100% Focused on Market Access
Payer

Perspectives on Remdesivir’s $3,120 Price Tag

August 6, 2020

Gilead Sciences, Inc. revealed that for promising COVID-19 treatment remdesivir, it will charge $2,340 for a typical five-day, six-vial treatment course for people covered by U.S. government health programs and $3,120 for those covered by private insurance, AIS Health reported.

In an open letter, Gilead CEO Daniel O’Day argued that Gilead priced remdesivir “well below” its estimated value, considering it can save the U.S. health care system approximately $12,000 per patient by reducing the length of COVID-19 patients’ hospital stays.

But not everyone is convinced by that argument.

Gilead Sciences, Inc. revealed that for promising COVID-19 treatment remdesivir, it will charge $2,340 for a typical five-day, six-vial treatment course for people covered by U.S. government health programs and $3,120 for those covered by private insurance, AIS Health reported.

In an open letter, Gilead CEO Daniel O’Day argued that Gilead priced remdesivir “well below” its estimated value, considering it can save the U.S. health care system approximately $12,000 per patient by reducing the length of COVID-19 patients’ hospital stays.

But not everyone is convinced by that argument.

“So they’re saying by shortening hospital stays, the system is going to save all these monies, but I always ask the question, ‘Why is it that the drug company should get to pocket all or some substantial portion of that savings?'” says Jack Hoadley, Ph.D., a research professor emeritus at Georgetown University’s Health Policy Institute. “That’s a savings we should accumulate for consumers, for payers [and] everybody else.”

Hoadley is not alone in those views. The advocacy group Patients for Affordable Drugs, in a June 29 statement, wrote that “Gilead’s price for remdesivir shows once again that we can’t trust Big Pharma to act responsibly — even in the face of a global pandemic.”

The U.S. government helped fund the development of remdesivir, and dexamethasone — a generic steroid — is priced at less than $1 per day even though it ‘showed promise for combating severe COVID-19 cases and reducing potential mortality rates,” the organization said.

The Institute for Clinical and Economic Review (ICER) also brought up dexamethasone in its statement. The U.S. price range of $2,340 to $3,120 is “is largely in line with ICER’s independent assessment suggesting that a price of approximately $2,800 would be reasonable in proportion to the added benefits for patients and the cost offsets in the health system now that dexamethasone is rapidly becoming standard of care,” wrote ICER President Steven D. Pearson, M.D.

Leerink analyst Geoffrey Porges, in a June 29 note to investors, pointed out that the U.S. commercial price set for remdesivir was below his firm’s expectations. Still, “we believe the disclosed [remdesivir] pricing is reasonable, and should provide significant value to the Gilead shareholders and still deflect much of the criticism the company might face in this emergency,” Porges wrote.

Radar On Market Access: Anthem Warns of Greater Commercial Enrollment Drop in Second Half

August 6, 2020

While Anthem, Inc. has seen less of an enrollment dip in its commercial business than it originally feared when the COVID-19 pandemic and economic recession first took hold, the insurer’s executives said during a July 29 earnings conference call that they expect that attrition to accelerate in the coming months as some furloughs become permanent job losses, AIS Health reported.

From March 31 to June 30, Anthem saw enrollment in its commercial and specialty business lines drop by 290,000. “But as you think about unemployment, that was fairly muted,” especially when it comes to Anthem’s risk-based business, President and CEO Gail Boudreaux said during the earnings call. She and other Anthem executives attributed that effect to the fact that many companies have thus far furloughed rather than laid off workers, thanks in part to federal stimulus funding.

While Anthem, Inc. has seen less of an enrollment dip in its commercial business than it originally feared when the COVID-19 pandemic and economic recession first took hold, the insurer’s executives said during a July 29 earnings conference call that they expect that attrition to accelerate in the coming months as some furloughs become permanent job losses, AIS Health reported.

From March 31 to June 30, Anthem saw enrollment in its commercial and specialty business lines drop by 290,000. “But as you think about unemployment, that was fairly muted,” especially when it comes to Anthem’s risk-based business, President and CEO Gail Boudreaux said during the earnings call. She and other Anthem executives attributed that effect to the fact that many companies have thus far furloughed rather than laid off workers, thanks in part to federal stimulus funding.

“We can’t predict exactly what’s going to happen when they come off [furlough]; it will depend on the strengthening of the economy and what happens there and what employers decide to do,” Boudreaux said.

Ultimately, “we do expect further declines, assuming the economy continues to operate at less than full capacity,” Boudreaux said of Anthem’s commercial business. Meanwhile, Anthem’s Medicaid and Medicare enrollment grew by 599,000 from the first quarter of 2020 to the second quarter. Overall medical enrollment rose by 0.7% between the first and second quarters of this year, and it increased 3.9% in the second quarter of 2020 compared with the prior-year quarter.

Anthem reported adjusted earnings per share of $8.91 per share in the quarter, compared with $4.36 during the prior-year period. The insurer’s quarterly operating revenue was $29.2 billion — an increase of $4 billion, or 15.9% compared with the prior-year quarter — which Anthem attributed to “pharmacy product revenue related to the launch of IngenioRx,” the company’s PBM.

Radar On Market Access: Experts Are Skeptical of Trump Administration’s Drug Pricing Executive Orders

August 4, 2020

In executive orders released July 24, the Trump administration renewed its push toward a signature campaign issue: lowering drug prices. The three executive orders call for regulations allowing drugs to be imported from other countries, requiring Federally Qualified Health Centers to make insulin and epinephrine available to low-income members of the public at the discounted prices set by the 340B Drug Pricing Program, and removing safe harbor protections under the Anti-Kickback Statue for prescription drug rebates in Medicare Part D, AIS Health reported.

“I think that what you have here is a collection of policies that are intended to make noise, but will have little to no practical effect on drug prices before the election,” Avalere founder Dan Mendelson says.

In executive orders released July 24, the Trump administration renewed its push toward a signature campaign issue: lowering drug prices. The three executive orders call for regulations allowing drugs to be imported from other countries, requiring Federally Qualified Health Centers to make insulin and epinephrine available to low-income members of the public at the discounted prices set by the 340B Drug Pricing Program, and removing safe harbor protections under the Anti-Kickback Statue for prescription drug rebates in Medicare Part D, AIS Health reported.

“I think that what you have here is a collection of policies that are intended to make noise, but will have little to no practical effect on drug prices before the election,” Avalere founder Dan Mendelson says.

Marc Samuels, CEO of ADVI, says that the proposals seem half-baked, and will likely draw strong opposition. “These executive orders are consistent with the previous [drug pricing] blueprint adopted by the Administration and debated in part in Congress. But having the authority to make quick changes doesn’t mean doing so is a good idea, especially so close to an election,” he says.

The idea of importing drugs from other developed countries, and relying on their drug safety inspection regimes, has popped up in the past. Mendelson, who ran the health division of the Office of Management and Budget between 1998 and 2000, says that although the Clinton administration considered the idea seriously, it found that it wasn’t feasible.

“We looked at it and rejected the policy because we were concerned that it wouldn’t work, and that in fact it would not only compromise the pharmaceutical supply chain but also likely be rejected by the very countries we would want to import the drugs from,” Mendelson explains.

The rebate order addresses a persistent challenge for the administration. And Citi analyst Ralph Giacobbe is skeptical that the proposal will actually manifest substantial changes in the way PBMs do business.

“While this will resurrect some debate on the PBM business model, we see the likelihood as either low or limited in scope,” Giacobbe wrote in a note. “Additionally, [with] the language of HHS having to confirm that this action does not increase federal spending, Medicare beneficiary premiums or out-of-pocket cost may make it a moot point since premiums will definitively rise, in our opinion.”

A fourth executive order would tie drug prices to their list prices in countries with Most Favored Nation status. That order has not yet been released, but could be in the coming weeks.

MMIT Reality Check on Kidney Cancer (July 2020)

July 31, 2020

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

According to our recent payer coverage analysis for kidney cancer 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 kidney cancer treatments shows that under the pharmacy benefit, about 62% of the lives under commercial formularies are covered with utilization management restrictions.

Trends: In December 2019, the FDA approved Teva Pharmaceuticals USA, Inc.’s and Endo International plc unit Par Pharmaceuticals’ everolimus for the treatment of advanced hormone receptor-positive, HER2-negative breast cancer in postmenopausal women; advanced renal cell carcinoma; renal angiomyolipoma and tuberous sclerosis complex; progressive neuroendocrine tumors of pancreatic origin; and progressive, well-differentiated, non-functional neuroendocrine tumors of gastrointestinal or lung origin that are unresectable.

Trends That Matter for Medicaid MCOs

July 30, 2020

Two recent reports found that Medicaid managed care plans now enroll most Medicaid members, help keep costs and premiums low in the markets where they participate, and are competitive with commercial plans at the low end of the individual market in areas including network quality and benefit design, AIS Health reported.

One white paper was prepared by consultancy The Menges Group for America’s Health Insurance Plans (AHIP), and the other was authored by researchers at the Robert Wood Johnson Foundation (RWJF) and Urban Institute.

Two recent reports found that Medicaid managed care plans now enroll most Medicaid members, help keep costs and premiums low in the markets where they participate, and are competitive with commercial plans at the low end of the individual market in areas including network quality and benefit design, AIS Health reported.

One white paper was prepared by consultancy The Menges Group for America’s Health Insurance Plans (AHIP), and the other was authored by researchers at the Robert Wood Johnson Foundation (RWJF) and Urban Institute.

The Menges Group-AHIP white paper, which had a national scope, found that Medicaid MCO enrollment increased by 121% between fiscal years 2010 and 2018, from 26 million to over 56 million members, and that as of 2018, more than 75% of all Medicaid enrollees are members of an MCO, up from 50% in 2010. The report also found that, since 2017, capitated payments to MCOs have exceeded fee-for-service expenditures.

The RWJF-Urban Institute paper, which relied on case study surveys in Arkansas, California, Florida, New York, Ohio, and Washington state, concluded that MCOs offer coverage that is at least as good as commercial plans in the low end of the Affordable Care Act individual market.

“Many [stakeholders] feel there are no longer major distinctions between Medicaid and commercial insurers in the marketplaces. Most interviewees have positive perceptions of Medicaid insurers, crediting their ability to increase choice and affordability in the individual health insurance market,” wrote the paper’s authors.

Radar On Market Access: UnitedHealth, Humana Launch Programs for Chronic Conditions

July 30, 2020

Both UnitedHealthcare and Humana Inc. are rolling out new disease-specific care management programs aimed at providing patients with the tools they need to help control their chronic conditions, AIS Health reported.

The new initiatives highlight new digital and time-tested interpersonal ways of managing chronic conditions, observers say.

UnitedHealth said it has launched its new digital therapy for people with type 2 diabetes that combines wearable technology and customized personal support. The therapy, called Level2, helps participants gain real-time insights about their condition, using a mobile continuous glucose monitor, activity tracker, app-based alerts and one-on-one clinical coaching.

Both UnitedHealthcare and Humana Inc. are rolling out new disease-specific care management programs aimed at providing patients with the tools they need to help control their chronic conditions, AIS Health reported.

The new initiatives highlight new digital and time-tested interpersonal ways of managing chronic conditions, observers say.

UnitedHealth said it has launched its new digital therapy for people with type 2 diabetes that combines wearable technology and customized personal support. The therapy, called Level2, helps participants gain real-time insights about their condition, using a mobile continuous glucose monitor, activity tracker, app-based alerts and one-on-one clinical coaching.

Meanwhile, Humana says it has contracted with REACH Kidney Care, an educational nonprofit affiliated with Dialysis Clinic, Inc., to provide kidney disease care coordination services to eligible Medicare Advantage and commercial members in Georgia, North Carolina, South Carolina and Tennessee. The collaboration is focused on early detection of chronic kidney disease, slowing disease progression and improving the patient experience.

Joseph Paduda, principal at Health Strategy Associates, LLC, notes that both programs are designed to reduce severity and therefore the cost of treating patients, identifying patients who are “heading in the wrong direction and likely intervening.” Still, Paduda says, “what’s notable is that both are focused on individual disease states, especially knowing more than a third of adults — and more than half of older adults — have multiple chronic conditions.”

William DeMarco, president of Pendulum HealthCare Development Corp., says that UnitedHealth has an in-house advantage with its Optum subsidiary, which connects the insurer’s data platforms for claims and clinical data. Therefore, more information and measures can be tracked electronically, reducing the need for physician or even nurse intervention except when needed, DeMarco says.

DeMarco says the applicability of digital care management solutions, versus more traditional solutions, depends on the condition — although technology always has a place.

“Diabetes is a data-driven disease,” and therefore particularly well-suited to digital therapy, observes Dan Mendelson, founder of Avalere Health. Other chronic conditions that are particularly data-driven include cardiovascular disease and Crohn’s disease, he says, and “any conditions that require regular medication management are likely to benefit from some kind of digital tools.”