Radar on Market Access

Radar On Market Access: New Postpartum Depression Drug Presents Payer Challenges

April 2, 2019

The FDA’s recent approval of the first medication specifically aimed at treating postpartum depression is drawing a favorable response from clinicians, while payers could face challenges.

The FDA’s recent approval of the first medication specifically aimed at treating postpartum depression is drawing a favorable response from clinicians, while payers could face challenges.

PBM executives tell AIS Health that the postpartum depression drug, Zulresso (brexanolone) injection, is likely to be covered under the medical, not the pharmacy, side of the benefit.

Zulresso’s initial U.S. list price “will be $7,450 per vial, resulting in a projected average course of therapy cost of $34,000 per patient before discounts,” says Alexis Smith, a spokesperson for Zulresso’s manufacturer, Sage Therapeutics, Inc.

As the medication must be administered as a 60-hour continuous intravenous infusion, it’s a challenge for a new mother to be hospitalized in an approved facility for two-and-a-half days for an IV infusion, says Dea Belazi, Pharm.D., president and CEO of AscellaHealth. Moreover, he says, there is “the fact that there are possible extensive side effects and the data on its [Zulresso’s] effectiveness [are] moderately better than placebo. The cost will also play a barrier,” he adds.

Camille Hoffman, M.D., associate professor in the University of Colorado’s Department of Ob/Gyn, describes the newly approved drug as “a breakthrough medication” that “rapidly improves postpartum depression out to, at least, 30 days following the one-time treatment.”

She acknowledges that the need to administer Zulresso via a 60-hour IV drip and its restricted distribution might present challenges. However, she says, “I hope that payers will consider these potential barriers in light of how quickly it acts to help women with severe postpartum depression.”

Radar On Market Access: Colorado Soon Will Tighten Rules for Short-Term Plans

March 28, 2019

Starting April 1, payers who decide to sell short-term limited duration (STLD) health benefit plans in Colorado must offer products covering essential health benefits mandated by state law — such as preventive services, prescription drugs, hospitalization and maternity and newborn care. Short-term plans also won’t be able to deny applicants based on their health status: They must be guaranteed issue, AIS Health reported.

Starting April 1, payers who decide to sell short-term limited duration (STLD) health benefit plans in Colorado must offer products covering essential health benefits mandated by state law — such as preventive services, prescription drugs, hospitalization and maternity and newborn care. Short-term plans also won’t be able to deny applicants based on their health status: They must be guaranteed issue, AIS Health reported.

But one basic element will remain unchanged: STLD plans being sold in Colorado, as elsewhere, won’t cover pre-existing conditions.

Spokesperson Vincent Plymell of the Colorado Division of Insurance tells AIS Health that the state’s action is “about enhancing consumer protections for people who truly need a short-term plan.”

Attorney Katie Keith, a research professor at Georgetown University’s Center on Health Insurance Reforms, notes the fast turnaround time for the Trump administration’s 2018 rule relaxing restrictions on STLD plans gave scant time for states to enact laws and make regulatory changes to protect markets.

The idea behind Colorado’s regulatory action on short-term plans “is it cuts the incentive for companies to come in and cannibalize the market,” Keith says. “I think it disincentivizes companies to come in and sell a cheap product [and] keeps out some of the ‘bad actors.’ Making it a little more burdensome is probably a good thing.”

Yet, Keith adds, “Covering the benefits is one thing, but if they [i.e., short-term plan sponsors] can still exclude pre-existing conditions, that could still be a problem” for consumers who might be tempted by STLD plans’ low premium rates without understanding the product’s limitations.

Radar On Market Access: Magellan’s PBM Could Be Attractive Acquisition Target

March 26, 2019

After weathering a rocky 2018 and facing public pressure from a hedge fund, Magellan Health Inc. appears more and more likely to end up on the selling block. Some say that if the company does opt for a sale, its PBM could be one of the most attractive assets to potential buyers, AIS Health reported.

After weathering a rocky 2018 and facing public pressure from a hedge fund, Magellan Health Inc. appears more and more likely to end up on the selling block. Some say that if the company does opt for a sale, its PBM could be one of the most attractive assets to potential buyers, AIS Health reported.

On Feb. 22, the hedge fund Starboard Value — which owns approximately 9.8% of Magellan shares — sent an open letter to the company’s shareholders suggesting new candidates for its board of directors and urging Magellan management to explore selling all or part of the company.

Leerink analyst Ana Gupte suggested that Anthem and UnitedHealth are the most likely strategic buyers, “in light of their synergies with Medicaid in [Magellan’s] Complete Care [segment], and the PBM across IngenioRx and Optum Rx.”

To Jefferies analyst David Styblo, Magellan’s PBM Magellan Rx “doesn’t seem as integrated” as its other business segments and thus could be sold as standalone asset. That “could be interesting for companies wanting to enhance their medical pharmacy and clinical management capabilities,” Styblo wrote in a research note.

In general, “there’s always an opportunity for good-quality PBM assets” to be purchased in the managed care space, says Ashraf Shehata, a principal in KPMG’s health care life sciences advisory practice and Global Healthcare Center of Excellence.

He also argues that in the PBM industry, there is an opportunity for an organization that wants to act as an “aggregator” of smaller PBMs by buying up several of them, putting them on a common platform and making improvements to their rebating and pricing tools. “If somebody were willing to do that, there could be kind of a bigger back-end valuation,” Shehata says.

The PBM, though, has had its issues. The company said in its fourth-quarter and full-year 2018 earnings report that Magellan Rx’s profits decreased from $139.9 million in 2017 to $104.4 million in 2018.

Radar On Market Access: As Insulin Prices Balloon, Insurers Try to Offer Some Relief

March 21, 2019

Amid increasing public scrutiny of rising insulin prices, some health insurers are taking matters into their own hands to help their diabetic members afford the lifesaving medications, AIS Health reported.

Amid increasing public scrutiny of rising insulin prices, some health insurers are taking matters into their own hands to help their diabetic members afford the lifesaving medications, AIS Health reported.

At the integrated health system HealthPartners, the members who are hardest hit by rising insulin prices are those in high-deductible health plans, says Young Fried, vice president of pharmacy plan services. But she says insulin affordability is also an issue for Medicare members who are in the Part D “doughnut hole.”

One tactic that the organization’s health plan deploys to ease the burden on members is a policy called “plan pay the difference,” Fried says. If a brand drug becomes cheaper than the generic version after rebates, “we would actually have the member pay the generic copay instead of the brand, and then we would reimburse the pharmacy the brand cost, so that they’re made whole as well,” she says.

At Geisinger Health Plan, Medicare enrollees are the ones who have the most trouble paying for their insulin, according to Jamie Miller, the health plan’s system director of managed care pharmacy. Overall, Geisinger saw its spending in the diabetes drug class rise 13.8% between 2017 and 2018, she adds.

As Geisinger works out what it wants its Medicare benefit to look like in 2020, Miller says one goal is to make insulin more affordable for its senior members. Thus, the health plan is considering adding a sixth, “zero-dollar” tier to its Part D formulary where it would put insulin and select other drugs.

Radar On Market Access: Civica Rx Aims to Provide 14 Drugs in Short Supply in ’19

March 19, 2019

Since its launch in 2018, Civica Rx, the new not-for-profit generic drug and pharmaceutical company run by health systems and hospitals, tells AIS Health it has made solid progress in its ongoing effort to address persistent shortages of certain drugs administered within hospitals’ four walls.

Since its launch in 2018, Civica Rx, the new not-for-profit generic drug and pharmaceutical company run by health systems and hospitals, tells AIS Health it has made solid progress in its ongoing effort to address persistent shortages of certain drugs administered within hospitals’ four walls.

According to Civica spokesperson Debbi Ford, Civica first aims to provide 14 vital drugs, “mostly sterile injectables such as anesthesia medications, antibiotics, and pain medications and expects to deliver these products this year,” she says.

Ford explained that for many generic injectable drugs undergoing a shortage, there often are one or two viable generic drug manufacturers that capture most of the market. However, she said, there are multiple other generic drug manufacturers that have an FDA-approved Abbreviated New Drug Application (ANDA) and have “capable manufacturing facilities and capacity to produce the drug undergoing shortages, yet are dormant due to business and/or other reasons.”

Ford said that any disruption in the supply chain for a drug that has only one or two manufacturers “almost immediately leads to a drug shortage, which is difficult to recover from because no other manufacturer can readily produce the required inventory.”

Civica is taking a three-pronged approach to its manufacturing strategy:

Work with several manufacturers, “including the dormant manufacturers who have the U.S. FDA approval, capable manufacturing facilities and capacity to produce Civica-labeled generic drugs, allowing manufacturers to re-enter the market,” Ford said.
The development and/or purchase of ANDAs for generic drugs and work with contract manufacturing organizations to produce Civica products.
The purchase and/or building of Civica manufacturing facilities using Civica’s ANDAs.
Will the cost of drugs go down because of Civica’s efforts? Probably not, says Bill Oldham, chairman and chief financial officer of AscellaHealth. Will drug costs go up? Maybe. In any event, “there will be a new game in town,” he says. “Whether it will have an enormous impact or not is anyone’s guess.”

Radar On Market Access: Oncologists Are Concerned With Patients’ Refusal of Treatment

March 14, 2019

With more targeted and effective therapies launching to treat a variety of cancers, much of the focus has been not only on their efficacy but their costs, particularly to payers. A recent report from the physician perspective highlights their impact as far as cost on not only those stakeholders but also the patients they serve, AIS Health reported.

With more targeted and effective therapies launching to treat a variety of cancers, much of the focus has been not only on their efficacy but their costs, particularly to payers. A recent report from the physician perspective highlights their impact as far as cost on not only those stakeholders but also the patients they serve, AIS Health reported.

The Association of Community Cancer Centers released its 2018 Trending Now in Cancer Care Survey in February. Responding to the survey were 205 individuals from community cancer centers, academic centers, teaching hospitals and independent practices.

Leading the top threats to future growth were payer reimbursement requirements and “cost of drugs and/or new treatment modalities,” both at 48% among those categories ranked among the top five threats. Those were followed by “uncertainties in drug pricing reform policies,” at 40%.

When it came to patients, 49% of respondents said they had had a patient refuse treatment due to financial concerns over the past year, with 32% responding that they were not sure if that had occurred. In addition, 79% of respondents said they were “very” or “somewhat” concerned about patients refusing care due to financial worries.

As far as patients refusing treatment, “these numbers are not surprising,” contends Janet Serluco, vice president and head of oncology at Precision for Value, who tells AIS Health that she “would expect this to be where it is right now, and in fact perhaps higher.” But “the key figure for context is the level of staff concern this raises,” she says about the second issue.

It’s no secret that overall costs for health care have been rising and that much of those costs have been shifted onto patients through higher premiums and greater out-of-pocket expenses.

In addition, benefit designs among commercial insurers have shifted from copayments to include more coinsurance. And “Medicare patients without supplemental plans face a large 20% coinsurance…at the beginning of each year, as new deductibles must be met. According to a recent Kaiser Health System Tracker Report, cost shares have outpaced wage growth, increasing pressures on patients,” Serluco states.

Various stakeholders have “competing priorities and perspectives” that they may bring to discussions about patients’ out-of-pocket costs.

One model that “appears to be a promising approach to lowering overall costs of health care delivery to cancer patients, through better care coordination and patient-centered care,” is CMS’s Oncology Care Model, a Center for Medicare & Medicaid Innovation-developed pilot launched July 1, 2016, says Serluco.