Perspectives

Perspectives on CVS Bid to Lower Drug Launch Prices

November 1, 2018

In an effort to pressure drug manufacturers to temper their launch prices for new drugs, CVS Health Corp. is rolling out a program in which drugs that have a price exceeding a certain cost-effectiveness threshold will be excluded from coverage, AIS Health reported.

CVS will let clients refuse to cover drugs that have a price tag of more than $100,000 per quality-adjusted life year (QALY), provided they are not designated as “breakthrough”

In an effort to pressure drug manufacturers to temper their launch prices for new drugs, CVS Health Corp. is rolling out a program in which drugs that have a price exceeding a certain cost-effectiveness threshold will be excluded from coverage, AIS Health reported.

CVS will let clients refuse to cover drugs that have a price tag of more than $100,000 per quality-adjusted life year (QALY), provided they are not designated as “breakthrough” therapies by the FDA.

What’s unique about CVS’s move is where that cost-effectiveness threshold comes from: the QALY ratio is based on publicly available analyses from the Institute for Clinical and Economic Review (ICER), a nonprofit organization that conducts comparative-effectiveness research. Experts say it’s the first instance they’re aware of in which ICER is playing a formal role in a PBM or payer’s coverage decisions.

“In theory, I think it’s a great idea,” says Art Shinn, Pharm.D., president of Managed Pharmacy Consultants, LLC. “I think their quality of work is good,” he says of ICER. “From what I have seen of their studies, I think they’re nonpartial.”

However, in a letter sent Sept. 12 to CVS Health Corp. CEO Larry Merlo, nearly 100 patient groups urged him to reconsider the company’s new policy, saying that coverage decisions based on cost-effectiveness “ignore important differences among patients and instead rely on a single, one-size-fits-all assessment.” They also say that ICER’s cost-effectiveness analyses discriminate against the chronically ill, the elderly and people with disabilities by “using algorithms that calculate their lives as ‘worth less’ than people who are younger or non-disabled.”

CVS is not alone in taking steps to push back against high launch prices for prescription drugs. Express Scripts Holding Co., one of CVS Caremark’s chief rivals, “was actually the first to market last year with a more comprehensive and flexible program through our National Preferred Formulary called Exclude at Launch, which helps protect payers from high-priced drug launches,” a spokesperson wrote in an email to AIS Health.

Jayson Slotnik, a partner at Health Policy Strategies, LLC, says CVS’s move may be an attempt to compete with Express Scripts, as the two companies are “racing for market share” in order to demonstrate growth to investors.

Perspectives on Indication-Based Formularies in Part D

October 18, 2018

The Trump administration continues to take steps aimed at bringing down 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, AIS Health reported.

Starting in 2020, “Part D sponsors may utilize step therapy-like requirements within their [prior authorization] 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,”

The Trump administration continues to take steps aimed at bringing down 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, AIS Health reported.

Starting in 2020, “Part D sponsors may utilize step therapy-like requirements within their [prior authorization] 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.

Experts say there are multiple benefits to using indication-based formularies. According to Andrew Cournoyer, R.Ph., vice president at Precision for Value, 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.”

Plans also 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,” he adds.

The policy, however, has multiple potential downsides and risks. Cournoyer points out that it won’t impact the broader population. And 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?”

Rubinstein also suggests that another challenge will be how payers can “verify the correctness of a drug written for a preferred indication.”

Perspectives on Indication-Based Formularies in Part D

October 18, 2018

The Trump administration continues to take steps aimed at bringing down 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, AIS Health reported.

Starting in 2020, “Part D sponsors may utilize step therapy-like requirements within their [prior authorization] 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,”

The Trump administration continues to take steps aimed at bringing down 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, AIS Health reported.

Starting in 2020, “Part D sponsors may utilize step therapy-like requirements within their [prior authorization] 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.

Experts say there are multiple benefits to using indication-based formularies. According to Andrew Cournoyer, R.Ph., vice president at Precision for Value, 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.”

Plans also 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,” he adds.

The policy, however, has multiple potential downsides and risks. Cournoyer points out that it won’t impact the broader population. And 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?”

Rubinstein also suggests that another challenge will be how payers can “verify the correctness of a drug written for a preferred indication.”

Perspectives on Express Scripts’ 2019 National Preferred Formulary

October 4, 2018

With 48 new exclusions on its 2019 National Preferred Formulary (NPF), Express Scripts Holidn Co. is getting more aggressive in its attempt to broaden access to pharmaceuticals and bring value to its clients, AIS Health reported. But some industry stakeholders are questioning its strategy of excluding more specialty drugs.

In 2019, the NPF will cover more than 25 million lives and will include 3,886 medications. The PBM estimates that the exclusions, including multiple sclerosis drug Extavia,

With 48 new exclusions on its 2019 National Preferred Formulary (NPF), Express Scripts Holidn Co. is getting more aggressive in its attempt to broaden access to pharmaceuticals and bring value to its clients, AIS Health reported. But some industry stakeholders are questioning its strategy of excluding more specialty drugs.
In 2019, the NPF will cover more than 25 million lives and will include 3,886 medications. The PBM estimates that the exclusions, including multiple sclerosis drug Extavia, hepatitis C medication Mevyret and HIV drug Atrupla, will save $3.2 billion.
According to Jeremy Schafer. senior vice president at Precision for Value, “The inclusion of categories like HIV, hereditary angioedema and hemophilia was certainly a surprise. Rare disease categories such as these were commonly seen as too sensitive and individualized to be managed by something as blunt as an exclusion. Even though Express Scripts is grandfathering current users, this move represents an aggressive step in the management of rare disease drugs.”
Within the hepatitis C class, Adam Fein, PH.D., CEO of Drug Channels Institute, noted in an Aug. 16 blog that excluding Mavyret is a ‘patient unfriendly change to the hepatitis C category.”
“Express Scripts has excluded Mavyret, the lowest list price product that can treat the one in four patients who has HCV [i.e., hepatitis C virus] genotype 2 and 3,” he said. “These patients can’t take Zepatier, which treats only genotypes 1 and 4. They will therefore most likely be treated with Harboni, a product with a higher list price and presumably high rebates.”
According to Express Scripts spokesperson Jennifer Luddy, “no formulary decision is based strictly on price.” The company says that “after clinical considerations, formulary preference is given to high-value therapies with the lowest net cost, achieved through low list price, rebate, or both.”

Perspectives on Step Therapy for Part B Drugs

September 20, 2018

In a move that industry analysts see as a positive development for the managed care sector, CMS issued new guidance that will allow Medicare Advantage (MA) plans to use step therapy for Part B drugs starting in 2019, AIS Health reported.

CMS is giving MA plans that offer a Part D benefit the ability to “cross-manage” drugs across Part B and Part D. In other words, plans could require patients to try alternatives covered within Part D before moving on to relatively expensive physician-administered drugs in Part B,

In a move that industry analysts see as a positive development for the managed care sector, CMS issued new guidance that will allow Medicare Advantage (MA) plans to use step therapy for Part B drugs starting in 2019, AIS Health reported.
CMS is giving MA plans that offer a Part D benefit the ability to “cross-manage” drugs across Part B and Part D. In other words, plans could require patients to try alternatives covered within Part D before moving on to relatively expensive physician-administered drugs in Part B, Credit Suisse analyst A.J. Rice explained in a research note.
MA plans currently spend roughly $12 billion yearly on Part B drugs, and HHS estimates the new policy could result in savings of between 15% and 20%, said Daniel Best, HHS Secretary Alex Azar’s senior adviser for drug pricing reform.

Rice cautioned that with step therapy adoption optional for the 2019 plan year and a lack of clarity around formal rulemaking, shared savings arrangements and beneficiary adoption, “MA plans may be cautious in adopting step therapy.”

To Leerink analyst Ana Gupte, the new guidance is “consistent with our view that MAPD [i.e., Medicare Advantage Prescription Drug] plans are well positioned to flexibly aid the administration agenda on bringing negotiated pricing into the reimbursement for Part B drugs.”
Deb Devereaux, senior vice president of pharmacy at Gorman Health Group, points out that MA plans’ formulary submissions were already completed in June, and CMS is well on its way through the formulary review stages.
Devereaux says the new policies will “potentially” help lower drug prices. More importantly, she says, CMS’s move will allow MA plans to implement already-existing treatment guidelines that call for trying certain medications before using another one.
However, she adds it may not be easy for PBMs to implement the new guidelines right away, since MA plans’ coverage decisions often involve nurses, which PBMs don’t typically employ.

Perspectives on New Class of Migraine Drug

September 6, 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, AIS Health reported.

According to Mesfin Tegenu, R.Ph., president of PerformRx, LLC, current migraine treatments supported by clinical evidence “include beta blockers, tri-cyclic anti-depressants and some seizure medications.” The situation changed in mid-May, when Amgen, Inc and Novartis AG’s Aimovig got the regulatory greenlight in the U.S.,

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, AIS Health reported.

According to Mesfin Tegenu, R.Ph., president of PerformRx, LLC, current migraine treatments supported by clinical evidence “include beta blockers, tri-cyclic anti-depressants and some seizure medications.” The situation changed in mid-May, when Amgen, Inc and Novartis AG’s Aimovig got the regulatory greenlight in the U.S., and two more calcitonin gene-related peptide (CGRP) inhibitors — Teva Pharmaceuticals’ fremanezumab and Eli Lilly and Co.’s galcanezumab — are under FDA review, says an Institute for Clinical and Economic Review (ICER) report on migraine treatments.

“The clinical data shows the drugs decrease monthly migraine days by about two days per month,” says April Kunze, Pharm.D., senior director of clinical formulary development and trend management strategy at Prime Therapeutics LLC. “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 notes that ICER’s recent review of these preventive migraine products includes recommendations for management criteria and pricing thresholds. “One of the recommendations is that patients [obtaining CGRP coverage] have tried and failed at least two to three other preventative medications prior to initiating these therapies,” she says. “Given this is the first new therapy for the treatment of migraines in many years, patients that meet these criteria may be inclined to try these drugs for migraine relief, which will increase total health care costs and drug trend in this category.”

“As other drugs gain FDA approval, it will increase the competition within this class and there will likely be preferred products selected based on varying pricing strategies,” Kunze says.

Tegenu agrees that CGRP competition “may mean the opportunity for unit cost reduction.”