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Trends That Matter

Trends That Matter for Rx Benefits in Medicaid

February 25, 2021

Beginning in April, California and New York will join a growing list of states that have opted to carve out prescription drug benefits from their Medicaid contracts with insurers, wagering that the state can do a better job at negotiating drug prices with manufacturers than managed care organizations and their contracted PBMs, AIS Health reported.

“I think the pharmacy benefit overall will be something that states are looking at in order to find savings in some way — whether through carveouts or through another policy — just because there are limited levers that the state is going to be able to pull to save money,” says Rachel Dolan, a senior policy analyst with the Kaiser Family Foundation’s Program on Medicaid and the Uninsured.

Beginning in April, California and New York will join a growing list of states that have opted to carve out prescription drug benefits from their Medicaid contracts with insurers, wagering that the state can do a better job at negotiating drug prices with manufacturers than managed care organizations and their contracted PBMs, AIS Health reported.

“I think the pharmacy benefit overall will be something that states are looking at in order to find savings in some way — whether through carveouts or through another policy — just because there are limited levers that the state is going to be able to pull to save money,” says Rachel Dolan, a senior policy analyst with the Kaiser Family Foundation’s Program on Medicaid and the Uninsured.

Other states that have carved out their drug benefits from managed care contracts include Missouri, North Dakota, Tennessee, West Virginia and Wisconsin, and Nevada plans to carve out the prescription drug benefit in fiscal year 2023 when its MCO contracts are renewed.

One catalyst for the carveouts may be the increasing scrutiny on spread pricing, which occurs when PBMs charge payers more for prescription drugs than the amount they reimburse pharmacies and retain the difference.

“It also allows the state more control over their formulary and their payment policy, and it can also help them potentially negotiate more supplemental rebates with manufacturers if basically all the drugs are in one big pool covered by the state,” Dolan adds.

For Medicaid MCOs, there are a host of important considerations when states opt to carve out their pharmacy benefits, notes Brian Anderson, a principal with Milliman. For example, such a move will generally hinder MCOs’ ability to influence prescribing practices, which “have a profound impact on drug utilization and drug mix,” he says. Pharmacy networks are another key issue, as MCOs often use closed networks but some states have any-willing-provider regulations for pharmacy participation in networks.

Trends That Matter for Prevention of HAE Attacks

February 11, 2021

When the FDA approved BioCryst Pharmaceuticals, Inc.’s Orladeyo (berotralstat) in December 2020, the drug became the first oral treatment for prophylaxis to prevent hereditary angioedema (HAE) attacks, AIS Health reported. According to Zitter Insights, payers with nearly three-quarters of covered lives plan to manage it at parity to other prophylactic treatments.

The FDA approved the first drug to treat HAE, Shire plc’s Cinryze (C1 esterase inhibitor [human]), on Oct. 10, 2008. Since then, the FDA has approved eight drugs to treat HAE: half for acute attacks and half for prophylaxis.

When the FDA approved BioCryst Pharmaceuticals, Inc.’s Orladeyo (berotralstat) in December 2020, the drug became the first oral treatment for prophylaxis to prevent hereditary angioedema (HAE) attacks, AIS Health reported. According to Zitter Insights, payers with nearly three-quarters of covered lives plan to manage it at parity to other prophylactic treatments.

The FDA approved the first drug to treat HAE, Shire plc’s Cinryze (C1 esterase inhibitor [human]), on Oct. 10, 2008. Since then, the FDA has approved eight drugs to treat HAE: half for acute attacks and half for prophylaxis.

Orladeyo will compete against Cinryze, Haegarda (C1 esterase inhibitor [human]) and Takhzyro (lanadelumab-flyo) to prevent HAE attacks.

For the Managed Care Biologics and Injectables Index: Q1 2020, between Feb. 25, 2020, and April 1, 2020, Zitter surveyed 51 commercial payers with 138.1 million covered lives about their anticipated management of Orladeyo. Payers covering 93% of lives said they likely would manage it to label and not allow off-label use.

Among 46 commercial payers with 130.3 million covered lives surveyed during the same time period, payers with 74% of covered lives said they were likely to manage Orladeyo at parity to the prophylactic therapies. And even though it is the only oral HAE drug, payers with 80% of lives said they were unlikely to manage it separately from the other drugs based on route of administration.

Among providers who would transition current patients to Orladeyo, the most likely prophylactic agent to transfer from was Cinryze, cited by 42%; followed by Haegarda, at 25%; and Takhzyro at 8%.

Trends That Matter for Epilepsy Medications’ Market Access

January 28, 2021

Pharmaceutical treatment for different types of epilepsy generally still relies on tried-and-true generics, despite recent efforts by drug manufacturers to introduce new branded medications into the mix, PBM insiders tell AIS Health.

Xcopri (cenobamate tablets), manufactured by SK Biopharmaceuticals Co., Ltd.’s subsidiary SK Life Science, Inc., launched in May for the treatment of partial-onset seizures. However, many plans haven’t jumped to add Xcopri to their formularies, says Mesfin Tegenu, R.Ph., president of PerformRx.

Pharmaceutical treatment for different types of epilepsy generally still relies on tried-and-true generics, despite recent efforts by drug manufacturers to introduce new branded medications into the mix, PBM insiders tell AIS Health.

Xcopri (cenobamate tablets), manufactured by SK Biopharmaceuticals Co., Ltd.’s subsidiary SK Life Science, Inc., launched in May for the treatment of partial-onset seizures. However, many plans haven’t jumped to add Xcopri to their formularies, says Mesfin Tegenu, R.Ph., president of PerformRx.

“Some plans have opted to take a cautious approach and leave the medication as non-formulary to start,” Tegenu says. “It is difficult to tell the impact of this new drug launch on the treatment of epilepsy. However, Xcopri trials demonstrated high efficacy in partial onset seizures and refractory epilepsy, lending it a strong clinical profile. One could reasonably suspect a high impact on the epilepsy treatment paradigm.”

In most cases, though, generics are the first-line treatments for many forms of the disorder, according to Tegenu. Many of the drugs used to treat epilepsy are covered without restriction by plans.

Prime Therapeutics LLC treats Xcopri as a non-preferred brand, says April Kunze, senior director of clinical formulary development and trend management strategy for the PBM. Premera Blue Cross’ Medicare Advantage formularies, Cigna Corp.’s national preferred formulary and HealthPartners’ commercial formularies impose quantity limits on Xcopri, according to their plan documents.

“Treatment is based on the type of epilepsy diagnosed, and labeled and off-label indications of the individual products. There is a fair amount of overlap as many drugs share multiple indications. However, many newer agents are narrowly indicated,” Tegenu says.

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

Trends That Matter for MCO’s Role in COVID Vaccine Rollout

January 14, 2021

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.

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.”

In a preliminary analysis — or snapshot — of fee-for-service Medicare claims and Medicare Advantage encounter data from Jan. 1 to Sept. 12, 2020, CMS reported 1.19 million COVID-19 cases and 332,672 related hospitalizations among all 62.3 million beneficiaries. That’s a rate of 517 hospitalizations per 100,000 lives. The data puts into stark clarity what is already suspected about the virus: those at the highest risk of developing severe complications are older, lower income, have preexisting conditions and (with the exception of Asian beneficiaries) are more likely to be racial minorities.

Trends That Matter for COVID Vaccine Distribution

December 31, 2020

As details continue to emerge about the availability of COVID-19 vaccines and how they will be administered, the role that payers will play in the process is becoming clearer, AIS Health reported.

It’s imperative for health plans to do two key things at the same time, according to Katherine Dallow, M.D., the vice president of clinical programs and strategy at Blue Cross Blue Shield of Massachusetts. Payers need to help the entities that will be distributing the vaccine to identify the individuals who should be first in line to be vaccinated, and they need to use their resources to help educate the community.

As details continue to emerge about the availability of COVID-19 vaccines and how they will be administered, the role that payers will play in the process is becoming clearer, AIS Health reported.

It’s imperative for health plans to do two key things at the same time, according to Katherine Dallow, M.D., the vice president of clinical programs and strategy at Blue Cross Blue Shield of Massachusetts. Payers need to help the entities that will be distributing the vaccine to identify the individuals who should be first in line to be vaccinated, and they need to use their resources to help educate the community.

“We might be able to put a puzzle together that an individual provider or group may not have,” she said during a Nov. 18 National Institute for Health Care Management (NICHM) Foundation webinar. “Data from many sources should be used to ensure those who are most vulnerable are ID’d per federal and state guidelines. We can see where folks have seen three different doctors, used telehealth and gone to urgent care.”

In addition, health plans are more likely than providers to have better data about whether individuals have received each of their vaccine doses. That’s because states may expand the scope of the type of providers that can administer vaccines in an effort to broaden access.

While multiple vaccines appear ready to come to market, health plans do have some concerns. According to a recent Avalere Health survey of 39 U.S. health plans and one PBM, collectively representing about 48 million covered lives, the effectiveness of vaccines and therapeutics is the top COVID-19 concern for more than 47% of health plans.

Trends That Matter: Centene’s ACA Expansion

December 17, 2020

Centene Corp., which has come to dominate the Affordable Care Act exchange market by continuing to expand even when other carriers pulled back, is facing more competition now that the market has stabilized and insurer participation has increased, AIS Health reported.

Given that dynamic, Citi analyst Ralph Giacobbe advised investors recently that he was placing a “negative catalyst watch” on Centene due to the new competitive pressures it’s facing. Centene, he observed, “was displaced as the lowest priced plan in a number of markets,” and so the insurer “will have to rely on retention and new market entry to offset competitive pressures, which could prove challenging and may stunt growth relative to expectations.”

Centene Corp., which has come to dominate the Affordable Care Act exchange market by continuing to expand even when other carriers pulled back, is facing more competition now that the market has stabilized and insurer participation has increased, AIS Health reported.

Given that dynamic, Citi analyst Ralph Giacobbe advised investors recently that he was placing a “negative catalyst watch” on Centene due to the new competitive pressures it’s facing. Centene, he observed, “was displaced as the lowest priced plan in a number of markets,” and so the insurer “will have to rely on retention and new market entry to offset competitive pressures, which could prove challenging and may stunt growth relative to expectations.”

SVB Leerink analyst Stephen Tanal, however, takes a more optimistic view. “I’m pretty comfortable saying Centene’s likely to grow their overall HIX [health insurance exchange] earnings, because they’re going to be in so many more places with higher premiums,” he tells AIS Health.

According to Tanal’s analysis, Centene is increasing its county-level, member-weighted bronze plan premium by about 4% and raising premiums across all metal levels by 4% to 6%. Centene is also expanding its geographic footprint next year, a move that Tanal estimates will put the insurer in 61% more counties than it covered in 2020.

But Tanal did notes that the exchanges next year will feature “more competition in the form of fewer monopoly markets and a larger number of local market competitors.”

“It is definitely more competitive,” Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, says of the 2021 ACA exchange market. “There’s more participants and it’s not just the Medicaid MCOs spreading out into more places.”