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Radar On Market Access: Centene to Bolster Pharmacy Services with Magellan Deal

January 19, 2021

In addition to creating “one of the nation’s largest behavioral health platforms,” Centene Corp. will add another pharmacy-related asset to its portfolio with its recently announced $2.2 billion proposed purchase of Magellan Health, Inc, AIS Health reported.

The deal, unveiled on Jan. 4, will deliver 2 million PBM members and 16 million medical pharmacy lives to Centene. The transaction creates “additional value across our pharmacy capabilities,” Centene Chief Financial Officer Jeff Schwaneke said during a Jan. 4 conference call. “This is a large and significant market….We have invested in this area in recent years given its attractive growth opportunities, most recently with the addition of PANTHERx.”

In addition to creating “one of the nation’s largest behavioral health platforms,” Centene Corp. will add another pharmacy-related asset to its portfolio with its recently announced $2.2 billion proposed purchase of Magellan Health, Inc, AIS Health reported.

The deal, unveiled on Jan. 4, will deliver 2 million PBM members and 16 million medical pharmacy lives to Centene. The transaction creates “additional value across our pharmacy capabilities,” Centene Chief Financial Officer Jeff Schwaneke said during a Jan. 4 conference call. “This is a large and significant market….We have invested in this area in recent years given its attractive growth opportunities, most recently with the addition of PANTHERx.”

Centene’s purchase of PANTHERx Rare, LLC, a specialty pharmacy company that focuses on orphan drugs and treatments for rare diseases, closed on Dec. 30.

However, when it comes to integrating its new pharmacy-related holdings, Centene may face some challenges.

During the conference call, Bank of America analyst Kevin Fischbeck asked executives whether they’re worried that Magellan Rx Management could lose managed Medicaid business opportunities in states such as California that are carving out their pharmacy benefits, as it will no longer be a “pure-play PBM.” Centene President, Chairman and CEO Michael Neidorff downplayed such concerns, emphasizing that states’ decisions to carve benefits in and out “are cyclical” and that Magellan will still be able to operate independently once under its acquirer’s umbrella.

Yet in a research note to investors sent after the call, Jefferies analysts David Windley and David Styblo warned about the “risk of customer abrasion” once Magellan is no longer truly independent. “That was a selling point [Magellan] made for all three of its businesses, especially the PBM,” they wrote.

Timothy Epple, a principal at Avalere Health, says that given “the differentiation in how states operate formularies and how states regulate pharmacy benefits, I do think the pharmacy piece of Magellan could be more complex” to integrate than its behavioral health business. “Centene is very state-focused, and you’re basically talking about integrating two assets that likely don’t have perfect overlap in terms of where they’re operating,” Epple adds.

Centene and Magellan expect their deal to close in the second half of 2021, pending approval from regulators and Magellan Health’s stockholders, and other customary closing conditions.

MMIT Reality Check on Epilepsy (Jan 2021)

January 15, 2021

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

According to our recent payer coverage analysis for epilepsy 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 epilepsy treatments shows that under the pharmacy benefit, almost 39% of the lives under commercial formularies are covered with utilization management restrictions.

Trends: In June 2020, the FDA approved Zogenix, Inc.’s Fintepla (fenfluramine) to treat seizures associated with Dravet syndrome in people at least 2 years old. The price for a 30 mL bottle is $1,278.

Trends That Matter for MCO’s Role in COVID Vaccine Rollout

January 14, 2021

States and the federal government recently began rolling out the COVID-19 vaccine to health care workers across the country. Health plans, particularly those that serve high-risk individuals, may be ideally situated to coordinate care and update members on vaccination opportunities, experts tell AIS Health.

The FDA on Dec. 11 authorized emergency use of the COVID-19 vaccine made by Pfizer Inc. and BioNTech in individuals age 16 and older. Then the agency on Dec. 18 authorized Moderna’s vaccine for emergency use in people 18 years or older.

Health care workers and nursing home residents have been designated by the Centers for Disease Control and Prevention as the first group (phase 1a) to receive the vaccine.

States and the federal government recently began rolling out the COVID-19 vaccine to health care workers across the country. Health plans, particularly those that serve high-risk individuals, may be ideally situated to coordinate care and update members on vaccination opportunities, experts tell AIS Health.

The FDA on Dec. 11 authorized emergency use of the COVID-19 vaccine made by Pfizer Inc. and BioNTech in individuals age 16 and older. Then the agency on Dec. 18 authorized Moderna’s vaccine for emergency use in people 18 years or older.

Health care workers and nursing home residents have been designated by the Centers for Disease Control and Prevention as the first group (phase 1a) to receive the vaccine.

“I think the paradigm of changing tires on a moving bus applies to this venture,” remarks Margaret Murray, CEO of the Association for Community Affiliated Plans (ACAP). “We certainly support the idea of getting the vaccine to front-line health care workers and the very most vulnerable populations, such as nursing home residents, first. So CDC is off to a good start.”

But ACAP, which is composed of 77 not-for-profit safety net health plans covering Medicaid, marketplace and MA enrollees, is concerned about other vulnerable seniors — such as those who are very frail or homebound and likely dual eligible — who are not part of that first round. “We need to think about them in the next wave,” Murray tells AIS Health via email. “We also need to consider how most equitably to distribute the vaccine.”

In a preliminary analysis — or snapshot — of fee-for-service Medicare claims and Medicare Advantage encounter data from Jan. 1 to Sept. 12, 2020, CMS reported 1.19 million COVID-19 cases and 332,672 related hospitalizations among all 62.3 million beneficiaries. That’s a rate of 517 hospitalizations per 100,000 lives. The data puts into stark clarity what is already suspected about the virus: those at the highest risk of developing severe complications are older, lower income, have preexisting conditions and (with the exception of Asian beneficiaries) are more likely to be racial minorities.

Radar On Market Access: Centene, UnitedHealth Ring in New Year With M&A

January 14, 2021

Although 2021 has just begun, major health insurers appear to be wasting no time when it comes to spending the influx of cash that they’ve collected as a result of lower routine health care utilization during the COVID-19 pandemic, AIS Health reported.

On Jan. 4, Centene Corp. revealed that it struck a deal to purchase Magellan Health, Inc. for $2.2 billion, a transaction that promises to augment the insurer’s existing behavioral health, specialty health care and pharmacy management assets. Two days later, UnitedHealth Group said it plans to purchase the technology company Change Healthcare for approximately $13 billion in a deal that will bolster its analytics and advisory arm, OptumInsight.

Although 2021 has just begun, major health insurers appear to be wasting no time when it comes to spending the influx of cash that they’ve collected as a result of lower routine health care utilization during the COVID-19 pandemic, AIS Health reported.

On Jan. 4, Centene Corp. revealed that it struck a deal to purchase Magellan Health, Inc. for $2.2 billion, a transaction that promises to augment the insurer’s existing behavioral health, specialty health care and pharmacy management assets. Two days later, UnitedHealth Group said it plans to purchase the technology company Change Healthcare for approximately $13 billion in a deal that will bolster its analytics and advisory arm, OptumInsight.

Taken together, Centene and UnitedHealth’s moves are “really interesting and sizable transactions to kick off the new year given that the buyers were clearly going through [due] diligence during a volatile election cycle and pandemic,” observes Timothy Epple, a principal at Avalere Health.

Centene’s latest acquisition is especially timely given the news that Democrats will have control of the White House and the House of Representatives, plus a narrow majority in the Senate, Epple suggests. The election results “suddenly make that deal look even more attractive given the probable stability and growth tailwinds for government and [Affordable Care Act] markets,” he says.

Further, “while the Change transaction is riding analytic tailwinds that are somewhat party-agnostic, reduced volatility in the near-term policy outlook is a positive for M&A activity across the health care ecosystem,” Epple adds.

Wall Street analysts say the deals make strategic sense for the acquiring organizations, which have been aggressive about inorganic growth.

“We see this transaction as complementary as it builds on [UnitedHealth’s] focus and expansion of Optum, with Change’s data and analytics platform augmenting offerings within OptumInsight,” Citi analyst Ralph Giacobbe wrote in a note to investors. “We expect continued M&A from [UnitedHealth] in its efforts to continue to grow and scale its Optum segments, as we have seen over the years,” he added.

Regarding the Centene/Magellan tie-up, Oppenheimer’s Michael Wiederhorn offered an optimistic take. “Overall, we believe this deal continues Centene’s efforts to strengthen its capabilities in serving the highly complex portion of the government population,” he advised investors.

MMIT Reality Check on Non-Small Cell Lung Cancer ALK+ or ROS1+ (Jan 2021)

January 8, 2021

According to our recent payer coverage analysis for non-small cell lung cancer ALK+ or ROS1+ treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for non-small cell lung cancer ALK+ or ROS1+ 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 non-small cell lung cancer ALK+ or ROS1+ treatments shows that under the pharmacy benefit, about 75% of the lives under commercial formularies are covered with utilization management restrictions.

Trends: Competition is growing, with six different drugs from four different manufacturers targeting these gene mutations in patients with NSCLC.

Radar On Market Access: Supreme Court’s ACA Ruling May Upend Biosimilars Market

January 7, 2021

As the Supreme Court decides on the fate of the Affordable Care Act (ACA), much of the focus has been on the people who would lose health insurance coverage and protections for pre-existing conditions if the law is overturned. Another ramification of such a ruling is that the biosimilars market could be completely upended, AIS Health reported.

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) created the 351(k) biosimilar pathway. After more than one attempt to get a stand-alone bill to pass, lawmakers made it part of the ACA, and it became law on March 23, 2010.

As the Supreme Court decides on the fate of the Affordable Care Act (ACA), much of the focus has been on the people who would lose health insurance coverage and protections for pre-existing conditions if the law is overturned. Another ramification of such a ruling is that the biosimilars market could be completely upended, AIS Health reported.

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) created the 351(k) biosimilar pathway. After more than one attempt to get a stand-alone bill to pass, lawmakers made it part of the ACA, and it became law on March 23, 2010.

Industry observers expect a decision on the case California v. Texas by June 2021, according to various sources. And opinions among industry experts vary on what the court will decide.

“I do think it is severable, but I am optimistic that that won’t be needed,’ says one industry expert who declines to be identified.

A second industry expert who declines to be identified points out that “there have been a fair amount of amicus briefings,” which will make the court “think twice” about doing away with the BPCIA.

“I think the outcome of the Affordable Care Act case before the Supreme Court will be similarly mixed as a ruling like last time,” says F. Randy Vogenberg, Ph.D., principal at the Institute for Integrated Healthcare. “I doubt they will rule the ACA is severable but will keep that door open….If the court strikes down the ACA entirely, biosimilars on the U.S. market or in the FDA approval pipeline would have to either be grandfathered in or face a regulatory wind-down.”

If the ACA and thus the BPCIA are struck down, “personally, I think it’s unlikely that medicines would be pulled off the market,” says source No. 2. However, if the ACA is invalidated, the Supreme Court likely would include “guidance to regulators for carrying out their order.”

“I would not expect FDA to de-approve anything already approved, but the pipeline might get more muddled,” says the first source.

All that said, “[g]ood business practices would recommend that biosimilar manufacturers should be preparing for the possibility of the ACA, and thus the BPCIA, being struck down,” recommends Vogenberg. “What should they be doing is scenario planning and being prepared for the best or worst and everything in between. If biosimilars are not available, this could impact payers that have them on formulary should a disruption occur in their marketing.”