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Radar On Market Access: CVS Health, Cigna Tout Benefits of PBM-Insurer Integration

November 21, 2019

Cigna Corp. and CVS Health Corp. — organizations that both recently combined a PBM and a health insurance business — are striving to prove to investors that they’re seeing valuable benefits from such vertical consolidation, AIS Health reported.

Cigna Corp. and CVS Health Corp. — organizations that both recently combined a PBM and a health insurance business — are striving to prove to investors that they’re seeing valuable benefits from such vertical consolidation, AIS Health reported.

Executives from CVS, which purchased Aetna Inc. in late 2018, during the company’s third-quarter 2019 earnings call said that having such a diversified enterprise is helping it win over PBM clients for its Caremark division.

For the 2020 PBM selling season, “our focus was to go to market with a more integrated medical-pharmacy offering,” said Karen Lynch, CVS Health executive vice president and Aetna president, according to a transcript of the call from Thomson Reuters. To that end, she noted that Caremark saw “increased traction in overall pharmacy penetration” for its employer-sponsored business, particularly among Aetna’s existing medical-benefits clients.

While CVS has won $4.9 billion in gross new business during the 2020 PBM selling season, — up from the $3.8 billion that it previously projected — “net new business is projected to be down -$6.4B overall (vs. -$7.4B previously),” due to the loss of Centene Corp.’s business and other non-renewals, Citi Research analyst Ralph Giacobbe wrote in a Nov. 6 note.

Cigna, which purchased Express Scripts Holding Co. in 2018, said a major driver of its better-than-expected quarterly financial results was the performance of its health services segment, which includes its PBM business. That book of business reported pretax operating earnings of $1.4 billion, which beat Wall Street’s consensus of $1.36 billion and far surpassed the $67 million it earned in the third quarter of 2018 — before Cigna’s purchase of Express Scripts closed.

“We were most encouraged by the PBM earnings step-up, increasing confidence [Cigna] will achieve its 2019 [earnings] target,” Jefferies analysts wrote in an Oct. 31 research note. Cigna raised its 2019 earnings per share estimate to a range of $16.80 to $17.00.

Radar On Market Access: Independent Pharmacies Push Bill to Increase Access to Part D Preferred Networks

November 19, 2019

In the Medicare Part D market in 2020, preferred cost-sharing pharmacy networks continue to be king. But because independent pharmacies often find themselves shut out of such arrangements, recently introduced legislation is seeking to change that dynamic.

In the Medicare Part D market in 2020, preferred cost-sharing pharmacy networks continue to be king. But because independent pharmacies often find themselves shut out of such arrangements, recently introduced legislation is seeking to change that dynamic.

“The Part D plans have fully adopted preferred networks over the last few years,” Adam Fein, Ph.D., president of Pembroke Consulting, Inc., and CEO of Drug Channels Institute, tells AIS Health. “The [retail] chains obviously have some different strategies but are looking for the foot traffic” that comes from offering lower cost sharing as part of a preferred network.

Meanwhile, many independent pharmacies and the pharmacy services administrative organizations (PSAOs) that represent them in negotiations with health plans are moving away from preferred Part D networks.

Fein says they “have concluded that the incremental traffic they’re going to get is not worth the profit they’re going to sacrifice.”

Ultimately, “I think the open question is, will this create access problems to preferred networks, and does CMS care?” he says.

The National Community Pharmacists Association (NCPA) isn’t counting on regulatory intervention. The organization is supporting a bill — introduced last month by U.S. Reps. Peter Welch (D-Vt.) and Morgan Griffith (R-Va.) — which would allow any pharmacy located in an underserved area to participate in a Part D preferred network as long as that pharmacy accepts the terms and conditions.

“We’re not asking for different terms and conditions, [or] higher reimbursement; we’re just asking to be able to see what the terms and conditions are to be in the preferred network and then make our best decision if we want to participate or not,” says Ronna Hauser, the president of policy and government affairs operations at NCPA.

The Pharmaceutical Care Management Association opposes the bill.

“The proposed any willing pharmacy provisions threaten the effectiveness of selective contracting with pharmacies as a tool for lowering costs,” says as statement from the PBM trade group.

Perspectives on How Drug Pricing Legislation Impacts Innovation

November 14, 2019

Many innovative new therapies are coming onto the market, but they also are launching with increasingly higher price tags, even as lawmakers and regulators launch a flurry of activity aimed at bringing down drug prices. Some industry experts caution that a few of the bills, if passed, could endanger the research and development efforts around these novel drugs, while others question that hypothesis, AIS Health reported.

Many innovative new therapies are coming onto the market, but they also are launching with increasingly higher price tags, even as lawmakers and regulators launch a flurry of activity aimed at bringing down drug prices. Some industry experts caution that a few of the bills, if passed, could endanger the research and development efforts around these novel drugs, while others question that hypothesis, AIS Health reported.

One of the proposals is the International Pricing Index, an effort by HHS to bring payments for Medicare Part B closer to what 16 other “developed economies” pay for these drugs. The Senate’s Prescription Drug Pricing Reduction Act of 2019 proposes multiple changes to Medicare Part B and Part D, as well as Medicaid. And the House’s Lower Drug Costs Now Act proposes, among other things, requiring HHS to negotiate the prices of up to 250 drugs in Medicare without competitors. Companies not coming to an agreement would be subject to financial penalties.

Drugmakers have vociferously pushed back on many of the proposals, with one of the arguments against them being that the efforts would have a chilling effect on pharma R&D.

“Empirical evidence” exists to support the idea that “lower spending on pharmaceuticals will lead to lower R&D spending and lower yield of innovative drugs,” says Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates. But “there isn’t enough evidence either way” to say whether “there aren’t policies besides spending that can impact innovation.”

“Additional patent protections and favorable tax treatment of R&D expenditures for drugs designated to treat ‘orphan’ indications appear have resulted in a large push among manufacturers and investors to bring those products to market,” he notes.

According to Lisa Kennedy, Ph.D., chief economist and managing principal at Innopiphany LLC, “the biopharmaceutical industry is responsible for approximately 70% of all innovation within health care. Price fixing of pharmaceuticals has been shown in several studies to have a knock-on effect on innovation.”

She also asserts that oncology, one of the most productive and exciting areas of innovation in the biopharmaceutical industry, could be hit particularly hard.

Radar On Market Access: ‘Breakthrough’ Cystic Fibrosis Drug Could See High Demand

November 14, 2019

The FDA recently approved a drug therapy for cystic fibrosis (CF) that is being viewed as a “game-changer” for the roughly nine in 10 patients with the rare, progressive disease who might benefit from it. Where does this leave payers facing rising specialty drug costs across the board? Industry experts predict that most payers likely will cover this latest cystic fibrosis treatment option despite an annual price tag topping $300,000, AIS Health reported.

The FDA recently approved a drug therapy for cystic fibrosis (CF) that is being viewed as a “game-changer” for the roughly nine in 10 patients with the rare, progressive disease who might benefit from it. Where does this leave payers facing rising specialty drug costs across the board? Industry experts predict that most payers likely will cover this latest cystic fibrosis treatment option despite an annual price tag topping $300,000, AIS Health reported.

Vertex Pharmaceuticals, Inc.’s Trikafta (elexacaftor/tezacaftor/ivacaftor and ivacaftor), taken as a twice-daily pill regimen, is the first triple combination therapy available to treat patients with the most common cystic fibrosis mutation. The drug directly addresses the underlying cause of the illness — mutations in the CFTR protein.

The FDA approved Trikafta for patients 12 years and older with at least one F508del mutation in the CFTR gene, which is estimated to represent 90% of the cystic fibrosis population — many of whom have had no approved therapeutic options previously.

“From a utilization management standpoint, there is nothing in the marketplace that will be more effective or significantly less costly” than Trikafta, says Yusuf Rashid, R.Ph., vice president of pharmacy and vendor relationship management at Community Health Plan of Washington.

Manu Jain, M.D., professor of medicine and pediatrics at Northwestern University’s Feinberg School of Medicine and director of Northwestern’s adult CF program, expects the payer community generally will approve Trikafta. But coverage “definitely will be uneven,” he says.

According to Jain, certain people on Kalydeco won’t be candidates for the new drug; but most on Symdeko or Orkambi likely will switch to Trikafta.

During Vertex’s third-quarter 2019 earnings call, Vertex’s Chief Commercial Officer Stuart Arbuckle said the first patients have already been prescribed Trikafta by their physicians, “underscoring the strong interest in the medicine.” But he added that such demand for the new product might prompt launch delays.

Radar On Market Access: Analysts Question Issues Surrounding Beovu’s Uptake in Full Anti-VEGF Market

November 12, 2019

Last month, the FDA approved Beovu (brolucizumab-dbll) from Novartis Pharmaceuticals Corp. for the treatment of neovascular (wet) age-related macular degeneration (AMD). The intravitreal injection will compete in a fairly crowded anti-vascular endothelial growth factor (anti-VEGF) market that is led by Eylea (aflibercept) from Regeneron Pharmaceuticals, Inc., AIS Health reported.

Last month, the FDA approved Beovu (brolucizumab-dbll) from Novartis Pharmaceuticals Corp. for the treatment of neovascular (wet) age-related macular degeneration (AMD). The intravitreal injection will compete in a fairly crowded anti-vascular endothelial growth factor (anti-VEGF) market that is led by Eylea (aflibercept) from Regeneron Pharmaceuticals, Inc., AIS Health reported.

Novartis priced Beovu at $1,850 per vial — the same per-dose price as Eylea. Following three initial monthly doses, Beovu can be administered every eight to 12 weeks. Eylea also has three initial monthly doses and then may be administered every four, eight or 12 weeks.

For the Managed Care Biologics and Injectables Index: Q4 2018, Zitter surveyed pharmacy and therapeutics (P&T) committee members who work for 51 commercial payers with 139.8 million covered lives between Nov. 30, 2018, and Jan. 7, 2019. When asked about how they would manage Beovu and Eylea, 49% said they were more likely than unlikely or significantly likely to manage the two drugs at parity.

Thirty-five percent said they were more likely than unlikely or significantly likely to start discussions with Regeneron to prefer Eylea over Beovu. Sixteen percent said it was likely or significantly likely that they would prefer Beovu over other anti-VEGF agents besides Eylea.

However, while anticipation for Beovu continued to be high after the HAWK and HARRIER clinical trial results were released, analysts questioned the drug’s label and what it does — and doesn’t — contain.

According to BioPharma Dive, “unlike Eylea, Beovu doesn’t have a four-week dosing regimen, which Piper Jaffray analyst Christopher Raymond claims could limit uptake among patients who need more frequent injections. The drug’s label included data that showed worse rates of inflammation and immunogenicity than Eylea, while also excluding secondary endpoint results that showed Beovu outperforming Eylea on several measures of eye health.”

The price also could dampen pickup. Another potential impact on the anti-VEGF class is expected biosimilar competition over the next few years.

Radar On Market Access: Some Insurers Cover Acupuncture to Combat Opioid Epidemic

November 7, 2019

Insurers seeking non-opioid alternatives to treat chronic pain increasingly are opting to cover acupuncture, despite scant medical evidence for its effectiveness. In many cases, plans are classifying acupuncture benefits as part of their wellness program instead of as medical benefits, and members don’t need a diagnosis to have sessions covered, AIS Health reported.

Insurers seeking non-opioid alternatives to treat chronic pain increasingly are opting to cover acupuncture, despite scant medical evidence for its effectiveness. In many cases, plans are classifying acupuncture benefits as part of their wellness program instead of as medical benefits, and members don’t need a diagnosis to have sessions covered, AIS Health reported.

The acute need for alternatives to opioids to treat chronic pain is a major reason for new acupuncture coverage, insurers say, and acupuncture is also a member-pleasing bonus.

Blue Cross Blue Shield of Massachusetts (BCBSMA) will offer a new acupuncture benefit starting Jan. 1 for all members except for those in Medicare Advantage (MA) plans.

According to Ken Duckworth, M.D., medical director for behavioral health at BCBSMA, combating opioid abuse isn’t the only rationale behind adding acupuncture as a benefit, but “this could also be another step in helping to reduce the number of inappropriate opioid prescriptions being written in Massachusetts.”

Independence Blue Cross began covering acupuncture in January, says Ginny Calega, M.D., vice president of medical affairs. Acupuncture is a covered benefit for Independence large-group commercial plans, she says. It can be used as part of a comprehensive treatment plan for patients with chronic pain.

Cigna Corp., meanwhile, will offer limited acupuncture sessions to select MA members beginning in 2020. The insurer’s rationale is different than reasons offered by Independence and the Massachusetts Blues plan: it’s hoping that the benefit could help lure seniors who are on the fence about which MA plan to choose.

CMS also has proposed to cover acupuncture, but only for fee-for-service Medicare beneficiaries enrolled in certain clinical trials.