Trends That Matter

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.

Trends That Matter for Prostate Cancer Treatments

August 27, 2020

Although poly ADP-ribose polymerase (PARP) inhibitors are not new to the market, two of them recently gained approval for use in prostate cancer for the first time. The therapies will bring a new option for the treatment of certain subpopulations of patients, AIS Health reported.

On May 19, the FDA expanded the label of AstraZeneca and Merck & Co., Inc.’s Lynparza (olaparib) to include the treatment of people with deleterious or suspected deleterious germline or somatic homologous recombination repair gene-mutated metastatic castration-resistant prostate cancer who have progressed following treatment with Xtandi (enzalutamide) or Zytiga/Yonsa (abiraterone acetate).

Although poly ADP-ribose polymerase (PARP) inhibitors are not new to the market, two of them recently gained approval for use in prostate cancer for the first time. The therapies will bring a new option for the treatment of certain subpopulations of patients, AIS Health reported.

On May 19, the FDA expanded the label of AstraZeneca and Merck & Co., Inc.’s Lynparza (olaparib) to include the treatment of people with deleterious or suspected deleterious germline or somatic homologous recombination repair gene-mutated metastatic castration-resistant prostate cancer who have progressed following treatment with Xtandi (enzalutamide) or Zytiga/Yonsa (abiraterone acetate).

On May 15, the FDA gave accelerated approval to Clovis Oncology, Inc.’s Rubraca (rucaparib) for the treatment of adults with a deleterious BRCA mutation (germline and/or somatic)-associated metastatic castration-resistant prostate cancer who have been treated with androgen receptor-directed therapy and a taxane-based chemotherapy.

Two other PARP inhibitors — GSK’s Tesaro, Inc.’s Zejula (niraparib) and Pfizer Inc.’s Talzenna (talazoparib) — are on the market, and both are in clinical trials for prostate cancer.

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

Trends That Matter for Major Insurers’ Performance Amid COVID-19

August 13, 2020

With COVID-19 cases and deaths surging in some U.S. states, it has become clear that the nation won’t be back to normal anytime soon. Still, the country’s largest health insurer is betting that health care utilization, and the costs associated with it, will return to something close to typical levels in the second half of the year, AIS Health reported.

With COVID-19 cases and deaths surging in some U.S. states, it has become clear that the nation won’t be back to normal anytime soon. Still, the country’s largest health insurer is betting that health care utilization, and the costs associated with it, will return to something close to typical levels in the second half of the year, AIS Health reported.

At its lowest point in April, inpatient care volume — including care for COVID-19 patients — was about three quarters less than normal, UnitedHealth Group Chief Financial Officer John Rex said during a July 15 conference call to discuss the company’s second-quarter earnings. At that same low point, utilization of outpatient and physician services fell to roughly 60% of normal levels. But in June, UnitedHealth saw inpatient volume recover to nearly 95% of baseline, and as June turned to July, outpatient and physician services were “tracking above 90%,” Rex said. “These national trends have continued thus far in July, even as certain states are seeing short-term deferral of services where there are elevated levels of infection and hospitalization,” he added.

Indeed, the company predicts that overall, “utilization’s going to come back during the second half of the year,” UnitedHealthcare CEO Dirk McMahon said.

In a note to investors, Citi analyst Ralph Giacobbe observed that the executives’ comments about health care utilization returning to normal were “surprising to us.”

“Ultimately we believe healthcare cost trends will remain muted, and as we look out over the next 12+ months we see those trends driving upside, and lower headline risk post-election driving multiples higher,” Giacobbe added.

Below shows the key financial data for leading health plans in the second quarter of 2020 and 2019.