Perspectives

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.”

Perspectives on Massachusetts’ Medicaid Drug Pricing Plan Rejection

August 23, 2018

In July, CMS denied a waiver request by Massachusetts to allow its Medicaid program, MassHealth, to use a closed formulary that excludes certain drugs. But the agency also left the door open on the state’s pursuit of tighter drug controls, AIS Health reported.

According to Jack Hoadley, Ph.D., a research professor emeritus in Georgetown University’s Health Policy Institute, “the Massachusetts proposal brought to the table a new approach to increase its leverage to get lower drug prices,

In July, CMS denied a waiver request by Massachusetts to allow its Medicaid program, MassHealth, to use a closed formulary that excludes certain drugs. But the agency also left the door open on the state’s pursuit of tighter drug controls, AIS Health reported.

According to Jack Hoadley, Ph.D., a research professor emeritus in Georgetown University’s Health Policy Institute, “the Massachusetts proposal brought to the table a new approach to increase its leverage to get lower drug prices, but an approach that left many unanswered questions. Its rejection by CMS should not stop states from continuing to seek new ways to achieve lower prices. The key is how to balance maintaining access to needed drugs with tools to get lower prices.”

State officials said CMS wouldn’t consider the pharmacy waiver without Massachusetts withdrawing from the federal Medicaid Drug Rebate Program (MDRP) and eliminating pharmacy as an optional Medicaid benefit.

“CMS is saying you must build your own program from scratch, effectively,” which would force Massachusetts to withdraw from a “very effective” Medicaid statutory rebate program and negotiate on its own, Hoadley says. Most states face a similar “pressure point” in their pharmacy spend, he notes.

Spokesperson Elissa Snook of the Massachusetts Executive Office of Health and Human Services, which oversees MassHealth, says the program “will continue to work with our state legislature, the pharmaceutical industry, the federal government and others” on the effort.

MassHealth receives about $900 million in rebates annually across all prescription drug spending, with the MDRP as the foundation for these rebates, and more than $550 million is returned to CMS, according to Snook.

Overall, MassHealth’s pharmacy spending doubled from $1.1 billion to $2.2 billion over the past five years, twice as fast as spending growth for other program components.

Perspectives on REMS Programs

August 9, 2018

The FDA’s Risk Evaluation and Mitigation Strategy initiative — under which the agency requires pharmacy manufacturers to develop a REMS program for certain therapies in order to manage risks while still allowing people to have access to it — may present challenges to many stakeholders. But manufacturers in particular may use REMS to their advantage, AIS Health reported.

According to Glenn Carroll, principal at Deloitte, one of the top challenges that manufacturers may grapple with is the “increasing complexity of developing and administering”

The FDA’s Risk Evaluation and Mitigation Strategy initiative — under which the agency requires pharmacy manufacturers to develop a REMS program for certain therapies in order to manage risks while still allowing people to have access to it — may present challenges to many stakeholders. But manufacturers in particular may use REMS to their advantage, AIS Health reported.

According to Glenn Carroll, principal at Deloitte, one of the top challenges that manufacturers may grapple with is the “increasing complexity of developing and administering” REMS. He says, “many of the REMS being developed today are more rigorous to implement than what we’ve seen in the past.”

Another challenge for manufacturers is in “demonstrating the overall effectiveness” of the programs. “Currently there have been very few studies designed to measure the impact of these programs on driving improvements in patient adherence and/or safety,” Carroll says.

He adds that for REMS programs, another concern has been their use to restrict access to certain drugs by generics manufacturers, which further inhibits the development of therapeutic equivalents.

Peter Gilmore, a principal in KPMG Strategy, says beyond manufacturers, REMS can put “a lot of burden on health care providers” because they must enroll patients and track and collect data, resulting in a “hassle factor for using a drug.” The programs also might require providers to undergo some processes they normally wouldn’t, such as administering additional diagnostic tests.”

Payers may be the least affected by REMS, as they already have prior-authorization requirements for expensive drugs in place. Payers can benefit from “better access to more information and data,” Gilmore says.

But while having to implement a REMS is “not desirable,” manufacturers can use these programs to their advantage, maintains Gilmore. “Patient data can help manufacturers get to some level of” insight about a drug, including patient and provider behavior, which can “help them employ other tactics…to bolster the long-term success of the drug.”