Provider

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.

Radar On Market Access: Express Scripts Exec Urges Smarter Treatment of HIV

November 1, 2018

At the annual Medicaid Health Plans of America conference, Express Scripts Holding Co. Senior Vice President and Chief Medical Officer Steve Miller, M.D., had a simple message for health plan leaders: “You have to think long term if you’re going to have better outcomes,” AIS Health reported.

One area in which Medicaid is not heeding that call, Miller said, is how it approaches treating and preventing HIV.

While the number of HIV patients is decreasing,

At the annual Medicaid Health Plans of America conference, Express Scripts Holding Co. Senior Vice President and Chief Medical Officer Steve Miller, M.D., had a simple message for health plan leaders: “You have to think long term if you’re going to have better outcomes,” AIS Health reported.

One area in which Medicaid is not heeding that call, Miller said, is how it approaches treating and preventing HIV.

While the number of HIV patients is decreasing, the amount spent on treating HIV has risen in recent years — and the culprit is rising drug costs, Miller said. Thus, Medicaid programs and plans are often choosing to cover the least expensive medications, which tend to be multi-tablet regimens, rather than pricier single-tablet therapies, he said.

While that approach may cost less in the near term, patients treated this way are less likely to be adherent to their treatment plans than those who get a single-tablet therapy.

According to Miller, that link between medication adherence and simplified treatment regimens is key, as medication non-adherence can lead to complications that ultimately make patients more expensive to treat.

Commercial health plans, which have less of an issue with finances than Medicaid, almost always choose single-tablet regimens for patients, according to Miller. Medicaid beneficiaries with HIV, on the other hand, are getting single-tablet regimens less than 60% of the time.

“So the reality is we’re sub-optimizing that care, and therefore we’re actually going to cost ourselves a lot more in the long run,” he added.

Radar On Market Access: Proposed Part D Change Might Not Be “Catastrophic”

October 30, 2018

If the Trump administration gets its way, Medicare Part D plan sponsors may at some point be on the hook for a greater share of costs once beneficiaries reach the catastrophic phase of coverage for prescription drugs. While America’s Health Insurance Plans (AHIP) is opposed to the idea, experts tell AIS Health that the time may be ripe for such a change.

Beneficiaries enter the catastrophic coverage phase when, as of 2018,

If the Trump administration gets its way, Medicare Part D plan sponsors may at some point be on the hook for a greater share of costs once beneficiaries reach the catastrophic phase of coverage for prescription drugs. While America’s Health Insurance Plans (AHIP) is opposed to the idea, experts tell AIS Health that the time may be ripe for such a change.

Beneficiaries enter the catastrophic coverage phase when, as of 2018, their “true out-of-pocket costs” exceed $5,000. Once in that phase, beneficiaries pay no more than 5% of the total cost for their drugs, while the federal government pays 80% and the Part D plan pays 15%.

In its fiscal year 2019 budget proposal, the Trump administration suggests increasing plans’ share of costs for catastrophic coverage from 15% to 80% and shifting Medicare’s share from 80% to 20%. More recently, CMS Administrator Seema Verma said during an Oct. 18 event that the change is one area in which Part D could be “updated and modernized.”

Sean Creighton, a vice president in Avalere Health’s policy practice, says the change is probably needed because health plans will soon bear very little risk in the upper end of the Part D benefit.

AHIP, however, says it “strongly disagrees with the basic premise of this proposal — that incentives alone will produce such cost reductions.” It argues that “plans are already fully incentivized to negotiate vigorously for lower costs” and “drug companies are incentivized to provide price concessions only when leverage exists.”

Creighton says it is possible that shifting more risk to plans could result in higher premiums. But as long as the beneficiary cost-sharing in the catastrophic phase remains the same, the proposed policy change is likely to be “sort of invisible” to members, he adds.

On the other hand, increasing plans’ risk will likely cause them to step up some of their price-negotiation practices, such as excluding drugs from formularies, changing tier placement of drugs, and using prior authorization and step therapy. “So it may lead to a situation where access to particular drugs may become more restricted as the plans seek to contain costs,” Creighton says.

Radar On Market Access: Opinions Vary on MA Plans’ Use of Step Therapy in Part B

October 16, 2018

While many stakeholders have praised CMS’s move to allow Medicare Advantage (MA) plans to apply step therapy to drugs covered under Part B, others have cautioned that it could result in delays or restrictions in patients accessing much-needed medications, AIS Health reported.

On Aug. 7, CMS issued new guidance allowing MA plans to use step therapy for Part B drugs as of Jan. 1, 2019. The letter also states that those MA plans that also offer prescription drug coverage may use step therapy to have a beneficiary use a drug under Part D before stepping to one under Part B.

While many stakeholders have praised CMS’s move to allow Medicare Advantage (MA) plans to apply step therapy to drugs covered under Part B, others have cautioned that it could result in delays or restrictions in patients accessing much-needed medications, AIS Health reported.

On Aug. 7, CMS issued new guidance allowing MA plans to use step therapy for Part B drugs as of Jan. 1, 2019. The letter also states that those MA plans that also offer prescription drug coverage may use step therapy to have a beneficiary use a drug under Part D before stepping to one under Part B.

Matt Eyles, president and CEO of America’s Health Insurance Plans, praised the administration’s move. He said, “patients and families deserve the prescription drugs they need at a price they can afford. The new CMS policy helps deliver on that promise while also helping to ensure patients continue to have access to safe, effective, and evidence-based care.”

Meanwhile, some groups expressed their concerns. In a letter to HHS Secretary Alex Azar, the American Medical Association said, “The AMA is concerned about the utilization management tools frequently used by PBMs and health plans to control costs, as they often have little clinical basis and can simply be a means of shifting costs in the system. For example, prior authorization and step therapy protocols can create significant barriers for patients by delaying the start or continuation of necessary medical treatment, which can negatively affect patient health outcomes.”

In an Aug. 8 research note, Leerink analysts noted that “pharmaceutical companies could be enticed to offer rebates back to payers and plans in order to gain preferred status at the front of a step-edit or risk losing volume as a second-line or later agent. In turn, these rebates will lower drug costs for Part B MA plans and patients, but also lower pharmaceutical revenues.”

Radar On Market Access: Opinions Vary on MA Plans’ Use of Step Therapy in Part B

October 16, 2018

While many stakeholders have praised CMS’s move to allow Medicare Advantage (MA) plans to apply step therapy to drugs covered under Part B, others have cautioned that it could result in delays or restrictions in patients accessing much-needed medications, AIS Health reported.

On Aug. 7, CMS issued new guidance allowing MA plans to use step therapy for Part B drugs as of Jan. 1, 2019. The letter also states that those MA plans that also offer prescription drug coverage may use step therapy to have a beneficiary use a drug under Part D before stepping to one under Part B.

While many stakeholders have praised CMS’s move to allow Medicare Advantage (MA) plans to apply step therapy to drugs covered under Part B, others have cautioned that it could result in delays or restrictions in patients accessing much-needed medications, AIS Health reported.

On Aug. 7, CMS issued new guidance allowing MA plans to use step therapy for Part B drugs as of Jan. 1, 2019. The letter also states that those MA plans that also offer prescription drug coverage may use step therapy to have a beneficiary use a drug under Part D before stepping to one under Part B.

Matt Eyles, president and CEO of America’s Health Insurance Plans, praised the administration’s move. He said, “patients and families deserve the prescription drugs they need at a price they can afford. The new CMS policy helps deliver on that promise while also helping to ensure patients continue to have access to safe, effective, and evidence-based care.”

Meanwhile, some groups expressed their concerns. In a letter to HHS Secretary Alex Azar, the American Medical Association said, “The AMA is concerned about the utilization management tools frequently used by PBMs and health plans to control costs, as they often have little clinical basis and can simply be a means of shifting costs in the system. For example, prior authorization and step therapy protocols can create significant barriers for patients by delaying the start or continuation of necessary medical treatment, which can negatively affect patient health outcomes.”

In an Aug. 8 research note, Leerink analysts noted that “pharmaceutical companies could be enticed to offer rebates back to payers and plans in order to gain preferred status at the front of a step-edit or risk losing volume as a second-line or later agent. In turn, these rebates will lower drug costs for Part B MA plans and patients, but also lower pharmaceutical revenues.”

Radar On Market Access: Plans Might Tap Utilization Management for Marijuana-Derived Epilepsy Drug

October 4, 2018

When a pricey, unique medication for two rare forms of childhood-onset epilepsy comes onto the market — which could happen later this year — payers are likely to cover it but will probably subject the drug to prior authorization, experts tell AIS Health.

The drug in question is Epidiolex (cannabidiol), which in June became the first FDA-approved treatment that contains a purified drug substance derived from marijuana. The oral solution, produced by GW Pharmaceuticals plc,

When a pricey, unique medication for two rare forms of childhood-onset epilepsy comes onto the market — which could happen later this year — payers are likely to cover it but will probably subject the drug to prior authorization, experts tell AIS Health.
The drug in question is Epidiolex (cannabidiol), which in June became the first FDA-approved treatment that contains a purified drug substance derived from marijuana. The oral solution, produced by GW Pharmaceuticals plc, is indicated for the treatment of seizures associated with Lennox-Gastaut syndrome (LGS) or Dravet syndrome for patients ages two and older.
The average gross price for Epidiolex will be $32,500 per year, Julian Gangolli, North America president of GW Pharmaceuticals, said during the company’s Aug. 7 earnings call, according to a transcript from Seeking Alpha.
Currently, Epidiolex is classified as a Schedule I drug by the federal government. Schedule I drugs are defined as those with no currently accepted medical use and a high potential for abuse — a list that includes heroin, ecstasy and LSD, according to the U.S. Drug Enforcement Administration (DEA).
On Sept. 19, Benzinga reported — citing a research note from Morgan Stanley — that the DEA was preparing to reschedule Epidiolex as a Schedule IV drug, a classification that would put it on the same level as drugs like Xanax, Valium and Ambien.
As for how payers will handle Epidiolex, Mesfin Tegenu, president of PerformRx, LLC, says “plans are naturally cautious regarding any new medication to market.”
“Epidiolex has a very specific FDA approved indication for specific forms of seizures, Lennox-Gastaut syndrome (LGS) or Dravet syndrome,” he says. “Off label use may be a concern, so most plans are likely to place a prior authorization on the medication to ensure appropriate use.”
John Watkins, Pharm.D., pharmacy manager, formulary development for Premera Blue Cross, says the Washington-based insurer is taking a similar approach. “It will be covered with PA [prior authorization] to label,” he tells AIS Health.