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Trends That Matter

Trends That Matter for Employer Health Benefits

November 19, 2020

Several recent surveys on employer-sponsored health insurance have found that plan sponsors are following three major trends: expanding virtual care and telehealth benefits, narrowing provider networks and emphasizing centers of excellence in their benefit designs, AIS Health reported.

According to the 2020 edition of the Kaiser Family Foundation’s (KFF) Employer Health Benefits Survey, this year’s annual premium growth (4% for individuals and families) outstripped both wage growth (3.4%) and inflation (2.1%).

Several recent surveys on employer-sponsored health insurance have found that plan sponsors are following three major trends: expanding virtual care and telehealth benefits, narrowing provider networks and emphasizing centers of excellence in their benefit designs, AIS Health reported.

According to the 2020 edition of the Kaiser Family Foundation’s (KFF) Employer Health Benefits Survey, this year’s annual premium growth (4% for individuals and families) outstripped both wage growth (3.4%) and inflation (2.1%).

Other surveys project similar results in 2021, but caution that the pandemic saddles employers with unprecedented risk and uncertainty when setting premiums. The main cause of that uncertainty is utilization. Health insurers reported a dramatic fall in claims during the second quarter of 2020, but indications are that utilization begun to return to somewhat normal levels in the third quarter.

“There’s a lot of chatter specifically about [Affordable Care Act] marketplace insurers and about how they are experiencing fewer claims than expected,” says James Gelfand, senior vice president for the ERISA Industry Committee. “That’s not what I’m hearing from member companies. They feel like they’re under the same dynamic that they’ve been under for a decade: costs are going up, and the things they’re doing to try and save money have had a very mediocre effect.”

That tension has led to the emerging trend of narrower networks. Lowering costs and reducing unnecessary utilization is a key goal of narrowing provider networks, along with emphasizing quality and return on investment.

Concerns about COVID-19 exposure have caused a boom in virtual care and telehealth utilization, as patients have avoided in-person clinical visits. Hodgson says that plan sponsors and insurers need to determine how virtual visits will fit into benefit designs going forward.

Trends That Matter for Major PBMs’ 2021 Formulary

November 5, 2020

CVS Health Corp.’s Caremark will exclude 57 medications from its 2021 formulary and add six back. Meanwhile, UnitedHealth Group’s OptumRx subsidiary will exclude 19 medications and products while adding back five and implementing restrictions on others, AIS Health reported.

Still, only a handful of products excluded by either PBM are likely to impact many members adversely, says Marc Guieb, a pharmacist and consultant with Milliman Inc. That also applies to the exclusions announced earlier by Cigna Corp.-owned PBM Express Scripts, he adds.

Guieb observes that brand-name albuterol inhalers are seeing exclusions in 2021 from multiple PBMs, and that’s the change that will affect the most members. “That’s a big one this year,” he says. “One of the PBMs’ new strategies is, they’re completely excluding all the brands of albuterol inhalers, and they’re just going with the generic.”

CVS Health Corp.’s Caremark will exclude 57 medications from its 2021 formulary and add six back. Meanwhile, UnitedHealth Group’s OptumRx subsidiary will exclude 19 medications and products while adding back five and implementing restrictions on others, AIS Health reported.

Still, only a handful of products excluded by either PBM are likely to impact many members adversely, says Marc Guieb, a pharmacist and consultant with Milliman Inc. That also applies to the exclusions announced earlier by Cigna Corp.-owned PBM Express Scripts, he adds.

Guieb observes that brand-name albuterol inhalers are seeing exclusions in 2021 from multiple PBMs, and that’s the change that will affect the most members. “That’s a big one this year,” he says. “One of the PBMs’ new strategies is, they’re completely excluding all the brands of albuterol inhalers, and they’re just going with the generic.”

Meanwhile, “the change that will actually cause the most widespread disruption and confusion will be diabetics switching to entirely new blood glucose monitoring systems, which is a hassle,” Guieb says.

PBMs that decide to prefer one specialty drug over another also can cause significant member disruption, Guieb adds, pointing to potential issues involving Novartis Pharmaceuticals Corp.’s biologic Cosentyx (secukinumab), which was excluded from Express Scripts’ 2021 formulary in favor of Eli Lilly and Co.’s Taltz (ixekizumab).

Overall, “I will say that for a lot of these annual formulary changes, they’re definitely a step in the right direction, although it may not be a big enough step in the right direction,” Guieb adds.

For 2021, OptumRx is changing up its multiple sclerosis coverage, adding Biogen’s Tecfidera (dimethyl fumarate) to its excluded list and preferring bioequivalent Bafiertam, made by Banner Life Sciences. Biogen’s Vumerity (diroximel fumarate) remains excluded.

Graphics below list medications that will be excluded by two or three major PBMs and their current market access among commercial formularies under the pharmacy benefit.

Trends That Matter for CAR-T Therapies

October 22, 2020

This summer, a drug called Tecartus (brexucabtagene autoleucel) became the third chimeric antigen receptor T-cell (CAR-T) therapy approved by the FDA. CAR-T therapies, which use a patient’s genetically modified immune cells to target and fight cancer cells, are a cutting-edge type of treatment that comes with eye-popping price tags, ranging from $373,000 to $475,000. However, a new report from OptumRx highlights an “industry trend to watch” that could eventually provide some relief to payers worried about how to finance CAR-T treatments, AIS Health reported.

Currently, CAR-T therapies’ high cost is at least in part attributable to the “labor-intensive and time-consuming” manufacturing process for such drugs, stated the UnitedHealth Group-owned PBM’s Drug Pipeline Insights Report for the third quarter of 2020. Essentially, T-cells are taken from a patient, treated and multiplied in a lab, and reinfused into the same patient — a completely personalized process known as autologous therapy.

This summer, a drug called Tecartus (brexucabtagene autoleucel) became the third chimeric antigen receptor T-cell (CAR-T) therapy approved by the FDA. CAR-T therapies, which use a patient’s genetically modified immune cells to target and fight cancer cells, are a cutting-edge type of treatment that comes with eye-popping price tags, ranging from $373,000 to $475,000. However, a new report from OptumRx highlights an “industry trend to watch” that could eventually provide some relief to payers worried about how to finance CAR-T treatments, AIS Health reported.

Currently, CAR-T therapies’ high cost is at least in part attributable to the “labor-intensive and time-consuming” manufacturing process for such drugs, stated the UnitedHealth Group-owned PBM’s Drug Pipeline Insights Report for the third quarter of 2020. Essentially, T-cells are taken from a patient, treated and multiplied in a lab, and reinfused into the same patient — a completely personalized process known as autologous therapy.

As the industry searches for a cheaper and more scalable way of manufacturing CAR-T treatments, a new approach known as an allogeneic process “is currently under study as one possible solution,” according to OptumRx. In this process, previously extracted and banked healthy donor T-cells are multiplied “many times over for use in many patients,” effectively spreading out the high initial manufacturing cost over multiple doses.

When asked how much the allogeneic process could reduce the manufacturing cost of CAR-T therapies, Bill Dreitlein, senior director of pipeline and drug surveillance at OptumRx, cited a 2019 study.

“Per the International Society for Cell and Gene Therapy, the cost to manufacture CAR-T using current methods is at $95,780 per dose,” he says via email. “That study also calculates the production cost using the new process would be only $4,460 per dose — over 95% lower.”

Tecartus’ list price is $373,000, and the wholesale acquisition costs of the other CAR-T therapies, Kymriah (tisagenlecleucel) and Yescarta (axicabtagene ciloleucel), are $373,000 and $475,000 respectively, per the OptumRx report.

The graphic below show how Tecartus, Kymriah and Yescarta are covered among commercial health plans, health exchange programs, Medicare and Medicaid programs under the pharmacy benefit.

Trends That Matter on Trump Administration’s Rebate Order

October 8, 2020

A promised executive order that would tie drug prices to their costs in other countries has yet to emerge, although President Donald Trump has promoted the order as part of his re-election campaign. Meanwhile, payers and PBMs are continuing to push back against three executive orders the Trump administration issued in July with the intention of lowering drug prices, one of which would overhaul the Medicare Part D prescription drug rebate system, AIS Health reported.

“I think the purpose of these executive orders is to give the president some talking points going into the debates,” says Avalere Health founder Dan Mendelson. He adds that, regardless of their purpose, the orders will not make a difference in the real world any time soon.

A promised executive order that would tie drug prices to their costs in other countries has yet to emerge, although President Donald Trump has promoted the order as part of his re-election campaign. Meanwhile, payers and PBMs are continuing to push back against three executive orders the Trump administration issued in July with the intention of lowering drug prices, one of which would overhaul the Medicare Part D prescription drug rebate system, AIS Health reported.

“I think the purpose of these executive orders is to give the president some talking points going into the debates,” says Avalere Health founder Dan Mendelson. He adds that, regardless of their purpose, the orders will not make a difference in the real world any time soon.

Meanwhile, the executive orders that actually have been released are being criticized from stakeholders across health care. The order that would remove safe harbor protections from the Anti-Kickback Statute for prescription drug rebates in Medicare Part D has been panned even by conservatives.

Alex Brill, a resident fellow at the American Enterprise Institute (AEI), penned a white paper sponsored by PBM trade group Pharmaceutical Care Management Association (PCMA) that concluded the executive order would “restrict an important tool for providing savings to the federal government and Medicare Part D beneficiaries. Moreover, net drug costs and drug company revenues would rise significantly if the Medicare Part D safe harbor for rebates is eliminated.”

Trends That Matter for COVID Cost-Sharing Waivers

September 24, 2020

Although federal relief legislation tied to the pandemic required health insurers to waive cost sharing for COVID-19 testing, not treatment, many plans opted to do both anyway. In fact, a recent analysis from the Kaiser Family Foundation (KFF) found that 80% of enrollees in the individual and fully insured group insurance markets were in plans that voluntarily waived out-of-pocket costs for COVID-19 at some point during the pandemic, AIS Health reported.

Yet according to the Peterson-KFF Health System Tracker analysis, published Aug. 20, 20% of individual and fully insured group plan enrollees are in plans where a cost-sharing waiver for COVID-19 treatment has already expired, and another 16% are in plans where the waiver is scheduled to expire by the end of September.

Although federal relief legislation tied to the pandemic required health insurers to waive cost sharing for COVID-19 testing, not treatment, many plans opted to do both anyway. In fact, a recent analysis from the Kaiser Family Foundation (KFF) found that 80% of enrollees in the individual and fully insured group insurance markets were in plans that voluntarily waived out-of-pocket costs for COVID-19 at some point during the pandemic, AIS Health reported.

Yet according to the Peterson-KFF Health System Tracker analysis, published Aug. 20, 20% of individual and fully insured group plan enrollees are in plans where a cost-sharing waiver for COVID-19 treatment has already expired, and another 16% are in plans where the waiver is scheduled to expire by the end of September.

Daniel McDermott, a KFF research associate and co-author of the analysis, says that the calculus could change for some insurers as the pandemic wears on.

“Among the insurers who have pushed back their expiration date or extended it, a lot of them had initially set expiration deadlines in early spring — so around May — only to push those back as that date approached,” he says. “So I think it would be reasonable to expect that as some of these fall expiration dates approach, some insurers might take the opportunity to re-evaluate…and make a decision about whether to push back that expiration date again.”

Among enrollees in individual and fully insured group health insurance, 15% were in plans where the expiration date of the COVID-19 treatment cost-sharing waiver was either unspecified or set to end when the public health emergency does, observed the KFF analysis.

Trends That Matter for Large Employers in 2021

September 10, 2020

While the COVID-19 pandemic has not caused employers to significantly alter their health care cost estimates for the coming year, it has unquestionably intensified their interest in embracing virtual care. Those are just a couple of the major findings from the Business Group on Health’s 2021 Large Employers’ Health Care Strategy and Plan Design Survey, AIS Health reported.

Notably, 80% of respondents said they believe virtual health will play a significant role in how care is delivered in the future, up considerably from 64% last year. Further, when asked about actions they were taking to ease the burdens of COVID-19 for employees, the largest share of respondents — 76% — said they “made changes to allow for better access to virtual care solutions.”

While the COVID-19 pandemic has not caused employers to significantly alter their health care cost estimates for the coming year, it has unquestionably intensified their interest in embracing virtual care. Those are just a couple of the major findings from the Business Group on Health’s 2021 Large Employers’ Health Care Strategy and Plan Design Survey, AIS Health reported.

Notably, 80% of respondents said they believe virtual health will play a significant role in how care is delivered in the future, up considerably from 64% last year. Further, when asked about actions they were taking to ease the burdens of COVID-19 for employees, the largest share of respondents — 76% — said they “made changes to allow for better access to virtual care solutions.”

During an Aug. 18 press briefing, Business Group on Health President and CEO Ellen Kelsay attributed such findings to not only telehealth’s ability to offer more convenience and greater access for consumers, but also to the sheer necessity of pivoting to a different care modality amid widespread stay-at-home orders.

Regarding the controversial issue of telehealth reimbursement, which payers generally want to be lower than in-person visits but providers want to be equal, Kelsay said her organization supports payment flexibility over parity. In some cases, that “might mean less reimbursement for telehealth, and in other instances maybe increased reimbursement for telehealth if it’s a better modality for delivery, depending on the situation,” she added.

Kelsay also emphasized that there are still more questions than answers about how the pandemic will affect health care costs for companies and their workers. For 2021, the Business Group on Health is projecting the total cost of health benefits will rise by 5.3% — slightly higher than the 5% trend it predicted in the past few years.