD Serono, Inc. cautions, “Monitoring how the drug responds in specific sub-populations in actual clinical settings can certainly help to elucidate who responds better to treatment, enabling drug developers to negotiate for label expansion for the drug. But drug developers must also be prepared for the fact that such efforts may also reveal patients who do not end up responding well over time, and this can lead FDA to shrink the label indication for that therapy.” This happened in June, when FDA announced it was restricting the use of Merck & Co.’s Keytruda (pembrolizumab) and Roche’s Tecentriq (atezolizumab) in first-line bladder cancer to patients who express high levels of programmed cell death ligand-1, revising the labels for both drugs to include a requirement for testing for PD-L1 expression. Treatment continuation can then be considered for patients responding to the drugs who are not eligible for cisplatin-containing chemotherapy, according to the FDA.

Insights Can Help With Clinical Trials

While RWE has historically been used to monitor post-launch safety and adverse events, drug developers are increasingly incorporating RWE-driven insights further upstream to improve clinical trial design and execution. For instance, RWE can be used to assess and validate specific biomarker hypotheses or to create a “synthetic” control arm based on RWE derived from historic or contemporaneous patients being treated in actual practice and then use that synthetic arm in lieu of an actual control arm during the clinical trial.

“The need for clinical trials to run a control arm often creates redundancy and added time and cost for the drug developer, and for some diseases and drugs, it’s unethical to put patients into a control arm of a trial,” says Su. “By comparison, the ability to create a synthetic control arm based on RWE can reduce drug-development costs and enable better treatment paradigms. This approach is especially helpful to improve and streamline the regulatory approval process for investigational therapies that are intended to address unmet medical need in rare diseases.” Su cites the example of Bavencio (avelumab), an immunotherapy developed by EMD Serono and parent company Merck KGaA for the treatment of metastatic Merkel cell carcinoma, saying, “Bavencio successfully used real-world data as a reference for efficacy because it’s a rare disease and thus trial enrollment was challenging.”

Similarly, RWE is also making its mark further downstream, to support regulatory submissions and/or later label expansions (for instance, to pursue additional indications, patient cohorts or clinical endpoints) and to inform negotiations with payers related to formulary placement, drug pricing and the negotiation of value-based contracts or outcomes-based agreements that tie reimbursement rates more explicitly to the performance of the therapy under messy real-world conditions.

“More than ever, drug manufacturers know the trial won’t provide the final evidence package — it’s just the first part of the entire package — and they know that the strategic use of RWE can enable a deeper understanding of value,” says Sarah Alwardt, Ph.D., vice president of health informatics and HEOR operations at McKesson. “Since everyone understands that clinical trial findings are limited, there’s a huge appetite for these types of retrospective studies using RWE. It’s a change in mindset that’s very exciting.”

The expanded use of RWE is already helping different stakeholders at different points throughout the biopharmaceutical product life cycle to expand and calibrate their understanding of the actual clinical effectiveness, long-term health outcomes, cost impact and risk/benefit ratios for various therapies, says Britton, who notes that the growing list of RWE-informed efforts includes:

✦ Identifying new drug targets and better biomarkers;

✦ Finding new uses for existing and late-stage products;

✦ Identifying undiagnosed, underdiagnosed and misdiagnosed illnesses;

✦ Identifying sites with higher enrollment probability and capability to aid clinical trial recruitment;

✦ Predicting patients who have higher risk for adverse events;

✦ Predicting medication compliance (or lack thereof) in defined patient cohorts (which can inform mitigation efforts); and

✦ Using AI and machine-learning techniques to recognize trends and patterns in social media and health care sensor data (to inform clinical study development and define study objectives, patient-relevant endpoints and study procedures).

“Post-marketing studies using RWE are more common now than ever,” notes Michael Fronstin, general manager, real world evidence, Kantar Health. “Early signal detection through observational studies of newly approved medications is critical to minimizing the potentially broad impact of an unforeseen risk, should a new drug prove to be unsafe within certain patient cohorts.”

Eli Lilly and Co.’s compound Emgality (galcanezumab-gnlm) is expected to receive FDA approval by the end of 2018 for the treatment of migraine headaches. To further understand the burden of migraine and the barriers that preventive and acute treatment options face, the manufacturer recently unveiled a study dubbed the ObserVational Survey of the Epidemiology, tReatment and Care Of MigrainE (OVERCOME). According to Eli Lilly, this two-year study will be the largest of its kind in migraine, gathering real-world data (RWD) from 40,000 patients.

By design, the patient population enrolled in any given clinical trial is limited, with targeted patient cohorts handpicked using strict inclusion and exclusion criteria, and enrollment tending to favor younger, healthier patients compared with the entire population in that disease category. Similarly, trial investigators are typically given formal training and required to follow consistent protocols for drug administration and data collection. Collectively, these factors help to greatly reduce variability as the clinical trials are carried out and thus allow the investigational therapy to show its best self in a trial population for whom co-morbidities and drug adherence issues have been eliminated or minimized.

By contrast, “when you have someone who is not being studied and poked and prodded in a highly controlled clinical trial, their outcomes will be different,” says Alwardt. “By studying data from real-world prescribing, you can dig into which factors are helping to drive improved outcomes in specific patient subpopulations. In other instances, the outcomes will be worse, and you can try to identify and reconcile the issues (such as co-morbidities, drug-drug interactions, dosing, complex administration or adherence issues) that may be to blame.”

“Historically, clinical trials have been primarily focused on efficacy and safety, but in recent times clinical effectiveness has risen as a key differentiator to be studied in the trial,” adds Fronstin. “Effectiveness comes in many forms, but is often associated with patient outcomes, which may be clinical, humanistic or economic in nature.”

“Real-world data, such as patient-reported outcomes (PROs), quality of life, disease progression and epidemiology, exposure patterns and factors driving effectiveness, can inform which parameters need to be captured in the trial design,” says Billy Amzal, MSc, MPA, Ph.D., senior vice president, real world decision & data analytics, Analytica Laser, a Certara company. “Patient registries and social media through opt-in surveys offer a good source of such patient preference data.”

“The patient’s perspective and preferences, captured through PROs, play a particularly important part of demonstrating value in rare diseases and childhood disorders, and focus groups involving patients and other stakeholders such as nurses and physicians, patient association members and caretakers can help to elicit what types of attributes the drugmaker should be looking for when designing the trial,” adds Sumeet Bakshi, MBBS, MBA, vice president, real world data solutions at Analytica Laser. However, he adds, “We find a lot of drug manufacturers coming to us very late in the design phase of a clinical trial, asking for us to identify the most relevant PROs.”

“To incorporate PROs into trials, drug developers are analyzing real-world data to identify specific patient populations that may be experiencing incremental burden or negative health outcomes as a result of their disease,” adds Fronstin. “Using this insight, patient-reported outcomes can help to shape the trial design.”

Similarly, while the drug’s ability to demonstrate a favorable risk/benefit profile within this limited patient cohort is sufficient to earn regulatory approval, this traditional approach often leaves more questions than it answers, in terms of whether the approved drug can be used in other patient cohorts that were not involved in the trials, such as pregnant women, elderly or pediatric patients, those with renal or hepatic impairment, those with unstudied co-morbidities and so on.

In the absence of trial-derived data, physicians are then left to prescribe drugs off label. This raises potential clinical and ethical concerns for physicians due to a lack of comprehensive data and often creates a situation where insurance coverage is restricted or denied, leaving patients to manage the entire cost burden of treatment.

“There are conversations happening today that have never happened before, and in clinical trial design, there is increased appetite among both drug developers and regulators to better understand that RWE can help improve trial design,” says Alwardt. For instance, she notes that “in oncology in particular, one of the clinical trial endpoints is almost always progression-free survival, but PFS is really hard to measure in the real world due to variation from doctor to doctor in terms of how they evaluate and capture such data.” Instead, getting more relevant, real-world endpoints into the clinical trial design will help to create a more powerful trial baseline and more realistic expectations for how the drug will perform once it enters the market.

RWE Boosts Value-Based Contracts

Innovative value-based contracting or risk-sharing agreements — formally called risk-based contracts or outcomes-based agreements — have been explored for a growing number of high-cost specialty medications. Such innovative contracting arrangements provide a mechanism for biopharma companies and health insurers to both put more skin in the game when it comes to managing the high cost or risk of today’s specialty therapies. Such arrangements aim to tie contracted drug prices and reimbursement rates more closely to actual clinical outcomes that are demonstrated by collecting and analyzing RWE from clinical practice. “The whole idea is to manage uncertainty at the time the manufacturers are committing to a given clinical performance for their drug and payers deciding for a price and reimbursement,” says Amzal.

According to Deloitte, 14 of the 20 companies polled in its RWE benchmarking survey are currently engaged in value-based contracting, although many industry observers note that drug companies and payers have tended to remain tight-lipped about publicizing such agreements, hoping to preserve their own competitive advantage. Such secrecy thwarts the sharing of lessons learned and undermines efforts to create a consistent framework or best practices to improve the data collection and expectations and to guide the complex negotiations that are needed to create a win-win for both sides through these innovative contracting schemes.

While interest in and use of RWE throughout pharma and health care continue to grow, many industry observers have expressed concern and frustration over the inherent variability and inconsistency of the RWE data sources that are increasingly being pressed into service. Such challenges, according to Britton, include:

✦ Heterogeneous data and lack of interoperability;

✦ Data incompleteness, inconsistency and inaccuracy;

✦ Data ownership and data-use agreement status;

✦ Data privacy regulation/patient-level authorization/ongoing patient consent management for RWD usage;

✦ Lack of data standards;

✦ Lack of standard unique patient identifiers to enable linking across data sources;

✦ Multiple data sources and the need for “big data” aggregation and “data lake infrastructure”; and

✦ Shortage of biomedical and informatics expertise to successfully leverage modeling, simulation and AI opportunities.

Similarly, Bakshi notes that investigators must be aware of the limitations of the available data and design any studies accordingly. “Claims data was set up to manage insurance claims — it was never intended to be used for conducting comparative effectiveness studies, but many are doing that today, so you have to identify the gaps and limitations.”

Many are calling for some type of industry standards or guidelines to set criteria for data consistency.

“The lack of comprehensiveness, consistent quality and standardization threatens to undermine trust and limit the full potential of using RWE to advance many objectives in pharma,” says Doyle. “Today with so many parallel efforts, the use of RWE is being democratized, which is fantastic, but how do you validate and pressure test the various approaches for validity and reliability? I am eager to see what type of guidance FDA ultimately issues with regard to RWE guidance.” He notes that the FDA’s 2017 guidance issued on the use of RWE in the field of medical devices provides a lot of hints about FDA’s thinking on this topic, and there’s no reason to expect the agency’s thinking on RWE in drug assessment will be much different.

Additional industrywide initiatives are already underway to address some of these challenges. For instance, in 2017, the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) and the International Society for Pharmacoepidemiology (ISPE) created a joint task force which is working to establish consistent methodologies and procedural practices to improve the consistency and reliability of using RWE.

Similarly, the GetReal Initiative, established in 2013 by an EU public-private consortium consisting of pharmaceutical companies, academia, HTA agencies, regulators and patient organizations, is working to develop a variety of tools and resources for RWE.

This article was contributed by Suzanne Shelley of Pharmaceutical Commerce. For more information, visit http://pharmaceuticalcommerce.com.


Indication-Based Formularies Offer Benefits, Risks for Part D

In the government’s latest move to try to rein in drug prices, CMS Administrator Seema Verma said in an Aug. 29 memo to Medicare Part D plan sponsors that they can begin using indication-based formularies in contract year 2020. Industry experts tell AIS Health that the decision definitely has benefits, including giving plans the ability to negotiate higher discounts and providing biosimilars an advantage. On the flip side, potential risks are inherent in the approach, including challenges with operationalizing the policy and the evidence needed to prefer one product over another.

Currently, plan sponsors can use prior authorization (PA) to apply varying approval criteria — a certain diagnosis or result of a diagnostic test, for example — for specific indications. In addition, plans must cover any drug on a formulary for all the indications for which it has FDA approval except for those drugs excluded from Part D based on statutory and regulatory requirements. But starting in 2020, “Part D sponsors may utilize step therapy-like requirements within their PA to promote cost-effective drug therapy by requiring the use of one formulary drug for a certain indication prior to authorizing coverage of a second drug for that indication,” explains the memo, which notes that some commercial health plans already use this approach.

The memo makes clear that a plan taking an indication-based approach “must ensure that there is another therapeutically similar drug on formulary for the non-formulary indication,” or CMS may decide that it is not adhering to the anti-discrimination requirements outlined in the Social Security Act. All other Medicare formulary requirements apply, including coverage of drugs within protected classes.

“If a Part D sponsor excludes specific indications for a Part D drug from its formulary, requests for coverage for those excluded indications should be treated as an exception request for an off-formulary drug,” says the memo. Plans that take this approach must update their beneficiary materials for 2020 to make sure prospective enrollees are aware of the policy. Plans also must submit the indication information to CMS’s Health Plan Management System.

Multiple benefits to using indication-based formularies exist. Plan sponsors will have the “ability to negotiate steeper discounts in the specialty space — not tied into a single rate for utilization of a product across multiple indications,” says Andrew Cournoyer, R.Ph., vice president, director – payer access solutions at Precision for Value. “For example, a drug may have strong utilization in one indication, driving meaningful rebate revenue, but weaker utilization in another indication. Payers won’t be handcuffed based upon performance in a single indication and can maximize rebate potential across multiple indications.”

Plans will be able “to assign a combination of higher payment and/or lower cost share for a treatment used for a particular indication, where evidence shows that this treatment for that indication is likely to yield a better outcome compared to alternative treatments,” says Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates. In addition, for uses of a drug in which evidence offers worse outcomes compared with alternatives, plans can “assign a lower payment and/or a higher cost share.”

“Drug manufacturers will need to alter their contracting strategies to match their competition in various segments,” says Cournoyer, as “preferred access across the board will be harder to achieve, and, as a result, discounts may increase.”

In addition, he tells AIS Health, “Manufacturers of biosimilars may also gain advantage. Aggressive WAC [i.e., wholesale acquisition cost] pricing coupled with a contracting approach may provide net cost benefits to the payer across a number of indications, or a biosimilar could be more aggressive in one indication over another to gain initial market entry. Either scenario could result in favorable access for a biosimilar entrant.”

While the Medicaid best price rule may be an impediment to value-based pricing in commercial markets, prices for drugs covered by Part D don’t trigger that rule, points out Rubinstein, so discounts for these products don’t impact Medicaid pricing.

Policy Has Potential Downsides

The policy, however, has multiple potential downsides and risks. Cournoyer points out that it won’t impact the broader population: “The benefit enhancement is simply a catch-up play for the Medicare population, which represents only about 15% of the population. Moreover, its impact is most likely targeted at specialty drugs, which are utilized by approximately 2% to 3% of the population. So, when combining these numbers, the overall impact to the insured population is quite low.”

Beneficiaries, he says, “will likely not ‘feel’ the impact from an affordability perspective. The goal of the initiative is to enhance the negotiating leverage of payers, which in turn should increase the rebate stream. Without any pass-through of rebates to the member” — which a handful of payers have said they will begin applying at the point of sale — “the benefit to the member is really only felt in premium expenditures, which are relatively flat year over year.”

Rubinstein questions “what constitutes sufficient evidence to support preference for one product over another as a matter of policy and benefit design, if there are patient-specific variables such as severity, age, mobility, comorbidities or other matters that should be taken into consideration?” For this reason, he wonders what the role of real-world data will be in this decision making. “Aside from clinical benefit for a particular indication, how will differences in adverse event frequency and severity reflect in the plan’s preference decision, particularly if adverse event importance varies with patient-specific factors such as age, comorbidity and condition?”

What Is Sufficient Evidence to Prefer?

“If Part D plans evaluate the same evidence and come to a different conclusion, will that decision process be transparent and defensible to prescribers who may treat patients from different Part D plans and who might not agree with one or the other of the Part D plan interpretations of the evidence?” asks Rubinstein. He tells AIS Health that “it’s easier to defend step-therapy preference of therapeutically similar products A vs. B in a drug formulary due to a favorable contract with a manufacturer, but a more difficult challenge to defend diametrically opposed interpretations of published evidence with respect to products A vs B. So will indication-based formulary decisions only apply where the evidence is strong, reflect the evidence in a defensible and transparent manner, and always yield the same preference?”

With prescriptions not needing to show an indication for a drug and systems for PBMs and specialty, community and mail-order pharmacies not recording the indication “if [it’s] not part of a prior-authorization protocol that specifically requires it,” Rubinstein questions how this policy will be operationalized.

“If the indication for which a prescription is dispensed is reflected in reimbursement to the pharmacy, and given that the pharmacy purchased the inventory at a particular price from the wholesaler, will dispensing a drug for a non-preferred indication impact the dispensing pharmacy gross margin — and if yes, how does pharmacy financial risk reflect its ability to influence the indication for which the drug is prescribed?” asks Rubinstein. “That is, might the dispensing pharmacy be penalized for something that is confusing (e.g., on the basis of the same evidence, plan A prefers product #1, while plan B prefers product #2 for a given indication), does not have sufficient transparency to explain to the patient, sufficient clinical or patient-specific condition information to judge if/whether to try to influence the prescriber’s decision vs. call the plan to seek an exception, nor sufficient information to audit that it was paid appropriately by the PBM?”

Another challenge will be how payers can “verify the correctness of a drug written for a preferred indication,” Rubinstein says. “Can indication-based pricing be gamed?” In addition, he says, if manufacturers vary purchase prices and discounts for products based on their formulary position, “how will that be implemented, and what’s to stop purchasing for preferred indication A, but administering/dispensing for non-preferred indication B?”

Policy Could Encourage Rebate ‘Games’

According to an Aug. 29 research note from Evercore ISI analysts Ross Muken and Michael Newshel, indication-based formularies “make sense and should give PBMs some incremental negotiating leverage by multiplying their options for building formularies. But at the same time this could encourage more of the rebate ‘games’ described by HHS where manufacturers raise list price and rebate dollars to get onto formularies, highlighting the tension between the administration’s consideration of restricting rebates and its desire to broaden the negotiating leverage of PBMs,” including the new policy change allowing Medicare Advantage plans to apply step therapy to Part B drugs.

As far as drug classes likely to be affected by the policy, specialty drugs “are the most likely targets on the basis of high cost per prescription, high year-over-year trend of specialty relative to non-specialty pharmaceuticals…and the prediction that specialty will soon comprise half of drug benefit spend,” says Rubinstein. Cournoyer agrees that these drugs are likely targets due to their high prices and “multiple indications with varied competition in each indication.”

Within the specialty medications, the anti-inflammatory products used in conditions such as rheumatoid arthritis, psoriasis and Crohn’s are likely, with Verma even mentioning the tumor necrosis factor (TNF) inhibitors in her memo. This is a class with numerous high-cost therapies, and some payers, including CVS Health, have launched indication-based formularies for it. Hepatitis C drugs, expensive therapies that are approved for different genomes of the virus, also could be contenders.

Both Cournoyer and Rubinstein believe that plans will grandfather in those beneficiaries who are on a drug for an indication that’s not on formulary. “I envision that most plans will grandfather patients,” says Cournoyer. “Disrupting existing care, especially treatment that has been effective, is generally frowned upon by CMS. Furthermore, patient disruption on this front could result in Medicare complaints, which can adversely affect star ratings. Transition policies will also continue to take effect, and plans will need to provide ample notice to beneficiaries if they opt not to grandfather patients (which opens the door for CMS auditing opportunities).”

Patients who already are on a drug for an indication in which it is preferred “will also enjoy the lower cost-share (relative to what they were paying out of pocket before the change) or whatever other benefits are bestowed for use of a preferred product for a preferred indication,” points out Rubinstein.

So what should drug manufacturers do to make sure their drugs receive favorable formulary positions? For one, Rubinstein tells AIS Health, they will need to “ramp up demonstration of efficacy and value via real world data/‘big data’ analysis.”

“Payers will be in a position to redefine market baskets,” says Cournoyer. “No longer will TNF inhibitors be a market basket across an indication set but rather a market basket within an indication subset. As a result, manufacturers will need to look at their value propositions (clinical and financial) within an indication and across indications. Bid proposals will need to look at total value and have the added flexibility of varying contracting rates across different indications (as opposed to one flat rate). There is also an opportunity to expand value or outcomes-based contract opportunities to look at holistic drug performance across all utilizing populations. For example, will a manufacturer hedge its drug’s performance across an indication-agnostic measure such as adherence or persistence, and does this arrangement give a competitive edge?”

View the CMS memo at https://tinyurl.com/y86fbpuc. Contact Cournoyer through Tess Rollano at trollano@coynepr.com 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. For more information, visit https://aishealth.com/product/specialty-pharmacy.


Companies Team Up in Study Of Sensor-Equipped Tablet

Magellan Health and the drug manufacturer Otsuka America Pharmaceutical, Inc. are teaming up to test a pill equipped with a tracking device in a real-world cohort of American patients. Medicaid plans will be watching the experiment closely, says one expert.

The companies said Aug. 30 that they will work together to allow “select regional provider networks” contracted through Magellan to opt into a program involving the Abilify MyCite system, which the FDA approved last November.

Abilify (aripiprazole) treats schizophrenia and other mental illnesses. The MyCite system comprises Abilify tablets embedded with sensors; patches that detect and record the date and time of the pill’s ingestion as well as physiological data like activity level; an app that lets patients review their data and enter additional information; and a web-based dashboard that lets providers and caregivers display and track a patient’s drug ingestion patterns over time.

Officially, Magellan and Otsuka are still analyzing where their limited rollout of the system will take place, Seth Feuerstein, M.D., Magellan Health’s chief innovation officer, tells AIS Health. However, when asked whether the target populations will be in Virginia and Florida — where the company has more than 100,000 Medicaid beneficiaries enrolled in Magellan Complete Care plans — Feuerstein acknowledges that “from a practical perspective, those markets seem like the obvious potential ones.”

To Magellan, testing a system like Abilify MyCite is consistent with the behavioral health-focused company’s push toward innovation — particularly in digital therapeutics, Feuerstein says. Plus, “we saw an opportunity to bring some innovations to populations that often get them last rather than first,” he adds. “Medicaid patients, in particular, often have to wait.”

Other Medicaid managed care plans, meanwhile, will likely be very interested in how Magellan and Otsuka’s experiment plays out, according to Jeff Myers, president and CEO of Medicaid Health Plans of America.

One in five Medicaid enrollees has been diagnosed with a serious mental illness or other behavioral health issue, and there’s likely another one in five who are undiagnosed, he says. “So anything the plans can get [in their] tool belt to ensure adherence to their drug regimen, to do what we can to keep them well, is something the plans are going to look at very carefully.”

“Of course, this drug is also a significant step up in cost from the generic,” Myers adds. “And that has its own issues for the state[s] and for the plans that administer that drug.”

A 30-day supply of all the components in Abilify MyCite costs $1,650, says John A. Bardi, vice president of public affairs and digital medicine business development for Otsuka.

Down the road, if states consider adding Abilify MyCite to their carved-out formularies, or if managed care plans begin to roll it into their formularies, “the states are going to have some questions about how are you going to manage the benefit, and are we going to get the value out of spending this extra money,” Myers says.

“And that’s where I think the plans’ real value is going to become apparent, because they will be able to say to the state, ‘this is why the value to this patient is X, this is how I think it’s going to reduce, say, inpatient hospital stays as a result of psychosis,’” he adds.

To that end, insurers are particularly interested in learning whether the Abilify MyCite system can reduce hospital stays among the population that Magellan and Otsuka study, Myers says. They’d also likely want to know whether the system is able to not only increase adherence to Abilify, but also any other medications that patients are taking — once their mental state is stabilized, he says.

“Then there’s the straight up quality-of-life issue,” Myers adds. “We would want to make sure that those patients feel like this is really adding to their being able to control their symptomology.”

Magellan Will Study Provider Reaction

Feuerstein says cost-of-care and clinical outcomes are both of “pre-eminent importance” to Magellan as it gauges Abilify MyCite’s performance. But the company will also be gathering other, more subjective, information.

“One of the really interesting metrics that actually has nothing to do with the product per se, is when you bring an FDA-approved digital product to providers, what’s their engagement like just learning about it — and are they interested in these kinds of tools for their patients?” he says. Patients are the ones who should decide whether a product is right for them, “but the reality is, they won’t know about it if their provider doesn’t make them aware of it.”

In addition, “it will be interesting to see, how do clinicians and patients use new types of objective data that they can share to discuss how they’re doing,” he says. Right now, patients don’t always report correct information — whether intentionally or mistakenly — when asked whether they’ve been taking their medication. Ultimately, “if we see a measurable and significant group of patients and providers feel this is helpful for them, to us that’s a win,” Feuerstein says.

There are, however, potential downsides to the MyCite system — at least according to American Psychiatric Association President Paul Appelbaum, M.D., who told Psychiatric News that he’s worried the use of tracking pills amounts to a provider telling a patient, “I don’t trust you.” Further, “in an era in which even the National Security Agency gets hacked, there are obvious concerns about patient privacy with a technology that communicates personal medical information,” he said.

Feuerstein, however, argues that the Abilify MyCite system tracks the same type of information that’s “discussed and shared between patients and clinicians all the time.”

Firm Addressed Privacy Concerns

And Bardi says Otsuka took a slew of steps to address potential privacy or data-security concerns. For one, the use of the MyCite system is predicated on the concept of informed consent. “Nothing begins with this [system] without the patient consenting and fully understanding exactly what they’re signing up for and what is going happen here, what’s going to happen with their data, etc.,” he says.

Two and a half years ago, Otsuka formed a digital medicine bioethics board that has worked closely with its product development team on myriad aspects of designing and testing Abilify MyCite. On the data- security front, the company spent a “tremendous amount of time” considering how exactly patients’ information should be handled and how to de-identify the data, among other issues, Bardi says.

Otsuka’s privacy and ethics teams have also met with officials from CMS, the HHS Office for Civil Rights, the Office of the National Coordinator for Health Information Technology and the Federal Trade Commission to discuss the Abilify MyCite system and its protocols, Bardi says.

And finally, Otsuka has a digital medicine national steering board charged with addressing adoption barriers that could emerge related to Abilify MyCite. That’s important considering it’s a first-of-its-kind product coming into a Medicaid market that isn’t particularly accustomed to innovation, Bardi says. “So we’ve been working very closely with this set of experts to help us make sure that we’re handling this launch appropriately with respect to the payer community and their concerns and their issues.”

Looking ahead, Feuerstein says that it’s “inevitable that more products that provide more information are going to be coming to patients.” For Magellan’s part, though, “more availability and more products and to whom, I think, is really going to depend on what we learn here,” he adds.

Myers says if the Abilify MyCite experiment is successful, he wouldn’t be surprised if similar technology is used in treatments for other conditions that can result in heavy use of inpatient care, such as diabetes or asthma.

“As this rolls out and as it becomes more common, you’re likely to see the price drop, and when that price drops, you’re likely to see more and more uptake,” he adds.

Read Otsuka’s press release at https://bit.ly/2x3hEJV and the Psychiatric News article at https://bit.ly/2oW5AGG. Contact Myers via Joe Reblando at joe@joereblando.com, Bardi via Robert Murphy at robert.murphy@otsuka-us.com and Feuerstein via Kristen Durocher at kdurocher@magellanhealth.com.

by Leslie Small

This story was reprinted from AIS Health’s biweekly publication Radar on Drug Benefits. For more information, visit https://aishealth.com/product/specialty-pharmacy.


Reality Check: Migraine


Our Point of View

For years, clinicians have mostly prescribed generic drugs for the prevention of migraines. But the recent launch of the first calcitonin gene-related peptide (CGRP) inhibitor — Aimovig (erenumab-aooe) from Amgen Inc. and Novartis AG — and approval of Teva Pharmaceuticals’ Ajovy (fremanezumab-vfrm) and Eli Lilly and Co.’s Emgality (galcanezumab-gnlm) disrupted the market dynamics. It’s expected that CGRP inhibitors will compete against Botox and the other botulinum toxin products for migraine prevention. This use is one of the most profitable indications for Botox; the availability of this new class of drug is one of the largest pharma innovations and disruptions to occur in the last decade.



Pharmacy Benefit

A review of market access for migraine medications reveals that payer pharmacy benefit coverage varies by channel. Only 18% of the covered lives under commercial formularies are unrestricted. About 41% of health exchange lives and 83% of Medicare lives don’t have access to such drugs.

Medical Benefit

Payer medical benefit coverage for migraine treatments shows a different view of the situation. Under commercial and health exchange formularies, only 0.4% of the lives are covered, while Medicare programs cover 4.2% of the lives.


AIS Health’s View

The new class of CGRP inhibitors has the potential to be used in episodic and chronic migraines, which is a limited population within the overall migraine patient population, explains April Kunze, Pharm.D., senior director of clinical formulary development and trend management strategy at Prime Therapeutics LLC. “The clinical data shows the drugs decrease monthly migraine days by about two days per month. Because it is a new class of drugs with limited data and launching at a high cost relative to other migraine drugs, which is largely a generic market, many [PBMs] will likely have utilization management criteria to help ensure its proper use in the correct patient population,” she tells AIS Health. In addition, a recent review of preventive migraine products by the Institute for Clinical and Economic Review includes recommendations for management criteria and pricing thresholds.


Trends From AIS Health

New Class of Migraine Drug May Upend Payers’ Calm

For years, clinicians have mostly prescribed generic prescription drugs to treat migraines. But a new class of relatively high-cost specialty biologic products is threatening to upend payers’ calm. The upshot, pharma industry experts say, is insurers and PBMs are proceeding with caution and focusing on utilization management to ensure the proper use of Aimovig (erenumab) from Amgen, Inc. and Novartis AG, the first FDA-approved product in this emerging class of drugs.

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

Current Market Access to Migraine Medications

About half of people under commercial formularies have coverage for migraine medicines, whereas more than 85% of lives under Medicare programs don’t have access to such drugs. Payer pharmacy benefit formularies require step therapy for 42% of covered lives and prior authorization for 45% of lives. Among migraine medications, Impax Laboratories, LLC.’s Zomig Spray, Avanir Pharmaceuticals, Inc.’s Onzetra Xsail and Valeant Pharmaceuticals’ Migranal are mainly preferred or covered by insurers under commercial formularies as of July 2018.

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

CAR-T, Migraine, NASH Drugs Pose Challenges for Blues Plans in 2018-2019

New immunotherapy drugs that hold the potential for dramatic changes in oncology treatment could lead Blue Cross and Blue Shield plans to adopt unique outcomes-based payment strategies, while additional drugs slated for approval in 2018 and 2019 pose more conventional cost-control issues.

Subscribers to AIS’s Health Plan Weekly may read the in-depth article online


Key Findings

Market Includes Generics, Off-Label Drugs

Migraine prevention — sometimes called migraine prophylaxis — products are made up largely of generic and off-label products and include anticonvulsants (e.g., topiramate), beta blockers (e.g., metoprolol and propranolol) and antidepressants (e.g., amitriptyline). Policies for botulinum toxin usually require a step through preventive therapy. It’s unclear whether the launches of the CGRP inhibitors will create a treatment step after generic products but before botulinum toxins or whether they will be treated roughly equal to botulinum toxins.

Pipeline Is Full of Products

The migraine prevention class has been fairly stable for years, with many generics available within the mature class. But the FDA approval of Aimovig, Ajovy and Emgality is a sign of more disruption to come. Multiple other products, including more CGRP inhibitors, are coming down the pike, with more products expected to launch over the next few years.



AIS Health’s View

Aimovig’s $6,900 annual price tag is less than some analysts’ estimates but “obviously much higher than the generic products currently used for prevention,” says Mesfin Tegenu, R.Ph., president of PerformRx, LLC. He tells AIS Health that products within the CGRP inhibitor class will “follow our standard procedure, which is to be reviewed at a P&T committee meeting for consideration and formulary placement recommendation. The current standard of practice is to require a trial of clinically appropriate first-line agents, many of which are generic medications that have been in use for quite some time. In addition, we require the patient be seen by a specialist and have the appropriate diagnosis.” He adds that, like most specialty medications, CGRP inhibitors will require a prior-authorization review prior to approval. Asked what is likely to happen next, Tegenu replies: “We will continue to monitor the utilization patterns and evaluate and modify our criteria as needed or at least annually.” Launches of other CGRP inhibitors “will increase the competition within this class, and there will likely be preferred products selected based on varying pricing strategies,” Kunze notes.