Radar on Market Access

Radar On Market Access: New Sickle Cell Medications Offer Both Opportunities and Challenges

January 2, 2020

The first targeted therapy to treat pain crises in people with sickle cell disease presents a “welcome” new option that payers likely will embrace, a PBM head tells AIS Health. While the drug’s manufacturer cites “positive” early discussions with payers on it, some experts note the lifetime treatment — via a monthly intravenous infusion — is costly: around $100,000 annually.

The first targeted therapy to treat pain crises in people with sickle cell disease presents a “welcome” new option that payers likely will embrace, a PBM head tells AIS Health. While the drug’s manufacturer cites “positive” early discussions with payers on it, some experts note the lifetime treatment — via a monthly intravenous infusion — is costly: around $100,000 annually.

On Nov. 15, the FDA approved Novartis’ Adakveo (crizanlizumab-tmca), a treatment to fight the underlying cause and reduce the frequency of vaso-occlusive crisis, described as a common and painful complication of sickle cell disease. It is approved for patients ages 16 and older with the genetic blood disorder.

Hydroxyurea, a drug approved by the FDA in 1998, is now generic, costs about $1,000 a year, and is approved for children, the New York Times reported on Dec. 7. The two newcomers are Adakveo and Global Blood Therapeutics’ Oxbryta (voxelotor), a daily pill granted accelerated approval by the FDA 10 days after Adakveo’s approval. This led one expert to tell the news outlet that insurers likely will want to begin with hydroxyurea as the front-line therapy.

Yet Mesfin Tegenu, R.Ph., president of PerformRx, LLC, says that “options for patients with sickle cell disease have been very limited up to this point, so the approval of Adakveo is a welcome addition in the treatment of this debilitating disease.”

Eric Althoff, a Novartis spokesperson, says the company anticipates that health plans will see a value proposition with Adakveo. “Early discussions with payers are positive,” Althoff says. “In fact, a number of payers have already added Adakveo to medical policy including state Medicaid [programs].” Florida and Alabama’s Medicaid programs have agreed to cover Adakveo, Reuters reported on Dec. 20.

Radar On Market Access: Health Insurers Receive Multiple Gifts In Year-End Spending Package

December 26, 2019

For health insurers, there’s a lot to like in a spending package passed by Congress to avoid a government shutdown.

One of the two measures that make up the $1.4 trillion spending package will completely repeal the long-reviled health insurer fee (HIF) starting in 2021, which will especially help insurers in the Medicare Advantage business. The legislation also includes two provisions to that could stabilize the Affordable Care Act exchanges by thwarting any attempts to ban silver loading or auto-reenrollment, AIS Health reported.

For health insurers, there’s a lot to like in a spending package passed by Congress to avoid a government shutdown.

One of the two measures that make up the $1.4 trillion spending package will completely repeal the long-reviled health insurer fee (HIF) starting in 2021, which will especially help insurers in the Medicare Advantage business. The legislation also includes two provisions to that could stabilize the Affordable Care Act exchanges by thwarting any attempts to ban silver loading or auto-reenrollment, AIS Health reported.

And portions of the Lower Health Care Costs Act of 2019 — including new transparency requirements for contracts between providers and health plans, and a solution to surprise medical billing that involved arbitration — neither passed on their own nor made it into the spending package.

President Donald Trump signed the spending package into law on Dec. 20 after both the House and Senate passed the legislation.

The HIF repeal, effective starting in 2021, is the most significant portion of the spending package for the managed care industry.

“This legislation is an early Christmas gift for healthcare stocks across the board,” Evercore ISI analyst Michael Newshel advised investors in a Dec. 16 research note. “We had been anticipating HIF relief for 2021 and maybe 2022 too, but permanent repeal is of course better and removes any future uncertainty about the fee’s possible return [after 2020],” he wrote.

Citi Research analyst Ralph Giacobbe added that the HIF’s repeal is “a major win for the MCOs, particularly those with significant Medicare Advantage exposure like [Humana] given the dynamics of that end market and the inability to pass through the tax.”

In the commercial insurance market, carriers have largely passed the cost of the HIF onto their members, “so eliminating it would have the impact of reducing premiums for consumers, which would be politically expedient,” Credit Suisse analyst A.J. Rice wrote in a Dec. 16 note.

Radar On Market Access: Uptake of New MA Supplemental Benefits Remains Modest in 2020, Report Says

December 24, 2019

Despite Medicare Advantage insurers’ enthusiasm for increased flexibility in allowable supplemental benefits and a slew of recent plan press releases touting goodies such as pest control and “Papa Pals” for the 2020 plan year, uptake of more “resource intensive” benefits geared toward seriously ill seniors remains relatively modest, according to a new report from the Duke Margolis Center for Health Policy.

Despite Medicare Advantage insurers’ enthusiasm for increased flexibility in allowable supplemental benefits and a slew of recent plan press releases touting goodies such as pest control and “Papa Pals” for the 2020 plan year, uptake of more “resource intensive” benefits geared toward seriously ill seniors remains relatively modest, according to a new report from the Duke Margolis Center for Health Policy.

The December report, “Improving Serious Illness Care in Medicare Advantage: New Regulatory Flexibility for Supplemental Benefits,” showed that a total of 507 standard MA plans in 2019 offered one of five types of benefits addressing serious illness, accounting for roughly 11% of the approximately 4,500 standard MA plans in 2019, AIS Health reported. By contrast, 377 in 2020 offered at least one of the five benefits highlighted in the report, while no plans in 2019 offered more than one of these benefits. But that drop was mainly driven by one major carrier abandoning its caregiver support benefit for 2020. Meanwhile, about 175 plans offered at least two of these types of these benefits, according to Robert Saunders, research director and one of the report’s authors.

Despite the decrease in caregiver support, which had the greatest initial uptake of the five benefit categories in 2019, researchers saw meaningful increases for 2020 in benefits such as adult day care and palliative care that “more directly address the needs of members with serious illness.”

The study also linked the PBP data to MA enrollment figures by plan and by county to assess the geographic impacts of the policy changes. For 2020, many parts of the country do not have any plans offering new supplemental benefits, and those aimed at serious care were likely to be offered in urban counties, said the report.

Barring any major disruption, 2021 will likely be the year of growth for new flexible benefits, as it takes plans a couple years to price, test and stand up ones that will have a lasting impact, adds Saunders.

Radar On Market Access: Patient-Reported Outcomes Play Key Role in New Multiple Sclerosis Value-Based Contract

December 19, 2019

Under a value-based contracting agreement believed to be the first of its kind, UPMC Health Plan will receive discounts for two Biogen Inc. multiple sclerosis (MS) drugs — Tecfidera (dimethyl fumarate) and Avonex (interferon beta-1a) — based on patient-reported measures of disability progression. The agreement is also based on research with a panel of key MS stakeholders who identified the most meaningful outcomes in relapsing forms of MS, AIS Health reported.

Under a value-based contracting agreement believed to be the first of its kind, UPMC Health Plan will receive discounts for two Biogen Inc. multiple sclerosis (MS) drugs — Tecfidera (dimethyl fumarate) and Avonex (interferon beta-1a) — based on patient-reported measures of disability progression. The agreement is also based on research with a panel of key MS stakeholders who identified the most meaningful outcomes in relapsing forms of MS, AIS Health reported.

UPMC’s Center for Value-Based Pharmacy Initiatives led the research and developed the value-based contract.

Previous value-based contracts for MS drugs have connected payment to outcome indicators derived from claims and electronic health record data, says Rochelle Henderson, Ph.D., Express Scripts’ vice president of research and a co-author of the study report.

“This research [gives] a greater level of transparency into the outcome indicators that rank the highest in terms of value for stakeholders,” she says. “The key advantage of patient-reported outcomes is that it gets at information that can be used to evaluate the success of a medication where that information is not available by traditional means.”

Similarly, Henderson says, many outcomes that are important to payers are not available in the electronic medical record. “What we learned is that stakeholders rated ‘worsening physical disability’ and ‘functional impairment’ as the most valuable indicators for providing information about the status of MS.”

Payer interest and participation in outcomes-based contracting with manufacturers continues to grow. “Based on our research and our discussions with stakeholders in health care, there are a number of organizations on the payer side who would like to go in this direction,” says Avalere Health’s John E. Linnehan, practice director of health economics and advanced analytics.

“Payers typically are looking for outcomes-based contracting in conditions with high prevalence, high costs, or both,” Linnehan says, adding that because the MS category includes new entrants and generics, it is a focus of interest for outcomes-based contracts.

Radar On Market Access: UnitedHealth Makes Deal to Buy Diplomat as Industry Consolidation Enters ‘Second Phase’

December 17, 2019

Diplomat Pharmacy, Inc., which has been in a tailspin amid mounting financial losses, agreed to a deal with UnitedHealth Group on Dec. 9 that will see the larger firm’s OptumRx division purchase the midsized specialty pharmacy provider/PBM, AIS Health reported.

Diplomat Pharmacy, Inc., which has been in a tailspin amid mounting financial losses, agreed to a deal with UnitedHealth Group on Dec. 9 that will see the larger firm’s OptumRx division purchase the midsized specialty pharmacy provider/PBM, AIS Health reported.

Diplomat’s difficulties began to come into focus earlier this year, when the firm disclosed customer losses in its PBM business and “increased competitive pressure in the specialty market.” In August, Diplomat said it was “reviewing strategic alternatives” to maximize shareholder value. Then on Dec. 9, UnitedHealth disclosed that it agreed to pay $4 per share for Diplomat’s outstanding stock and assume its debt. Equities analysts noted that Diplomat’s stock was trading at $5.81 as of market close on the Friday before the transaction was unveiled.

Adam Fein, Ph.D., CEO of Pembroke Consulting, Inc.’s Drug Channels Institute, says that “the specialty pharmacy market is reaching maturity, as PBMs and insurers dominate specialty drug dispensing channels.” Diplomat, he says, “was unable to navigate the industry’s evolution.”

“Diplomat’s sale at a bargain basement price signals that the shakeout is underway,” Fein adds. “Fewer new specialty pharmacies are starting up, the bigger companies are getting acquired, and market share is concentrating further with the biggest players.”

Ashraf Shehata, KPMG’s national sector leader for health care and life sciences, says that the purchase of Diplomat comes as the rivalry is intensifying between UnitedHealth and its two big consolidated rivals, CVS Health Corp. and Cigna Corp.

Now that those companies have completed major transactions to assemble their assets — with CVS buying health insurer Aetna and Cigna acquiring the PBM Express Scripts — “we’re kind of seeing what I call the second phase right now of the competition really heating up between the big players,” he says.

Growth continues to be the “name of the game” for those three companies, Shehata says, but it’s difficult to come by in an industry that’s already so consolidated. Because of that, “now you might see some growth on the edges” in the same vein as the UnitedHealth/Diplomat deal, he adds.

Radar On Market Access: CMS Struggles With New Medicare Plan Finder ‘Glitches’

December 12, 2019

Despite a major overhaul to the Medicare Plan Finder (MPF) that was readied in time for the Annual Election Period that concluded on Dec. 7, multiple reports at press time indicated that the online tool was providing inaccurate cost estimates for users, especially relating to prescription drugs, AIS Health reported.

Despite a major overhaul to the Medicare Plan Finder (MPF) that was readied in time for the Annual Election Period that concluded on Dec. 7, multiple reports at press time indicated that the online tool was providing inaccurate cost estimates for users, especially relating to prescription drugs, AIS Health reported.

CMS dropped the new MPF, which reportedly cost $11 million, on Aug. 27 — just seven weeks before the Oct. 15 start of the AEP.

“At the outset, CMS did not provide enough time to test the functionality of the tool, which has led to ‘testing in real time’ with real ramifications to Medicare beneficiaries and their ability to access care,” says Amber Christ, directing attorney with Justice in Aging.

A recent Health Affairs article observed that the new MPF “explicitly emphasizes the monthly plan premium over arguably more relevant information — estimated total drug costs — which also account for expected out-of-pocket costs.” Total drug costs are “displayed in a small font amidst other information,” and the tool lists available plans starting with the lowest premiums, added the article.

“Distressed” by “the media coverage talking about ‘glitches’ or ‘malfunctions'” in the MPF, a CMS blog post dated Nov. 27 said the new tool “displays the most current and accurate information on premiums, deductibles and cost sharing that Medicare Advantage and Prescription Drug Plans provide.”

CMS also reported that the agency is not done improving the tool and has incorporated additional changes during the AEP as it receives feedback from users and stakeholders.

“We appreciate that CMS is working diligently to address problems that come up,” says Christ. “Our concern is that many people have already made decisions based on inaccurate plan finder information.”

To ensure that beneficiaries do not experience harm, Justice in Aging has asked CMS to make the Special Enrollment Period more flexible and to widely advertise its availability, she adds.