Payer

Trends That Matter for FDA Orphan Label Application Reviews

January 17, 2019

The Orphan Drug Act (ODA) offers multiple incentives to manufacturers that bring a drug to market with an orphan designation. A recently released U.S. Government Accountability Office (GAO) report revealed that while the number of applications both received and granted for this designation has grown, FDA reviewers were not consistently recording or evaluating required information that is mandated to consider granting this designation, AIS Health reported.

The Orphan Drug Act (ODA) offers multiple incentives to manufacturers that bring a drug to market with an orphan designation. A recently released U.S. Government Accountability Office (GAO) report revealed that while the number of applications both received and granted for this designation has grown, FDA reviewers were not consistently recording or evaluating required information that is mandated to consider granting this designation, AIS Health reported.

The report, titled Orphan Drugs: FDA Could Improve Designation Review Consistency; Rare Disease Drug Development Challenges Continue (GAO-19-83), shows that from 2008 to 2017, both orphan designation applications received as well as orphan designations granted rose.

Researchers also assessed whether FDA reviewers were using consistent criteria to evaluate applications. On this, however, reviewers’ performance left a bit to be desired.

From October to December 2017, after the implementation of the modernization plan, the agency analyzed 148 review templates. According to the GAO report, “of the five review template sections where reviewers are required to record information, we found that OOPD [i.e., the Office of Orphan Products Development] does not ensure that all required information is consistently recorded in the background information section and evaluated when making designation decisions.”

Of the 148 templates, the FDA granted orphan designation to 26 applications that were missing required information. GAO recommends that the “FDA should ensure that all required information for reviews of orphan designation applications is consistently recorded and evaluated. The agency concurred with our recommendation.”

Radar On Market Access: Vermont Pushes Ahead on Canadian Drug Importation

January 17, 2019

A new report concludes that if Vermont undertakes wholesale importation of prescription drugs from Canada, such a program could achieve cost savings for the state’s commercial payers. But achieving benefits requires an emphasis on program mechanics, and Vermont’s own effort is far from a done deal — with the state’s largest health insurer pointing out that administrative costs and hurdles, which may be significant, are not quantified in this feasibility study, AIS Health reported.

A new report concludes that if Vermont undertakes wholesale importation of prescription drugs from Canada, such a program could achieve cost savings for the state’s commercial payers. But achieving benefits requires an emphasis on program mechanics, and Vermont’s own effort is far from a done deal — with the state’s largest health insurer pointing out that administrative costs and hurdles, which may be significant, are not quantified in this feasibility study, AIS Health reported.

The state’s 14-page report on the preliminary design of the “Canadian Rx Drug Import Supply Program,” written with the National Academy for State Health Policy’s (NASHP) technical assistance, estimates savings of $1 million to $5 million annually, based on just 17 high-spend drugs identified for two of the state’s three major carriers.

Blue Cross and Blue Shield of Vermont was among the three major carriers in the state asked to voluntarily identify top-spend prescription drugs for the second quarter of 2018, excluding drugs such as narcotics, biologics, and IV and infused drugs that are not eligible for importation under federal law. MVP Health Care also provided data, but Cigna Corp. opted not to do so.

While NASHP Executive Director Trish Riley declined to identify by name the 17 high-spend drugs contained in the report, she says they are used for contraception, chronic obstructive pulmonary disease, diabetes, hepatitis C, HIV/AIDS, multiple sclerosis, arthritis and venous thromboembolism prevention, along with one cancer drug.

Payers also were asked to calculate net savings from importation, with NASHP adding a “conservatively-high estimated mark-up” for program administration of 45% on top of the Canadian price. To determine savings, plans were asked to determine their net spend (net of rebates) on the 17 drugs, comparing it to the would-be net spend for the same drugs if they were imported from Canada with a 45% mark-up.

Even with the 45% mark-up, plans reported savings ranging from $2.61 to $2.82 per member per month, or $1 million to $5 million annually, the report says. But it notes these savings for commercial payers, post mark-up, don’t take into consideration the state’s costs in operating the importation program.

Broadly speaking, the Vermont Blues plan supports efforts to reduce prescription drug costs for its members, says its spokesperson Sara Teachout. Yet she notes the complexity of the issue, pointing out that “some of the administrative hurdles [for Canadian drug importation in Vermont] are significant.”

Radar On Market Access: Don’t Expect Major Action on Drug Prices in 2019, Experts Say

January 15, 2019

As 2019 gets under way, public outrage over high prescription drug prices does not appear to have abated, especially in light of recent news reports indicating manufacturers are raising prices on hundreds of drugs this month, AIS Health reported.

As 2019 gets under way, public outrage over high prescription drug prices does not appear to have abated, especially in light of recent news reports indicating manufacturers are raising prices on hundreds of drugs this month, AIS Health reported.

Yet there are plenty of reasons why this concern over drug prices might not result in any significant legislative or regulatory action, experts tell AIS Health. And whatever does occur might benefit health plans and PBMs more than challenge them.

Walid Gellad at the University of Pittsburgh says there’s sure to be a lot of drug-pricing bills proposed — and even passed — by the House, but it’s not certain that any will become law. He says that’s because many Senate Republicans aren’t likely to be very interested in passing legislation that harms the pharmaceutical industry. “The real uncertainty is whether the president would get behind one of those bills, and if so, that could change things,” Gellad says.

One hot topic on Democrats’ legislative agenda will be allowing Medicare to negotiate drug prices with manufacturers. While the idea of broad-based Medicare price negotiation probably has little chance of passing, “there could be a tie-in between negotiation and external reference prices for Part D,” says Gerard Anderson, professor at Johns Hopkins University Bloomberg School of Public Health.

In fact, Sen. Bernie Sanders (I-Vt.) and other left-leaning lawmakers introduced a trio of drug-pricing bills on Jan. 10, one of which would direct HHS to negotiate lower prices for Part D drugs, and another that would peg the price of prescription drugs in the U.S. to the median price in five major countries.

Overall, Anderson says he expects most potential actions to lower drug prices will benefit the managed care sector, as the result could be lower costs for such companies.

On the regulatory front, Gellad says he expects “small changes here and there…[but] nothing that’s going to radically change prices now or over the next two years — or until the next election.” However, “the big one for me is whether there will be big action around rebates,” he adds.

If the prescription drug rebate structure changes fundamentally, “it’s going to create a challenge for PBMs and their underwriting strategies, because they have been driven by rebates over the last couple years,” says Brian Anderson, a principal with Milliman, Inc.

MMIT Reality Check on Multiple Sclerosis (Jan 2019)

January 11, 2019

According to our recent payer coverage analysis for multiple sclerosis treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for multiple sclerosis treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

To help make sense of this new research, MMIT’s team of experts analyzes the data and summarizes the key findings for you. The following are brief highlights. To read the full piece, including payer coverage, drug competition and prescriber trends, click here.

Payer Coverage: A review of market access for multiple sclerosis treatments shows that more than half of the lives under the pharmacy benefit in commercial and health exchange formularies have utilization management restrictions.

Trends: Contracting is prevalent among interferons, where formulary preference drives choice. Via AIS Health.

Perspectives on Potential Humana/Walgreens Tie-Up

January 10, 2019

In November 2018, reports emerged that retail pharmacy giant and health insurer— Walgreen Co. and Humana Inc. — are in preliminary talks to take equity stakes in each other.

In November 2018, reports emerged that retail pharmacy giant and health insurer— Walgreen Co. and Humana Inc. — are in preliminary talks to take equity stakes in each other.

Walgreens and Humana are already collaborating on a pilot project in which the insurer opened senior- focused primary care clinics in two Walgreens stores in the Kansas City, Mo., region. Now the companies are in “wide-ranging” talks about either expanding that venture or taking stakes in each other, according to The Wall Street Journal.

If Humana and Walgreens do decide to establish cross-holdings in each other, it would be “a very interesting and shrewd play,” Rita Numerof, Ph.D., president and founder of Numerof & Associates, tells AIS Health.

“We know that a lot of outright M&A doesn’t deliver value at the end of the day,” she says. But taking equity stakes in each other isn’t a true acquisition, “so you don’t have all of the risks and costs associated with bringing [a] business under the umbrella of one that’s very, very different.”

In an note to investors, Leerink analyst Ana Gupte pointed to the upside for Humana. “Equity stakes are a way for the two companies to share economics across the different economic pools across clinical, MA distribution and associated retail pharmacy fills and front store sales, which can drive several hundred million dollars of value for [Humana] annually in EBIT [earnings before interest and taxes].”

But Jefferies analysts wondered if perhaps Walgreens might be the bigger winner, since the pharmacy business model “is under more direct attack from disruptive players than are health plans” and “partnering with [Humana] helps [Walgreens] drive market share.”

Jay Godla, a partner at PwC’s Strategy&, says that there could certainly be synergies produced by Humana and Walgreens buying stakes in each other. But any arrangements that are less than a full merger or acquisition can include issues around commitment, agility, not-so-well aligned goals and objectives, and inability to make quick decisions, he notes.

The talks reportedly going on between Humana and Walgreens “could be a starting point for a long-term future merger,” Godla adds.

Radar On Market Access: New Hep C Approach Might Not Save Money, PBM Execs Warn

January 10, 2019

A small study suggests it might be possible to shorten the length of expensive drug treatment for chronic hepatitis C virus (HCV), potentially cutting treatment time in half for 50% of patients. But managed care pharmacy clinicians say the results are far from ready to implement widely, and it’s possible the new approach might not even save money, AIS Health reported.

A small study suggests it might be possible to shorten the length of expensive drug treatment for chronic hepatitis C virus (HCV), potentially cutting treatment time in half for 50% of patients. But managed care pharmacy clinicians say the results are far from ready to implement widely, and it’s possible the new approach might not even save money, AIS Health reported.

The study, conducted at Loyola University Chicago and three medical centers in Israel, involved only 22 patients. It used a technique called modeling-based response-guided therapy, which estimated how long it would take to completely eliminate the hepatitis C virus.

“There’s a potential to save up to 20% of the costs of hepatitis C drugs,” says study author and Loyola researcher Harel Dahari, Ph.D.

However, April Kunze, Pharm.D., senior director of clinical formulary development and trend management strategy for Prime Therapeutics LLC, says that if PBMs or health plans apply policies that use the Loyola study’s data, the result may not necessarily be lower prices for hepatitis C therapy. “Drug pricing may vary significantly based on contracts and utilization,” she says. “Additionally, patients who relapse may require additional therapy, which could increase the overall cost of treatment.”

The proof-of-concept pilot study showed that using response-guided therapy to reduce treatment times is feasible, study authors said. To validate the results, a large multi-center trial is underway in Israel.

Dahari said that in addition to cutting overall costs, shorter treatment regimens would make it easier to treat hepatitis C patients who have limited drug benefits.

Still, Mesfin Tegenu, R.Ph., president of PerformRx, says that current FDA-approved protocol for treating hepatitis C is for either eight or 12 weeks, and “it will not be easy to change current protocol” for treating hepatitis C, since “all the clinical work done by drugmakers to receive approval was done for eight or 12 weeks.”

Regardless of the prospects for the response-guided therapy approach, there could be more price upheaval coming to the HCV antiviral market in 2019. Gilead said in September that it will soon launch steeply discounted generic versions of two of its HCV drugs.