Trends That Matter

Trends That Matter for DMD Therapies

July 2, 2020

Since 2016, the FDA has approved a handful of therapies to treat Duchenne muscular dystrophy (DMD). But some uncertainty exists over their effectiveness, in addition to concerns about their costs.

When DMD is suspected, a blood test that measures creatine kinase (CK) levels is performed. “CK is an enzyme found in abnormally high levels when muscle is damaged,” Mesfin Tegenu, R.Ph., president of PerformRx, LLC., tells AIS Health. “The detection of an elevated CK level leads to molecular genetic testing to confirm a definitive diagnosis of DMD.”

Since 2016, the FDA has approved a handful of therapies to treat Duchenne muscular dystrophy (DMD). But some uncertainty exists over their effectiveness, in addition to concerns about their costs.

When DMD is suspected, a blood test that measures creatine kinase (CK) levels is performed. “CK is an enzyme found in abnormally high levels when muscle is damaged,” Mesfin Tegenu, R.Ph., president of PerformRx, LLC., tells AIS Health. “The detection of an elevated CK level leads to molecular genetic testing to confirm a definitive diagnosis of DMD.”

In February 2017, the FDA approved then-manufacturer Marathon Pharmaceuticals LLC’s Emflaza (deflazacort). The company said it would be priced at $89,000, which sparked outrage since people have been buying a generic version from overseas since the 1990s for about $1,000 per year. After the backlash, Marathon ultimately sold the drug to PTC Therapeutics Inc., which launched it later that year with a $35,000 annual price tag. Since then, PTC has raised the price to more than Marathon’s original one.

In September 2016, the FDA gave accelerated approval to Sarepta Therapeutics, Inc.’s Exondys 51 (eteplirsen). The dystrophin gene has 79 exons, and about 80% of people with DMD have genotypes that are amenable to exon skipping. Exondys 51 targets those with a mutation of the DMD gene that is amenable to exon 51 skipping.

Sarepta also has a second exon-skipping therapy, Vyondys 53 (golodirsen), which treats DMD in people with a mutation amenable to exon 53 skipping. The FDA gave the drug accelerated approval in December, almost four months after the agency rejected the drug through a complete response letter.

Both drugs are weight-based with similar prices: about $300,000 per year but up to $1 million annually.

“It’s unclear how much a health plan may spend on someone with DMD; however, a recent study from the Muscular Dystrophy Association found that the annual cost for DMD for U.S. society as a whole is around $362-$488 million dollars,” says Tegenu. “The price of the newer DMD therapies (Exondys 51 and Vyondys 53) are both estimated to cost approximately $750,000 per year for the treatment of one patient.”

Trends That Matter: Enrollment Shift Into ACA Exchanges

June 18, 2020

As the impact of the COVID-19 pandemic continues to reverberate throughout the U.S. economy, it’s become clear that there will be a major enrollment shift away from employer-sponsored plans and into Medicaid and the individual market, AIS Health reported.

In fact, one recent analysis suggested that there could be “unprecedented growth” in the individual health insurance market. “The impact of COVID-19-related job losses will likely more than double the current enrollment in Individual & Marketplace plans, with the potential for the Individual market to triple in size to over 35 million in a sustained and severe economic contraction,” stated the analysis from A2 Strategy Group.

As the impact of the COVID-19 pandemic continues to reverberate throughout the U.S. economy, it’s become clear that there will be a major enrollment shift away from employer-sponsored plans and into Medicaid and the individual market, AIS Health reported.

In fact, one recent analysis suggested that there could be “unprecedented growth” in the individual health insurance market. “The impact of COVID-19-related job losses will likely more than double the current enrollment in Individual & Marketplace plans, with the potential for the Individual market to triple in size to over 35 million in a sustained and severe economic contraction,” stated the analysis from A2 Strategy Group.

Such growth, the report said, “will come from newly unemployed individuals in all states who exceed Medicaid eligibility thresholds” because of money they receive from the Coronavirus Aid, Relief, and Economic Security Act. And in states that haven’t expanded Medicaid, nearly all of the newly unemployed who earn below 100% of the federal poverty level could qualify for Affordable Care Act premium subsidies.

Another analysis from the Urban Institute and Robert Wood Johnson Foundation (RWJF), estimated that if U.S. unemployment reaches 20%, 25 million people would lose employer-sponsored health insurance. “Of these, 11.8 million would gain Medicaid coverage, 6.2 million would gain marketplace or other private coverage, and 7.3 million would become uninsured,” it stated.

Katherine Hempstead, the senior adviser to the executive vice president at RWJF, says it’s possible the coming enrollment shifts will cause some health insurers to re-evaluate their level of participation in the ACA exchanges, which some large insurers left in 2017 and 2018 before the market stabilized.

Trends That Matter: The Future of Value-Based Agreements

June 4, 2020

The challenge of improving patient access while reducing treatment costs has led the healthcare sector to explore innovative contract arrangements. Using value-based agreements (also referred to as risk-sharing or outcomes-based contracts) biopharmaceutical manufacturers and payers agree to link coverage and reimbursement levels to a drug’s effectiveness and usage. These agreements have been a necessity in providing patients access to high-cost and high-value gene therapies. However, in chronic disease states like diabetes and cardiovascular disease, value-based contracts have been essential to managing treatment costs associated with the high-volume utilization of these treatments.

The challenge of improving patient access while reducing treatment costs has led the healthcare sector to explore innovative contract arrangements. Using value-based agreements (also referred to as risk-sharing or outcomes-based contracts) biopharmaceutical manufacturers and payers agree to link coverage and reimbursement levels to a drug’s effectiveness and usage. These agreements have been a necessity in providing patients access to high-cost and high-value gene therapies. However, in chronic disease states like diabetes and cardiovascular disease, value-based contracts have been essential to managing treatment costs associated with the high-volume utilization of these treatments.

Current challenges in value-based care include stakeholders’ alignment on which metrics are measurable and are valuable to include in an agreement, along with the presence of extensive technology and an unbiased third-party administrator to track and report on treatment outcomes. Successful implementation of such programs also involves patient adherence to treatments coordinated and monitored by physician practices or hospital systems.

That said, the question remains, how are value-based agreements going to evolve in the future?

Value-based agreements are becoming more prevalent and will continue to grow over the next two years. MMIT’s Special Report on Value Based Agreements Between Payers and Manufacturers surveyed 50 decision-makers covering 136 million commercial members and found that engagement in value-based contracts has steadily increased over the past three years. In this same survey, payers covering 85% of those commercial members reported that they anticipate increasing their participation in such agreements over the next two years.

In addition, the COVID-19 crisis is pushing integrated delivery networks and health care systems to their limits financially, which may prompt them to re-evaluate or renegotiate existing value-based agreements to prioritize their financial recovery. Similarly, accountable care organizations (ACOs) facing a similar financial crisis may experience challenges in meeting their existing value-based contract goals. To alleviate some of the concerns that such organizations are facing, CMS recently announced that it will work toward relaxing quality reporting requirements and prorate losses suffered by Medicare ACOs in 2020.

The special report also illustrates another critical finding – the surveyed payers rated their organizations as highly capable of entering value-based agreements. As a result of the pandemic, recent research suggests there is an increased likelihood of additional vertical integration of payers on one side, in addition to smaller physician practices’ integration into larger hospital systems. This trend stands to improve payers’ and physicians’ ability to track outcomes more effectively, which will bode well for value-based agreements, since they often require interoperability between payers, providers and careful monitoring of patient adherence.

If payers relax their initial and reauthorization restrictions on therapies to ease drug access during the pandemic, they will likely have a chance to revisit existing policies once the dust settles. Exploring innovative contracting methods to help payer organizations control and recuperate costs in the aftermath of the pandemic may become a necessity that could create new opportunities for value-based contracts. With an increasing number of members filing for unemployment and moving to the Medicaid line of business, this segment could also be a focus area for such agreements.

To learn more about the special report on value-based agreements between payers and manufacturers, visit https://bit.ly/3ewzTLV. For more information about the impact of COVID-19 and resources that provide actionable insights, visit https://bit.ly/2yDQoGu.

Trends That Matter for Medical-Benefit Drug Spending

May 21, 2020

Spending on prescription drugs that are covered under the medical benefit increased by 65% between 2014 and 2018 for commercial insurers and 40% for Medicare, according to Magellan Rx Management’s annual Medical Pharmacy Trend Report.

Spending on prescription drugs that are covered under the medical benefit increased by 65% between 2014 and 2018 for commercial insurers and 40% for Medicare, according to Magellan Rx Management’s annual Medical Pharmacy Trend Report.

“The increase in medical pharmacy spend seems to largely be driven by inflation,” Kristen Reimers, Magellan’s senior vice president of specialty clinical solutions, tells AIS Health. “This can be a combination of two things, increasing costs of existing drugs and providers utilizing newer more expensive drugs. The pipeline was extremely robust and new therapies to market are contributing to inflation, driving the trend.”

According to the report, new oncology therapies are both emblematic and a primary driver of growth in drug prices. A new generation of highly effective, biologic oncology drugs have emerged in the last decade. However, these pioneering drugs are expensive. According to the report, oncology drugs and the drugs needed to support them accounted for 43% of per-patient per-month medical pharmacy spending for commercial carriers.

Like other biologic drugs, most biologic oncology drugs have yet to see significant biosimilar competition due to barriers in the biosimilar market and development pipeline.

“The most exciting biosimilars are those currently in the oncology space. Herceptin, Avastin and Rituxan have been the top five drugs in terms of spend for the last 10 years,” says Reimers. “Rituxan and Avastin now have two biosimilars on the market, and Herceptin has five marketed products. There will be competition, which will help to flatten the trend for these products, although there is still expected to be growth.”

Trends That Matter for Biosimilar Medications Cost Savings

May 7, 2020

Biosimilar medications can offer meaningful cost savings for payers, but market and regulatory barriers are still preventing them from realizing their full economic potential, according to a March 31 Johns Hopkins University study funded by the ERISA Industry Committee.

Biosimilar medications can offer meaningful cost savings for payers, but market and regulatory barriers are still preventing them from realizing their full economic potential, according to a March 31 Johns Hopkins University study funded by the ERISA Industry Committee.

“We could see and empirically prove that patients…tended to be better off if they were on the biosimilar,” Mariana Socal, a physician and researcher at the Johns Hopkins Bloomberg School of Public Health and one of the study’s authors, tells AIS Health. “They had lower out-of-pocket costs when they were on the biosimilar.”

While 16 biosimilars have earned FDA approval, according to the report, most of those drugs are the only biosimilar in their category, creating a duopoly price structure rather than robust market competition with at least three drugs.

Per the report, multiple biosimilars have entered the market for only two drugs, Remicade (infliximab) and Neupogen (filgrastim). The report concludes that, in those categories, biosimilar competition has generated remarkable cost savings and has the potential to generate much more through increased biosimilar use.

For infliximab, the reference biologic Remicade currently has the most covered lives among commercial formularies, while for filgrastim, Zarxio (a biosimilar for Neupogen) is the leader in market access, according to MMIT data.

Trends That Matter for Bipolar Disorder Medications

April 23, 2020

A recently approved brand drug for bipolar disorder will have little impact on how health plans cover these medications, experts tell AIS Health. Health plans will continue to encourage the use of less expensive generic bipolar drugs.

A recently approved brand drug for bipolar disorder will have little impact on how health plans cover these medications, experts tell AIS Health. Health plans will continue to encourage the use of less expensive generic bipolar drugs.

The brand drug, Allergan plc’s Vraylar (cariprazine), was approved by the FDA to treat depressive episodes associated with bipolar 1 disorder in adults. It is an oral, once-daily atypical antipsychotic.

Health plans employ several utilization management techniques for bipolar drugs, according to Mesfin Tegenu, R.Ph., president of PerformRx. Some examples include prior authorization, duplicate therapy edits, age restrictions and step therapy.

For Vraylar, health plans will use prior authorization or steps to encourage the use of a generic bipolar drug first, Michael Schneider, a principal at Avalere Health, tells AIS Health. There also could be some higher out-of-pocket costs for Vraylar even when compared to some of the other branded antipsychotic drugs.

Vraylar is in a protected drug class on the Medicare side, Schneider says. Because it is the first brand drug of a particular chemical entity, plans have to cover it. In some Medicare plans, Vraylar is disadvantaged because even through it is in a protected class, there are still utilization management techniques placed on the product, as well as higher cost sharing, he says.

In Medicaid, many states require all the antipsychotic bipolar drugs to be on the formulary with no utilization management, Schneider adds.

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