Radar on Market Access

Radar On Market Access: How Will Subsidy Expansion Impact ACA Marketplaces?

March 23, 2021

For an individual health insurance market that is already hitting its stride, the new pandemic relief legislation’s expansion of Affordable Care Act (ACA) subsidies is yet another positive catalyst that should make the exchanges more attractive to insurers and customers alike, experts tell AIS Health.

Under the American Rescue Plan, which President Joe Biden signed into law on March 11, individuals who already qualified for premium tax credits under the ACA will see more generous financial aid. In addition, people who earn more than 400% of the federal poverty level (FPL) will be eligible for reduced premiums for the first time thanks to a provision that caps marketplace premiums at 8.5% of all enrollees’ income.

For an individual health insurance market that is already hitting its stride, the new pandemic relief legislation’s expansion of Affordable Care Act (ACA) subsidies is yet another positive catalyst that should make the exchanges more attractive to insurers and customers alike, experts tell AIS Health.

Under the American Rescue Plan, which President Joe Biden signed into law on March 11, individuals who already qualified for premium tax credits under the ACA will see more generous financial aid. In addition, people who earn more than 400% of the federal poverty level (FPL) will be eligible for reduced premiums for the first time thanks to a provision that caps marketplace premiums at 8.5% of all enrollees’ income.

Fritz Busch, an actuary at Milliman, Inc., says the newly expanded ACA subsidies will likely bring even more people into the exchanges than the pandemic-related special enrollment period that started Feb. 15. And, “it’s generally agreed that more membership in the individual market means favorable morbidity,” so actuaries will need to figure out just what the impact of that will be, he adds.

Looking ahead to 2022, not only will the revamped subsidies bring more people into the marketplaces, but they will also likely change how people sort themselves among the different coverage tiers — and how insurers respond, Busch says.

“The higher subsidies go, the more likely it is going to be that someone is eligible for a free plan — particularly bronze plans, so there could be some movement towards bronze because of that,” he explains. Health insurers, then, “will want to make sure that they’re in position for [enrollees] to select their bronze plan as a free plan. If their bronze plans are too expensive, they’re not going to be free anymore.”

“We’ll also have an extensive increase of competition in marketplaces in 2022, ’23 and ’24,” says David Anderson, a research associate at the Duke-Margolis Center for Health Policy. He predicts that more insurers will enter the marketplaces and spread their footprints within states where they already operate.

With that increased competition, which will continue a trend already taking place on the exchanges, “the opportunity for monopoly pricing…is going down dramatically,” according to Anderson.

Radar On Market Access: Orphan Drug Act Has Been Overused, A New Study Shows

March 18, 2021

A new study published in Health Affairs found that spending in the orphan drug category is overwhelmingly concentrated on so-called partial orphan drugs, which have both orphan and nonorphan indications. The study affirms growing concerns across the health care industry that drugmakers are misusing the orphan drug designation and introducing unwarranted cost into the drug channel, AIS Health reported.

The Orphan Drug Act of 1983 covers diseases that affect fewer than 200,000 people in the U.S., plus diseases that affect more than 200,000 people but are so expensive to treat that companies developing and marketing such therapies are not expected to recover their costs. With the designation, the FDA grants drugmakers expanded intellectual property and commercial rights intended to offset these steep costs.

A new study published in Health Affairs found that spending in the orphan drug category is overwhelmingly concentrated on so-called partial orphan drugs, which have both orphan and nonorphan indications. The study affirms growing concerns across the health care industry that drugmakers are misusing the orphan drug designation and introducing unwarranted cost into the drug channel, AIS Health reported.

The Orphan Drug Act of 1983 covers diseases that affect fewer than 200,000 people in the U.S., plus diseases that affect more than 200,000 people but are so expensive to treat that companies developing and marketing such therapies are not expected to recover their costs. With the designation, the FDA grants drugmakers expanded intellectual property and commercial rights intended to offset these steep costs.

The new paper found that 70.7% of spending on drugs designated as orphan drugs went “to nonorphan indications,” and noted that in 2017, 25% of U.S. prescription drug spending was for orphan drugs.

Ge Bai, Ph.D., an associate professor at Johns Hopkins University’s Carey Business School and Bloomberg School of Public Health, asserts that the orphan drug designation is being abused by drug companies.

“They [orphan drugs] treat a small number of patients, but at the same time they can be used to treat much more common diseases. So they [drugmakers] can still charge a high price and take the tax credit, while at the same time enjoying their impressive commercial success,” Bai says.

Bai adds that drugmakers have become adept at coordinating outside pressure to convince the FDA to expand orphan drug designations beyond their intended purpose.

“We have so many patient advocacy groups — they are representing rare disease patients. And many of those advocacy groups are heavily sponsored by drug manufacturers,” Bai says. “You cannot just single out the drugs that are being most abused — because even those drugs do have orphan drug features….It’s very hard to disentangle.”

Similarly, Avalere Health’s Lilian Buch and David Kowalsky observed during a Feb. 26 podcast that the orphan drug advocacy work that manufacturers coordinate with patients does serve an important purpose and can improve patient outcomes on an individual basis. Kowalsky is director of the consulting firm’s commercialization and regulatory strategy practice, while Buch is an associate principal in the same practice.

Buch added that, for some rare disease patients with acute symptoms, drug manufacturers sometimes offer the kind of support services more often provided by plans or providers.

Radar On Market Access: Ohio Names New Medicaid PBM, Sues One of Current Vendors

March 16, 2021

Ohio recently cleared a key hurdle in its plan to revamp how Medicaid enrollees’ pharmacy benefits are managed, choosing Gainwell Technologies as the single PBM that will replace big-name firms including Cigna Corp.’s Express Scripts, CVS Heath Corp.’s Caremark, UnitedHealth Group’s OptumRx and Centene Corp.’s Envolve Pharmacy Solutions, AIS Health reported.

Although PBMs and insurers generally oppose state moves to carve out pharmacy benefits from their Medicaid managed care contracts, Ohio says it expects the new single-PBM approach will “drive transparency, reduce pharmacy costs and simplify provider administration.”

Ohio recently cleared a key hurdle in its plan to revamp how Medicaid enrollees’ pharmacy benefits are managed, choosing Gainwell Technologies as the single PBM that will replace big-name firms including Cigna Corp.’s Express Scripts, CVS Heath Corp.’s Caremark, UnitedHealth Group’s OptumRx and Centene Corp.’s Envolve Pharmacy Solutions, AIS Health reported.

Although PBMs and insurers generally oppose state moves to carve out pharmacy benefits from their Medicaid managed care contracts, Ohio says it expects the new single-PBM approach will “drive transparency, reduce pharmacy costs and simplify provider administration.”

“The main idea was to make sure that any PBMs that were serving the Ohio Medicaid managed care plans didn’t have conflicts of interest [and] weren’t steering business toward their sister companies — and also to save money for the state,” says Margaret Scott, an associate principal at Avalere Health who oversaw the Ohio Dept. of Medicaid’s pharmacy program until 2017.

Gainwell fits the bill in that it “doesn’t own any retail or specialty pharmacies; they don’t have any incentives to encourage members to go to one pharmacy or another or to use one drug or another. They’re free of any conflicts in that way,” Scott explains.

Ohio’s transition from multiple MCO-contracted PBMs to a single vendor is the culmination of a series of events in which the state publicly took PBMs to task for their business practices and decided to overhaul its entire Medicaid managed care program. In the most recent salvo, Ohio Attorney General Dave Yost (R) revealed on March 11 that the state is suing Centene Corp. “for an elaborate scheme to maximize company profits at the expense of the Ohio Department of Medicaid (ODM).” Centene, however, said the state’s claims are unfounded, and that Envolve Pharmacy Solutions “will aggressively defend the integrity of the pharmacy services provided to the State of Ohio.”

Ohio is not the only state to rethink how its Medicaid program interacts with PBMs. California and New York will effectively carve out pharmacy benefits from their managed care programs starting in April.

Such moves, Scott adds, are “part of a larger trend where states are taking more control of their pharmacy benefits — whether it’s doing it with a single PDL [prescription drug list] so that they’re maximizing their rebates and getting the lowest net cost on drugs, or it’s carving out pharmacy, or in other ways ensuring transparency in PBM contracts.”

Radar On Market Access: Cigna’s Evernorth to Acquire MDLive in Telehealth Expansion

March 11, 2021

Health insurers have begun to consolidate their position in the telehealth market, as indicated by a recent move by Cigna Corp. to acquire MDLive Inc. Meanwhile, lawmakers are beginning to consider the future of telehealth regulation and payment, AIS Health reported.

Cigna’s Evernorth health services arm announced on Feb. 26 that it had reached an agreement with MDLive to acquire the virtual care provider, according to MDLive’s website. MDLive has been available in-network as a primary care option to all members of Cigna’s commercial plans since January 2020.

Health insurers have begun to consolidate their position in the telehealth market, as indicated by a recent move by Cigna Corp. to acquire MDLive Inc. Meanwhile, lawmakers are beginning to consider the future of telehealth regulation and payment, AIS Health reported.

Cigna’s Evernorth health services arm announced on Feb. 26 that it had reached an agreement with MDLive to acquire the virtual care provider, according to MDLive’s website. MDLive has been available in-network as a primary care option to all members of Cigna’s commercial plans since January 2020.

Ashraf Shehata, national sector leader for health care and life sciences at KPMG, says he expects even more efforts by payers to offer telehealth benefits directly to members.

He adds that the COVID-19 pandemic has acted as an accelerant for telemedicine use. He expects patients will continue to demand telemedicine options even after the pandemic subsides, and that payers will see that demand as an opportunity to narrow the gap between themselves and members.

“We saw that with massive and immediate uptake of the platforms — all the platforms, I should say. Not only did [payers] use their existing platform relationships, but they added new platforms because demand is so high,” Shehata explains.

Shehata adds that robust, internal telemedicine options offer plans an opportunity to exercise leverage in negotiations with provider systems, which have sought to have virtual visits reimbursed at the same rate as traditional visits.

The payment equity question is central to the coming regulatory battle over telemedicine. Payer and plan sponsor lobbying groups will square off against providers in Congress over whether virtual visits should be reimbursed at the same rate as in-person visits. Early in the pandemic, the Trump administration mandated that Medicare must reimburse most telehealth visits at parity with traditional visits.

Also at issue is whether the full menu of services authorized in response to the pandemic will continue to be eligible for Medicare reimbursement. CMS expanded the types of services that could be delivered via telehealth to Medicare beneficiaries, temporarily adding 135 services. Unless Congress acts or the Biden administration issues new rules, the remaining expanded services will expire either at the end of 2021, or when the pandemic public health emergency ends.

In a March 2 hearing of the House Committee on Energy and Commerce’s Subcommittee on Health, legislators indicated that they are studying both issues.

Radar On Market Access: FDA’s Breyanzi Approval May Not Change NHL Management

March 9, 2021

With the FDA’s approval of Bristol Myers Squibb’s Breyanzi (lisocabtagene maraleucel) last month, there are now three chimeric antigen receptor T cell (CAR-T) therapies to treat a certain type of non-Hodgkin’s lymphoma (NHL). A Zitter Insights poll shows that payers do not anticipate its approval as having much of an impact on their management of the space, AIS Health reported.

On Feb. 5, the FDA approved Breyanzi for the treatment of adults with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma not otherwise specified, high-grade B-cell lymphoma, primary mediastinal large B-cell lymphoma and follicular lymphoma grade 3B.

With the FDA’s approval of Bristol Myers Squibb’s Breyanzi (lisocabtagene maraleucel) last month, there are now three chimeric antigen receptor T cell (CAR-T) therapies to treat a certain type of non-Hodgkin’s lymphoma (NHL). A Zitter Insights poll shows that payers do not anticipate its approval as having much of an impact on their management of the space, AIS Health reported.

On Feb. 5, the FDA approved Breyanzi for the treatment of adults with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma not otherwise specified, high-grade B-cell lymphoma, primary mediastinal large B-cell lymphoma and follicular lymphoma grade 3B.

Breyanzi joins Novartis Pharmaceuticals Corp.’s Kymriah (tisagenlecleucel) and Yescarta (axicabtagene ciloleucel) from Gilead Sciences Inc. unit Kite Pharma, Inc. as the three CAR-T therapies in NHL.

For the Managed Care Oncology Index: Q2 2020, between June 1, 2020, and June 30, 2020, Zitter Insights polled 51 commercial payers with 129.6 million covered lives. Those with 96% of lives anticipated that they would manage Breyanzi to label. Asked how impactful its introduction into NHL would be for their management of the indication, payers with 71% of lives said it would have either no impact or minimal impact, while 28% said it would have a moderate impact.

“All three CAR-T therapies have the same approved indication for relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy,” points out Winston Wong, Pharm.D., president of W-Squared Group. “I believe…that unless the managed care organization has a pathway program in place, there will be few organizations that will manage the selection of any of the CAR-T agents for the lymphoma indication….Since efficacy and safety appear to be similar across the three CAR-T agents, it will come down to cost.”

Breyanzi launched with a list price of $410,300 for the one-time treatment compared with $373,000 for Yescarta and Kymriah in NHL.

Wong adds that “it is my expectation that the oncology practice will be the deciding party to choose a preferred CAR-T, based upon experience and cost to the practice.”

Zitter Insights also polled 102 oncologists between June 1, 2020, and June 30, 2020. Approximately half said they did not anticipate administering Breyanzi, slightly more than those with the same response for Yescarta and Kymriah.

Radar On Market Access: 2020 Was ‘Breakout Year’ for Digital Engagement in Health Care

March 4, 2021

Health care organizations, eager for innovative ways to engage members in the midst of the pandemic, ramped up their use of email and texts in 2020 and found they were highly effective at prompting consumer action, a recent survey on health care consumer engagement found.

The survey, conducted annually for the past five years by consulting and research firm Engagys, found when it polled around 100 health care entities in November that 2020 had been a “breakout year” for use of more efficient digital channels and personalized messages, Kathleen Ellmore, the firm’s co-founder and managing director, tells AIS Health.

Health care organizations, eager for innovative ways to engage members in the midst of the pandemic, ramped up their use of email and texts in 2020 and found they were highly effective at prompting consumer action, a recent survey on health care consumer engagement found.

The survey, conducted annually for the past five years by consulting and research firm Engagys, found when it polled around 100 health care entities in November that 2020 had been a “breakout year” for use of more efficient digital channels and personalized messages, Kathleen Ellmore, the firm’s co-founder and managing director, tells AIS Health.

Digital engagement in health care had been growing very slowly, propelled by Medicare Advantage star ratings and consumer demand, until the pandemic pushed health care organizations to adopt it on a much broader scale, according to Ellmore.

“It’s stunning to see such big moves in a single year,” Ellmore says, noting that going forward, the increased focus on member experience may provide health plans with an opportunity to differentiate themselves in novel ways.

The survey found that email and text messaging were considerably more effective at moving members and consumers to action in 2020 than other channels of communication. Text messaging made the largest gains: Its ability to inspire action increased by 154% from 2019 to 2020. Email also posted a substantial 107% increase in effectiveness in 2020, compared with 2019.

Considerations of social determinants of health became more important in 2020, with behavioral health programs leading the list of those SDOH programs considered most consequential, the survey said.

When asked about communication priorities in the near-term, survey respondents said they expect their 2021 messaging to center on health concerns arising from the pandemic. Plans report that it’s most important to them to drive members back into care, including high-risk members, those who have deferred care due to the pandemic and members with gaps in screenings.

Personalization is key, Ellmore says, adding that the most sophisticated health plans and provider systems are working to understand all the “touches” consumers have with their health plans, along with their health needs and their service needs.