Radar on Market Access

Radar On Market Access: PBMs Continue Integration, Face More Regulatory Challenges in 2020

December 29, 2020

In 2020, the PBM industry continued to deepen its integration with other industry players, a trend that experts say is likely to continue in coming years. The PBM space has consolidated to the point that five firms — UnitedHealth Group’s OptumRx, CVS Health Corp.’s Caremark, Cigna Corp.’s Express Scripts, Anthem Inc.’s IngenioRx, Humana Inc.’s Humana Pharmacy Solutions, and the Blue Cross and Blue Shield affiliate-owned Prime Therapeutics LLC — manage the lion’s share of the pharmacy benefits offered to U.S. health plan members.

Beyond their deepening integration with the payers that own them, these firms are working to expand their data and direct-to-consumer operations, AIS Health reported.

In 2020, the PBM industry continued to deepen its integration with other industry players, a trend that experts say is likely to continue in coming years. The PBM space has consolidated to the point that five firms — UnitedHealth Group’s OptumRx, CVS Health Corp.’s Caremark, Cigna Corp.’s Express Scripts, Anthem Inc.’s IngenioRx, Humana Inc.’s Humana Pharmacy Solutions, and the Blue Cross and Blue Shield affiliate-owned Prime Therapeutics LLC — manage the lion’s share of the pharmacy benefits offered to U.S. health plan members.

Beyond their deepening integration with the payers that own them, these firms are working to expand their data and direct-to-consumer operations, AIS Health reported.

Ashraf Shehata, national sector leader for health care and life sciences at KPMG, says that a “back to basics” approach for 2021 will be essential for PBMs, especially as their health plan owners navigate the uncertainty generated by the COVID-19 pandemic. However, he notes that the space is still managing the aftereffects of transactions and is looking for more deal-making opportunities.

In that realm, the long-term integration of Express Scripts into Cigna has generated the most noise. Under Cigna, Express Scripts has deepened a horizontal relationship with Prime Therapeutics.

Meanwhile, in November, Amazon.com Inc. made a big splash by unveiling new pharmacy services, including a prescription-discount service for uninsured individuals that taps into Express Scripts’ price-negotiation powers with manufacturers.

Midwestern supermarket chain Hy-Vee, Inc. also launched a PBM in December, while in March, Costco Wholesale Corp. purchased a minority stake in Navitus Health Solutions, a subsidiary of integrated health system SSM Health.

Shehata says that PBMs’ data expertise will be a key line of business going forward, especially as regulators and the new Democratic administration increase scrutiny on the industry.

He suggests that PBMs could expand beyond the traditional role into something more like a data and analytics clearinghouse for the entire health care industry and PBMs need to be aggressive in delivering value directly to consumers as regulatory scrutiny on the industry increases.

“Big data and [artificial intelligence is] going to sit in kind of the combination of the traditional PBM, …the more traditional health claim, and… detailed EHR data,” Shehata explains. “You’ll start to see a whole generation of organizations also bring in EHR data, because it’s much more accessible now.”

Radar On Market Access: MCO Messaging Plays Key Role in COVID Vaccine Rollout

December 24, 2020

States and the federal government recently began rolling out the COVID-19 vaccine to health care workers across the country. Health plans, particularly those that serve high-risk individuals, may be ideally situated to coordinate care and update members on vaccination opportunities, experts tell AIS Health.

The FDA on Dec. 11 authorized emergency use of the COVID-19 vaccine made by Pfizer Inc. and BioNTech in individuals age 16 and older. Then the agency on Dec. 18 authorized Moderna’s vaccine for emergency use in people 18 years or older.

States and the federal government recently began rolling out the COVID-19 vaccine to health care workers across the country. Health plans, particularly those that serve high-risk individuals, may be ideally situated to coordinate care and update members on vaccination opportunities, experts tell AIS Health.

The FDA on Dec. 11 authorized emergency use of the COVID-19 vaccine made by Pfizer Inc. and BioNTech in individuals age 16 and older. Then the agency on Dec. 18 authorized Moderna’s vaccine for emergency use in people 18 years or older.

Health care workers and nursing home residents have been designated by the Centers for Disease Control and Prevention as the first group (phase 1a) to receive the vaccine.

“I think the paradigm of changing tires on a moving bus applies to this venture,” remarks Margaret Murray, CEO of the Association for Community Affiliated Plans (ACAP). “We certainly support the idea of getting the vaccine to front-line health care workers and the very most vulnerable populations, such as nursing home residents, first. So CDC is off to a good start.”

But ACAP, which is composed of 77 not-for-profit safety net health plans covering Medicaid, marketplace and MA enrollees, is concerned about other vulnerable seniors — such as those who are very frail or homebound and likely dual eligible — who are not part of that first round. “We need to think about them in the next wave,” Murray tells AIS Health via email. “We also need to consider how most equitably to distribute the vaccine.”

“Hopefully, this will start to evolve quickly, but there’s yet a lot to be figured out,” concurs Cheryl Phillips, M.D., president and CEO of the SNP Alliance, pointing out that there is no mechanism for tracking who has and who hasn’t received the vaccine. The plans that are most likely to serve some of the high-risk older adults that will soon qualify for the vaccine are MA Special Needs Plans, she says, “and they can be a wonderful partner for data sharing and working with providers,” as well as communicating with members to help them get the vaccine.

Murray adds messaging from plans will be crucial, especially if members are skeptical of the vaccine or behind on their vaccines in general.

Radar On Market Access: Biden Probably Won’t Roll Back New Prior Authorization Proposal

December 22, 2020

Building on previously finalized regulations aimed at advancing data interoperability in health care, CMS on Dec. 10 proposed a new rule that would require certain health plans to make their prior authorization processes more efficient and share even more data with providers and patients, AIS Health reported.

If finalized, the rule would apply only to managed care Medicaid and CHIP plans, fee-for-service Medicaid and CHIP plans, and Qualified Health Plans (QHPs) on the federally facilitated exchanges.

Building on previously finalized regulations aimed at advancing data interoperability in health care, CMS on Dec. 10 proposed a new rule that would require certain health plans to make their prior authorization processes more efficient and share even more data with providers and patients, AIS Health reported.

If finalized, the rule would apply only to managed care Medicaid and CHIP plans, fee-for-service Medicaid and CHIP plans, and Qualified Health Plans (QHPs) on the federally facilitated exchanges.

“The proposed rule is a welcome step toward helping clinicians spend their limited time on patient care,” the American Hospital Association said in a statement, adding that “we are deeply disappointed, however, that CMS chose not to include Medicare Advantage plans.”

The new proposal builds on an interoperability rule that CMS finalized in May. That rule requires Medicaid, CHIP, QHP and MA plans to share claims and other health information with patients through a Patient Access API, which will allow them to obtain their data through any third-party application they choose.

Under the new rule, starting Jan. 1, 2023, affected payers would have to include information in their already established Patient Access APIs about patients’ pending and active prior authorization decisions.

The rule would also make several changes to streamline the prior authorization process itself. As a press release from CMS explained, Medicaid, CHIP and QHP payers would be required to build and implement APIs that “allow providers to know in advance what documentation would be needed for each different health insurance payer, streamline the documentation process, and enable providers to send prior authorization requests and receive responses electronically.”

Although the incoming Biden administration could opt to reverse some of the more controversial regulations issued by the Trump administration in recent weeks, Andrew Van Ostrand, a principal in Avalere Health’s policy practice, says he doesn’t expect this latest rule will be among them.

The official comment period for the rule closes on Jan. 4, so CMS is likely to be able to finalize it before President-elect Joe Biden’s inauguration on Jan. 20, he says. “I also think that this larger issue of data interoperability…that’s been a bright spot from a bipartisan perspective.”

Therefore, “I do expect a Biden administration to carry these initiatives forward and build on them,” Van Ostrand says. However, he says there could be “tweaks to deadlines and tweaks to specific requirements.”

Radar On Market Access: New-to-Market Oral Drugs May Not Always Have a Leg Up on Injectables

December 17, 2020

In its latest quarterly Drug Pipeline Insights Report, OptumRx includes a diverse array of medications that the UnitedHealth Group-owned PBM believes are likely to make a market impact when they’re approved by the FDA, AIS Health reported. One interesting trend that applies to three of the five highlighted drugs is the fact that each is the first oral option in its respective category.

While oral medications tend to be thought of as more convenient than injectable or IV-administered therapies, that factor alone may not confer as much of a competitive advantage as one might think, according to one OptumRx executive.

In its latest quarterly Drug Pipeline Insights Report, OptumRx includes a diverse array of medications that the UnitedHealth Group-owned PBM believes are likely to make a market impact when they’re approved by the FDA, AIS Health reported. One interesting trend that applies to three of the five highlighted drugs is the fact that each is the first oral option in its respective category.

While oral medications tend to be thought of as more convenient than injectable or IV-administered therapies, that factor alone may not confer as much of a competitive advantage as one might think, according to one OptumRx executive.

Take roxadustat, which if approved would be the first novel therapy for chronic kidney disease-related anemia since 1989 and would offer an oral alternative to the injectable erythropoiesis-stimulating agents (ESAs) currently being used to treat the condition.

“Dialysis-dependent patients usually get their ESAs administered with dialysis via IV infusion, so the oral alternative in these patients doesn’t provide a convenience benefit necessarily,” says Bill Dreitlein, senior director of pipeline and drug surveillance at OptumRx. “However, there may be alternative benefits around safety.”

Then there’s Orladeyo (berotralstat), BioCryst Pharmaceuticals, Inc.’s treatment for hereditary angioedema (HAE) attacks. When the FDA approved Orladeyo on Dec. 3, it became the first oral plasma kallikrein inhibitor for the prevention of HAE attacks, Dreitlein says.

“The convenience benefit for berotralstat would have been more significant,” he says, but the 2018 approval of approval of Takhzyro, which is subcutaneously administered every two to four weeks and can be self-administered, “diminishes that because it already reduced the number of injections vs. older C1 concentrate products.”

The FDA is expected to decide on Dec. 20 whether to approve relugolix, which would be the first oral GnRH receptor antagonist on the market for advanced prostate cancer.

Relugolix’s oral administration gives it an advantage over Firmagon (degarelix), which requires monthly subcutaneous injections by a health care provider “and hasn’t garnered much commercial success because of the frequent injections and injection site reactions,” Dreitlein says.

The more common GnRH receptor agonists, on the other hand, require intramuscular injections at intervals ranging from one to six months. “Compared to these drugs, relugolix might confer some clinical advantages, but the convenience benefit is reduced because you are replacing an injection given potentially every six months with an oral daily medication,” Dreitlein adds.

Radar On Market Access: First Round of Vaccines Are Expected to Be Free to the Public

December 15, 2020

With FDA issuing emergency use authorization to the coronavirus vaccine from Pfizer Inc. and BioNTech last week and Moderna Inc.’s offering not far behind, in the coming months there will undoubtedly be a variety of vaccines being administered to Americans, AIS Health reported. But who will be paying for them?

“In the case of the COVID-19 vaccine, there is a very simple take-home message, which is that no one going to get the vaccine will be charged for the vaccine or its administration, no matter what type of insurance they have, or whether they have insurance at all,” Karyn Schwartz, a senior fellow at the Kaiser Family Foundation (KFF), said during a Dec. 3 web briefing.

With FDA issuing emergency use authorization to the coronavirus vaccine from Pfizer Inc. and BioNTech last week and Moderna Inc.’s offering not far behind, in the coming months there will undoubtedly be a variety of vaccines being administered to Americans, AIS Health reported. But who will be paying for them?

“In the case of the COVID-19 vaccine, there is a very simple take-home message, which is that no one going to get the vaccine will be charged for the vaccine or its administration, no matter what type of insurance they have, or whether they have insurance at all,” Karyn Schwartz, a senior fellow at the Kaiser Family Foundation (KFF), said during a Dec. 3 web briefing.

The U.S. government has already paid for initial doses of coronavirus vaccines, and those doses will be provided for free to providers who will not be allowed to charge consumers for them — though they can bill insurers or the government for administering the vaccine, Schwartz said.

In addition, “some of the usual rules that govern vaccine coverage for people with insurance have been strengthened for the COVID-19 vaccine,” she added.

The Affordable Care Act requires most group and individual market health plans to cover any vaccines recommended by the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP) without cost sharing, according to a recent KFF issue brief. The federal Coronavirus Aid, Relief, and Economic Security Act builds on that by requiring non-excepted group and individual plans to cover a coronavirus vaccine without cost sharing 15 days after it is recommended by ACIP. CMS also released an Interim Final Rule with Comment Period on Oct. 28 clarifying that even vaccines administered out-of-network must be available without cost-sharing.

ACIP voted to officially recommend the Pfizer/BioNTech vaccine on Dec. 12. The panel is expected to do the same for Moderna if its vaccine is granted an EUA, which means payers won’t be allowed to decide not to cover one over another, Jennifer Kates, KFF’s senior vice president and director of global health and HIV policy, tells AIS Health.

People with Medicare, Medicaid and the uninsured, meanwhile, will also be able to access the government-purchased vaccines free of charge, according to Schwartz.

Radar On Market Access: Employers Show Interest in Moving to ICHRAs

December 10, 2020

Health care industry insiders say that employers of all sizes are beginning to take a serious look at moving some of their health benefits to Individual Coverage Health Reimbursement Arrangements (ICHRAs) starting in 2022, AIS Health reported.

In July 2019, the Trump administration finalized new regulations for ICHRAs, giving employers greater flexibility to reimburse qualifying employees buying health insurance policies on the individual market.

Health care industry insiders say that employers of all sizes are beginning to take a serious look at moving some of their health benefits to Individual Coverage Health Reimbursement Arrangements (ICHRAs) starting in 2022, AIS Health reported.

In July 2019, the Trump administration finalized new regulations for ICHRAs, giving employers greater flexibility to reimburse qualifying employees buying health insurance policies on the individual market.

While the new ICHRA regulations took effect starting in the 2020 plan year, adoption has been slow so far. That could be changing: a Nov. 16 survey by Willis Towers Watson of large, national employers found that 15% of respondents are “planning to offer or considering offering ICHRAs to at least some portion of… employees in 2022 or later.”

Jason Karcher, an actuary at Milliman Inc., explains that, while ICHRAs do offer employers a real advantage by reducing the administrative burden of managing health benefits, it’s not clear they save employers money.

“The individual market is frequently more expensive on a benefit-for-benefit basis than what you find on the employer market,” Karcher explains. “So if you’re looking to offer something with value, it’s not like it’s an excellent savings.”

Ashraf Shehata, the national sector leader for health care and life sciences at KPMG, says that the administrative question alone is driving interest in ICHRA. While Shehata agrees that commercial employer plans tend to get better deals on reimbursement, “the feeling is that the offsets to that would be a reduction in administrative costs.”

“I think people are looking for more ways to give consumers choice in their health benefits,” Shehata adds. “The only way to do that today, in a more structured benefits model, will actually drive up your administrative costs as an employer. So if you can forgo some of the tax advantages, but you pick up a reduction of your administrative burden and you empower the employees to select their own plans, that could be a very interesting model.”

Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, suggests that the incoming Biden administration’s stated intention to peg the benchmark for premium tax credits to the second-lowest cost gold plan instead of the current silver benchmark would make ICHRAs much more appealing to employers, as it would allow enrollees to more easily afford lower-deductible plans.