Perspectives

Perspectives on Electronic Real-Time Benefit Tool

August 8, 2019

CMS in a final Medicare Advantage and Part D drug pricing rule posted in May finalized the requirement that Part D sponsors implement an electronic Real-Time Benefit Tool (RTBT). While the tool offers the potential to accelerate electronic prescribing, improve formulary adherence and lower prescription drug spending, it may pose a heavy information technology burden for some plans and require effort on the part of plans to encourage prescriber adoption, AIS Health reported.

CMS in a final Medicare Advantage and Part D drug pricing rule posted in May finalized the requirement that Part D sponsors implement an electronic Real-Time Benefit Tool (RTBT). While the tool offers the potential to accelerate electronic prescribing, improve formulary adherence and lower prescription drug spending, it may pose a heavy information technology burden for some plans and require effort on the part of plans to encourage prescriber adoption, AIS Health reported.

According to the rule, each Part D sponsor must implement at least one RTBT capable of integrating with at least one prescriber’s e-prescribing system or electronic health record (EHR) to “provide prescribers who care for its enrollees complete, accurate, timely and clinically appropriate patient-specific real-time formulary and benefit (F&B) information (including cost, formulary alternative and utilization management requirements)” by Jan. 1, 2021.

For proponents of e-prescribing like Point-of-Care Partners, LLC, the new requirement is “really exciting,” says Tony Schueth, CEO and managing partner of the health IT management consulting firm. “We have been trying to include formulary in the e-prescribing process for a long time, and the way we were doing formulary in the past just wasn’t patient-specific enough. So we’re at a really important juncture in the evolution of electronic prescribing and the benefit information being integrated.”

Heidi Harmon, a senior consultant with Gorman Health Group, says pushing back the start date of the RTBT to 2021 was very good news for plans because it will involve a “massive IT undertaking.” CMS had originally proposed that sponsors have the tool ready by Jan. 1, 2020, but pushed back the deadline after hearing from concerned stakeholders, the majority of which suggested delaying the start date until an industry standard becomes available. Harmon also notes that the requirement that a plan have a tool that can work with one prescriber’s system could be interpreted as one prescriber group’s system.

Perspectives on New York’s Pricing Transparency Bill

July 25, 2019

Lawmakers in New York in June approved wide-ranging legislation designed to require pricing transparency from PBMs and to eliminate key PBM practices. But the bill could potentially limit plans’ ability to respond to pricing moves by manufacturers, one consultant tells AIS Health.

Lawmakers in New York in June approved wide-ranging legislation designed to require pricing transparency from PBMs and to eliminate key PBM practices. But the bill could potentially limit plans’ ability to respond to pricing moves by manufacturers, one consultant tells AIS Health.

The New York bill (S.B. 6531) would require that PBMs disclose key pricing and rebate information and pass through all rebates and discounts to the plans and payers, and that they act in the best interests of the covered individual and the health plan or provider.

The New York Health Plan Association, which did not support the legislation, is particularly concerned with the “best interests” section, which imposes a fiduciary relationship on PBMs “in all but name,” says Ashley Stuart, director of government affairs for the association.

The legislation also would prohibit mid-year formulary changes and drug substitutions, and it would require PBMs operating in the state to be licensed beginning next year.

Josh Golden at Arthur J. Gallagher & Co.’s Solid Benefit Guidance says, “formulary strategies are designed to help keep drug costs in check. In moving forward with this legislation, the state potentially limits the ability of health plans to apply pricing pressure on pharmaceutical manufacturers throughout the year.”

More generally, the legislation will lead to higher health insurance premiums for employers and consumers, warned New York Health Plan Association President and CEO Eric Linzer in a statement.

The legislation comes at a time when several states are considering efforts to rein in PBMs. “At least four or five states are looking at the impact of Medicaid [pharmacy benefit] price transparency,” says Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors. “It goes back to the larger fundamental conversation of what states should be looking at — they recognize there’s money under the table, especially in the PBM space.”

Perspectives on Express Script’s “Digital Health Formulary”

June 27, 2019

Cigna Corp.’s Express Script PBM expects to introduce the industry’s first stand-alone “digital health formulary” in 2020, the company said May 16. It intends to use a uniform review process to ensure the safety and quality of apps and devices on the market for diabetes, cardiovascular and pulmonary conditions and behavioral health, AIS Health reported.

Cigna Corp.’s Express Script PBM expects to introduce the industry’s first stand-alone “digital health formulary” in 2020, the company said May 16. It intends to use a uniform review process to ensure the safety and quality of apps and devices on the market for diabetes, cardiovascular and pulmonary conditions and behavioral health, AIS Health reported.

By creating a digital formulary, Express Scripts “is using old hat methods to manage these new digital health solutions much like they do on brand and generic drugs or other therapies via utilization management,” says Nathan Ray, senior principal in business consulting firm West Monroe Partners’ health care and life sciences practice.

“A formulary allows the administrator to steer demand and control reimbursement for the use of preferred solutions,” Ray says. “Management via formulary has its upsides: It can reduce prices paid by payers and consumers.”

Moreover, digital health might be only the first step as PBMs ask what else they can put through their channel, says Ashraf Shehata, a principal in KPMG’s health care life sciences advisory practice and the firm’s Global Healthcare Center of Excellence.

Dea Belazi, Pharm.D., president and CEO of AscellaHealth, says it makes sense to think of the formulary pharmacy and therapeutics process as a coordinated effort to evaluate the merits of drugs or technologies — or for broader applications.

Yet “at the end of the day, how is this any different than what they’re doing today?” he asks. “Is there going to be an impact in either cost or outcomes in this new digital formulary process? Are numbers going to be different? It would be amazing” if there were improvements.

Perspectives on CMS’s Drug Pricing Proposals

June 13, 2019

When CMS issued the final rule on Medicare Advantage and Part D drug pricing on May 16, the agency touted its policy changes as ensuring consumers get greater transparency into the cost of Part D prescription drugs and enabling MA plans to negotiate better prices for physician-administered medicines in Part C. Yet, after receiving 4,000-plus comments related to pharmacy price concessions on negotiated price, CMS held back, saying it won’t implement this policy for 2020 — or follow through on proposed exceptions to Part D protected drug classes, AIS Health reported.

When CMS issued the final rule on Medicare Advantage and Part D drug pricing on May 16, the agency touted its policy changes as ensuring consumers get greater transparency into the cost of Part D prescription drugs and enabling MA plans to negotiate better prices for physician-administered medicines in Part C. Yet, after receiving 4,000-plus comments related to pharmacy price concessions on negotiated price, CMS held back, saying it won’t implement this policy for 2020 — or follow through on proposed exceptions to Part D protected drug classes, AIS Health reported.

Among numerous provisions, CMS’s final rule implements the statutory prohibition against gag clauses in pharmacy contracts, barring Part D plans from penalizing pharmacies that disclose a lower cash price to enrollees. But the agency decided against implementing a policy redefining negotiated price as the lowest possible, baseline payment to pharmacies.

Leerink analyst Ana Gupte sees industry winners across the board. CMS “did not follow through on its proposal to exclude certain protected drug classes, offering a win for the biopharma industry,” she said in a May 17 note. “Managed Care and PBMs also garnered a win as CMS did not follow through on the proposals to pass through pharmacy pricing concessions in the form of DIR [direct and indirect remuneration] fees to patients through reduced cost sharing.”

Dea Belazi, Pharm.D., president and CEO of AscellaHealth, offers a blunter assessment. “I think the final Part D rule is more rhetoric than anything,” he tells AIS Health.

As for negotiated price, “They’re not ready to do anything on pricing at this point,” Belazi says. “I think CMS, with HHS, opened up a Pandora’s box and realized this is not as easy as it seems and they need more time.”

Perspectives on Diabetic Drug’s Kidney Benefit

May 30, 2019

The potential use of Invokana (canagliflozin) for chronic kidney disease as well as type 2 diabetes, its current indicated use, recently attracted national headlines. If Janssen Pharmaceuticals, Inc.’s supplemental indication for its medication is approved by the FDA, “it would be the first new treatment for diabetic kidney disease in decades,” the National Kidney Foundation said.

The potential use of Invokana (canagliflozin) for chronic kidney disease as well as type 2 diabetes, its current indicated use, recently attracted national headlines. If Janssen Pharmaceuticals, Inc.’s supplemental indication for its medication is approved by the FDA, “it would be the first new treatment for diabetic kidney disease in decades,” the National Kidney Foundation said.

The kidney foundation points out that diabetes is a key risk factor for chronic kidney disease. The group says it anticipates strong uptake of Invokana by clinicians and payers facing “high costs and management challenges” in treating advanced kidney disease in people with type 2 diabetes, AIS Health reported.

But Mesfin Tegenu, R.Ph., president of PerformRx, LLC, doesn’t expect a major impact on treatment. That’s because Invokana joins Jardiance (empagliflozin) and Farxiga (dapagliflozin), among others, in a class of type 2 diabetes medications called SGLT2 inhibitors — and some rival products already provide similar benefits, he says.

In 2018, the American Diabetes Association and European Association for the Study of Diabetes issued a consensus statement that “already recommends Jardiance in diabetic CKD [i.e., chronic kidney disease] patients due to the renal benefit,” Tegenu adds.

In the recently announced results for Invokana’s CREDENCE study, Invokana was found to reduce the risk of dialysis or the need for a kidney transplant, which Tegenu says is “good news for plan payers and patients since in addition cardiovascular benefits were also found.”

“However,” he adds, “[cardiovascular] benefits have been known for at least a year and guidelines already recommend these drugs in [chronic kidney disease] patients.”

Perspectives on BioScrip/Option Care Deal

May 16, 2019

Two of the country’s largest independent infusion services providers recently unveiled that they have entered into a merger agreement. After coming together, BioScrip, Inc. and Option Care Enterprises, Inc. would be the No. 2 home/alternate site infusion provider in the United States, AIS Health reported.

Two of the country’s largest independent infusion services providers recently unveiled that they have entered into a merger agreement. After coming together, BioScrip, Inc. and Option Care Enterprises, Inc. would be the No. 2 home/alternate site infusion provider in the United States, AIS Health reported.

Under the terms of the deal, publicly traded BioScrip would issue new shares to Madison Dearborn Partners, LLC and Walgreens Boots Alliance, Inc., which are the Option Care shareholders, giving them 80% of BioScrip’s stock, with current BioScrip shareholders holding the remaining 20%. The new company would be publicly traded.

“Scale is critical to succeed in home infusion/alternate site services,” says Bill Sullivan, principal consultant for Specialty Pharmacy Solutions LLC. “Opportunity to build scale…is important for payer access and better cost-of-goods pricing through wholesalers and in some cases direct with manufacturers.”

“From the pharma side, I’m not going to say it’s easy from a distribution standpoint, but with limited-distribution drugs…and an entity that covers 96% of the U.S. population, it’s easy for a company to pick a partner like this,” says Pat Clifford, managing director at The Braff Group.

“Considering that the home/site infusion industry has been growing at two to three times the rate of U.S. GDP [i.e., gross domestic product], we think it is no surprise that a national player would emerge eventually,” remarks Bill Bolding, an analyst at Provident.

Benefits of the deal include the fact that “integrating patient care from outpatient through the home setting has the potential to improve outcomes significantly, all while minimizing the traditional waste/cost that comes with the patient transition,” Bolding tells AIS Health.

While cost cutting is an additional benefit of the arrangement, it also may prove to be a challenge, says Clifford. “In markets with duplicate locations,” they would be able to combine them, “but if they are overlapping a lot, some locations may need to be shut down.”

Another potential challenge is the fact that “no individual player has controlled 10%-25% [of the] infusion market to date, depending on how you measure the space,” says Bolding. “There is no playbook that this executive team can copy to merge site and home infusion at this scale, and as always, reimbursement risk should be considered.”