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Radar On Market Access: New Generic HIV Drug May Impact PrEP Coverage, Not HIV Coverage

March 5, 2020

A generic version of Truvada coming on the market later this year will affect how payers cover pre-exposure prophylaxis (PrEP), but it will not significantly change how payers cover HIV drugs, experts tell AIS Health.

A generic version of Truvada coming on the market later this year will affect how payers cover pre-exposure prophylaxis (PrEP), but it will not significantly change how payers cover HIV drugs, experts tell AIS Health.

Gilead Sciences, Inc.’s Truvada (emtricitabine/tenofovir disoproxil fumarate) was approved by the FDA in 2004 to treat HIV infection in combination with other antiretroviral drugs. In 2012, it also was approved as the first drug for PrEP. In March 2019, Gilead announced that it had entered into an agreement with Teva Pharmaceutical Industries Ltd. to allow the company to launch its generic version on Sept. 30, 2020.

Payer coverage of PrEP also will be affected by a recommendation from the U.S. Preventive Services Task Force (USPSTF). In 2019, the USPSTF recommended PrEP therapy for those at high risk of HIV acquisition, according to a white paper written by Lynn Nishida, R.Ph., vice president of clinical product and contracting for WithMe Health.

“With the USPSTF recommendation, Medicaid expansion programs and health plans are going to have to cover PrEP without any cost sharing,” says Tim Horn, director of medication access and pricing at the National Alliance of State & Territorial AIDS Directors. Therefore, payers will move toward generic versions.

Dan Mendelson, founder and former CEO of consulting firm Avalere Health, says that whenever a drug goes generic, payers usually have a plan in place to make sure the generic is used. “The more expensive the drug, the more likely that the plan will be comprehensive and aggressive,” he says.

Since HIV is one of the six protected classes in the Medicare Part D program, Part D plans typically cover all HIV products, says Michael Schneider, principal at Avalere Health, as there is little to no rebating in the category. “So, there is really no incentive for the PBMs acting on behalf of their clients, the plans, to do anything in terms of a utilization management standpoint or negotiation standpoint outside of just bringing the generics on formulary.”

Most of the branded HIV products are in the Part D specialty tier, requiring coinsurance, due to their high cost. When a generic comes on the market, plans typically will remove the branded product and then place the generic in the specialty tier or the preferred brand tier depending on the cost of the generic product, he says.

Radar On Market Access: Tenn. Blues’ White Bagging Policy Sees Pushback from Providers

March 3, 2020

BlueCross BlueShield of Tennessee, Inc. has received tremendous pushback from physicians on its decision to implement a policy requiring them to get provider-administered therapies from specialty pharmacies, AIS Health reported.

BlueCross BlueShield of Tennessee, Inc. has received tremendous pushback from physicians on its decision to implement a policy requiring them to get provider-administered therapies from specialty pharmacies, AIS Health reported.

Providers traditionally have acquired therapies they administer through a practice known as buy and bill, by which they will purchase a drug from a wholesaler or distributor, keep it in their office and administer it to patients as needed, submitting a claim to the payer afterwards.

But some payers mandate that providers purchase these drugs through a specialty pharmacy, a practice known as white bagging. This means the provider never takes ownership of the drug, and a patient will pay their copayment or coinsurance to the specialty pharmacy after the physician orders the drug. The specialty pharmacy then delivers the medication directly to the provider.

The Tennessee Blues plan launched a white-bagging program Jan. 1, with a six-month transition period, for self-funded employers who opt into it. But many physicians have spoken out against the new policy, and, most recently, a Feb. 6 letter from eight specialty societies asked the Tennessee Blues plan to reconsider the program altogether.

The writers maintained that “practices currently engaging in the buy-and-bill model operate under thin margins,” which would be eliminated with the implementation of white bagging. They maintained that the results would be a shift in site of care from provider offices to the more expensive hospital setting, boosting costs for both the insurer and its members.

While provider margins would decline, offices’ administrative costs would increase. They also asserted that the policy would result in drug waste since a white-bagged drug is specific to a patient, as opposed to buy and bill, which does not have patient-specific therapies.

Yet according to Bill Sullivan, principal consultant at Specialty Pharmacy Solutions LLC, the contention that specialty pharmacies cannot ensure the proper handling and safe delivery of drugs “is simply false.” He also pointed out that from 2014 to 2018, the average price of provider-administered drugs rose 73%.

In Jan. 8 article on the Tennessee Blues plan’s website, Natalie Tate, Pharm.D., vice president of pharmacy at the Blues plan, said that the policy will apply to about 5,500 of its 3.5 million members. Tate also said that 100 employer groups had opted in to participate, and the plan estimated that they would save approximately 20% on the drugs.

Radar on Market Access: Future of Medicaid Work Requirements Dims After Arkansas Demo Is Struck Down Again

February 27, 2020

A three-judge federal appeals court panel on Feb. 14 sided with a lower court and unanimously ruled that Arkansas’ Medicaid work requirements are unlawful because they don’t align with the chief objective of the Medicaid program — providing access to medical care to those who can’t afford it, AIS Health reported.

A three-judge federal appeals court panel on Feb. 14 sided with a lower court and unanimously ruled that Arkansas’ Medicaid work requirements are unlawful because they don’t align with the chief objective of the Medicaid program — providing access to medical care to those who can’t afford it, AIS Health reported.

“This certainly puts a damper on their plans,” says Joan Alker, a research professor and executive director of the Georgetown Center for Children and Families, referring to other states’ hopes to set up similar Medicaid waiver demonstrations.

In addition to Arkansas’ program, CMS has approved Medicaid waivers that include work requirements in Arizona, Indiana, Kentucky, Michigan, New Hampshire, Ohio, South Carolina, Utah and Wisconsin. Both Kentucky and New Hampshire’s waiver programs have been struck down in court, and Kentucky has since abandoned its appeal after a Democratic governor, Andy Beshear, replaced Republican Matt Bevin.

Arizona and Indiana voluntarily suspended their programs, Alker noted in a Feb. 14 blog post, while Michigan’s has been challenged in court. Meanwhile, an additional 10 states have applied for Medicaid waivers that include work requirements.

“I do think it [the appeals court ruling] will likely inhibit states from moving forward with work requirements waivers that have already been approved by CMS,” says Charles Luband, a partner in the health care practice of the law firm Dentons. “It is possible that CMS will continue to accept requests for work requirements and may even continue to approve them, but if they do, CMS is going to have to try harder to meet the standard that’s set out here” in the appeals court ruling, Luband says.

CMS, for its part, is reviewing and evaluating the appeals court’s opinion in order to determine next steps. Arkansas Gov. Asa Hutchinson (R) said in a statement that he hopes the Supreme Court will review the ruling in the case.

However, Luband says that may not be likely. “The [Supreme] Court generally likes to take cases when there is a split between the circuits, and there’s none here,” he says.

Radar On Market Access: CVS Touts Aetna’s Contribution; Molina Exchange Business Stumbles

February 25, 2020

During a Feb. 12 presentation outlining its 2019 financial results, CVS Health Corp. touted a “successful first full year with Aetna,” saying the transaction produced “synergies above expectations” at approximately $500 million. And CVS’s Health Benefits segment posted a “solid” fourth quarter, in the words of Citi Research securities analyst Ralph Giacobbe.

During a Feb. 12 presentation outlining its 2019 financial results, CVS Health Corp. touted a “successful first full year with Aetna,” saying the transaction produced “synergies above expectations” at approximately $500 million. And CVS’s Health Benefits segment posted a “solid” fourth quarter, in the words of Citi Research securities analyst Ralph Giacobbe.

Across its enterprise in 2019, CVS delivered adjusted earnings per share (EPS) of $7.08 with total revenues of nearly $257 billion — a 32% year-over-year increase, CEO Larry Merlo told investors during the company’s earnings call, per a transcript of the call published by the Motley Fool.

For the fourth quarter of 2019, CVS reported an EPS of $1.73, topping the consensus estimate of $1.68. Giacobbe noted that revenue “was particularly better” in CVS’s PBM segment.

For Molina Healthcare Inc., the firm “was perhaps a victim of its own success” in the fourth quarter of 2019, Jefferies analysts David Windley and David Styblo advised investors on Feb. 12. The company’s management “has executed the turnaround story so well that we and others expected the ’20 HIX [health insurance exchange] pivot to land gently as well,” they wrote. Instead, that business segment missed its earnings target by roughly $75 million, the Jefferies analysts advised.

Molina’s Affordable Care Act exchange “pivot” involved the insurer lowering its prices in a bid to increase enrollment, Windley and Styblo explained. However, Molina’s lower prices “weren’t, by themselves, enticing enough,” they wrote. “With lower pricing, standard broker expenses, and an infrastructure built for larger membership, ’20 margins get squeezed by 550 [basis points], or 53%, leading to the 50% profit decline.”

However, Molina’s two pending acquisitions — a $40 million deal to buy New York Medicaid insurer YourCare HealthPlan and a $50 million deal to add Illinois-based NextLevel Health Partners — “present upside,” the analysts advised.

Perspectives on Part D Reform in 2020

February 20, 2020

If Congress or the Trump administration are able to enact any type of drug-pricing reform during 2020, it’s likely to be a redesign of Medicare Part D, industry experts tell AIS Health.

If Congress or the Trump administration are able to enact any type of drug-pricing reform during 2020, it’s likely to be a redesign of Medicare Part D, industry experts tell AIS Health.

In the Senate, tweaking the Part D benefit is part of a larger piece of bipartisan legislation (S. 2543), championed by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.). From the House, there’s the sweeping legislation (H.R. 3) proffered by Speaker Nancy Pelosi (D-Calif.).

Both bills would implement out-of-pocket spending caps for Part D beneficiaries and considerably change how costs are divided up in the catastrophic phase of coverage. They would also require drug manufacturers to repay Medicare if certain Part B or Part D drug prices rise faster than inflation.

“If you look at both the House and the Senate bills that have been put forward here, those [Part D] designs look very similar to one another, so I’m somewhat optimistic that…maybe there’s an opportunity for that to move forward,” says Stacie Dusetzina, an associate professor of health policy at the Vanderbilt University School of Medicine.

However, Elizabeth Carpenter at Avalere Health contends that “it is unlikely in this environment that any drug pricing legislation would move as a standalone bill.” The most likely pre-election vehicle for a Part D redesign would be the health care extenders package that expires in May, she adds.

Gerard Anderson, a professor at Johns Hopkins University Bloomberg School of Public Health, is more optimistic. “Drug pricing is the No. 1 issue for most voters when they’re talking about health care,” he points out. “So they’re going to feel a strong pressure” to pass something in Congress. Given that dynamic, he says he expects the Wyden/Grassley bill is likely to pass this year.

In whatever form a Part D redesign passes, Dusetzina says the biggest winner would be patients. While manufacturers and health plans would be on the hook for more spending in the catastrophic coverage phase, “on net, it probably isn’t very harmful for any one entity,” she contends.

Radar On Market Access: Payers Try New Strategies to Control Diabetes Drug Costs

February 20, 2020

With the cost of diabetes drugs still growing, PBMs and payers are looking for more innovative strategies to hold down costs, AIS Health reported. For some, that might include a strategy similar to the one recently unveiled by CVS Health Corp.’s Caremark unit. The plan, called RxZERO, offers a slimmer formulary for the diabetes drug class, but with no out-of-pocket costs for members.

With the cost of diabetes drugs still growing, PBMs and payers are looking for more innovative strategies to hold down costs, AIS Health reported. For some, that might include a strategy similar to the one recently unveiled by CVS Health Corp.’s Caremark unit. The plan, called RxZERO, offers a slimmer formulary for the diabetes drug class, but with no out-of-pocket costs for members.

Mike Schneider, a principal in the commercialization and market access practice at Avalere Health, says the plan is innovative. “You’ve seen Express Scripts do something where they’re offering specific insulins at very low out-of-pocket costs, but this is the first time I’ve seen a PBM come up with a way to eliminate out-of-pocket costs completely,” he tells AIS Health.

With the elimination of copays and other cost-sharing payments for diabetes drugs, CVS is betting members will better adhere to drug regimens and potentially avoid unnecessary hospitalizations and other services.

But these types of plans might not work for all member populations. Marc Guieb, a pharmacy consultant at Milliman, Inc., says member satisfaction can play a part in whether a plan sponsor goes this route, or sticks to a more traditional strategy that places higher-cost drugs in a step therapy plan.

The market for diabetes drugs is tight, with a few big manufacturers that all have similar prices. But there’s one new player, Civica Rx, that’s aiming to change that. In January, 18 plans in the Blue Cross Blue Shield Association joined with Civica Rx to produce up to 10 generic drugs at low cost by 2021.

Included in the partnership is Blue Shield of California, where Alison Lum is the vice president of pharmacy services. “The way that we’ve managed [drugs] in the past probably won’t get us to be sustainably affordable in the future,” Lum says. “We have to think about new ways of doing things.”