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Perspectives on FDA’s Approval of New Opioid Formulation

December 13, 2018

When a highly potent new opioid formulation was approved by his agency on Nov. 2, FDA Commissioner Scott Gottlieb, M.D., downplayed safety concerns about AcelRx’s Dsuvia. He stressed the importance of the painkiller for military use and the “very tight restrictions being placed on the distribution and use of this product,” AIS Health reported.

When a highly potent new opioid formulation was approved by his agency on Nov. 2, FDA Commissioner Scott Gottlieb, M.D., downplayed safety concerns about AcelRx’s Dsuvia. He stressed the importance of the painkiller for military use and the “very tight restrictions being placed on the distribution and use of this product,” AIS Health reported.

In general, PBM and health plan experts say such restrictions likely will hold and keep the drug within its proper niche, and the regulatory green light for Dsuvia shouldn’t interfere with broad ongoing efforts to better manage opioid use in the U.S.

Dsuvia is a sublingual formulation of an established drug, sufentanil, that is delivered through a disposable, pre-filled, single-dose applicator. It’s seen as ideally suited for certain special circumstances where patients may not be able to swallow oral medication, and where access to intravenous pain relief is not possible, including its potential use on the battlefield. Gottlieb notes that this opioid formulation, along with Dsuvia’s delivery device, was “a priority medical product” for the Pentagon because it fills a specific, though limited, unmet medical need.

Mesfin Tegenu, R.Ph., president of PerformRx, LLC., says, “A single-dose applicator could potentially prevent abuse due to the complexity of removing it [i.e., the medication] from the applicator. However, because it is 10 times more potent than fentanyl and 1,000 times more potent than morphine, the diversion of even one tablet can be risky.”

Tegenu adds that restricting the sites where Dsuvia can be administered “is a good step in preventing misuse. However, there is no guarantee that such a diversion will not occur and contribute to the opioid crisis.”

Yet Sharon Jhawar, Pharm.D., chief pharmacy officer for SCAN Health Plan, doesn’t anticipate a significant problem with diversion of the strong medication.

“Our perspective on Dsuvia is it’s been approved only in specific health care settings by someone who is medically trained, and is really for severe, acute pain in which other opioids would not be enough,” she says. “And because of the requirement of the setting and who needs to give it, this isn’t a medication you’re going to see insurers have on their formulary.”

Radar On Market Access: New MA Rule Touches Protected Classes, Imposes Pricing Tool

December 13, 2018

CMS on Nov. 26 issued a proposed rule making changes to the Medicare Advantage and Part D programs that would take effect in 2020. Key provisions in CMS’s latest drug pricing rule include a proposal to extend new flexibility to plan sponsors in the area of so-called six “protected” drug classes and the required implementation of a new electronic real-time benefit tool (RTBT), AIS Health reported.

CMS on Nov. 26 issued a proposed rule making changes to the Medicare Advantage and Part D programs that would take effect in 2020. Key provisions in CMS’s latest drug pricing rule include a proposal to extend new flexibility to plan sponsors in the area of so-called six “protected” drug classes and the required implementation of a new electronic real-time benefit tool (RTBT), AIS Health reported.

Under CMS’s Contract Year 2020 Medicare Advantage and Part D Drug Pricing Proposed Rule, plans would be able to:

Implement broader use of prior authorization and step therapy for protected class drugs;
Exclude a protected class drug from a formulary if the drug represents only a new formulation of an existing single-source drug or biological product, regardless of whether the older formulation remains on the market; and
Exclude a protected class drug from a formulary if the price of the drug increased beyond a certain threshold over a specified look-back period.
“I think being able to exclude [certain] protected class drugs from the formulary is going to be very significant for plans….And it is going to force the pharmaceutical companies to work more within the formulary managed care communication,” remarks Michael Strazzella at Buchanan, Ingersoll & Rooney PC.

CMS in the proposed rule extended the opportunity given to plans for 2019 to implement appropriate utilization management tools for managing Part B drugs. The new rule included a proposal to modify Part D adjudication time periods for organization determinations and appeals involving Part B drugs to make sure that enrollees maintain access to all medically necessary Part B covered therapies.

“This Part B and Part D comingling will be easier for MA-PD [Medicare Advantage prescription drug] plans that already have a Pharmacy & Therapeutics Committee in place,” says Heidi Harmon at Gorman Health Group. “MA-only plans will now need to develop and utilize a P&T Committee.”

The recent rule also proposed a new requirement that each plan adopt an RTBT by Jan. 1, 2020. This tool would allow prescribers to have a “complete view of the beneficiary’s prescription benefit information.” Plans are encouraged to “promote full drug cost transparency by showing each drug’s full negotiated price.”

“I think it’s going to be very interesting if they decide to try and forward with the tool,” says Strazzella. “Information doesn’t hurt decisions, but whether it gets utilized or not is unclear to me. And if medical decisions are going to be totally based on pricing, that’s a dangerous way to go.” And it would require “constant monitoring” and additional education to providers, which could be challenging, he adds.

Radar On Market Access: Despite Threatening to Halt Integration, Judge Is Likely to Sign Off on CVS/Aetna Deal

December 11, 2018

According to CVS Health Corp., its acquisition of Aetna Inc. closed on Nov. 28 after receiving the last required approval from a state regulator. But a federal judge appears to have other ideas.

According to CVS Health Corp., its acquisition of Aetna Inc. closed on Nov. 28 after receiving the last required approval from a state regulator. But a federal judge appears to have other ideas.

In a hearing on Dec. 3, Judge Richard Leon of the U.S. District Court for the District of Columbia said he might halt CVS and Aetna’s integration efforts while he reviews the $69 billion deal, according to The Wall Street Journal.

Though the Department of Justice approved the transaction in October — contingent upon Aetna selling off its stand-alone Medicare Part D assets — Leon has the authority to review that settlement, through a statute known as the Tunney Act, to ensure that the proposed remedy for any antitrust issue is in the public interest.

Following a Dec. 3 hearing in which he expressed skepticism about the DOJ’s settlement, Leon ordered the parties involved in the case to “show cause why I should not order CVS to hold its acquired Aetna business as a separate entity and to insulate the management of the CVS business from the management of the Aetna business, and vice versa, until I have made my determination as to whether to enter final judgment in this case,” according to court documents. Written arguments are due by Dec. 14, and Leon plans to hold a hearing on Dec. 18.

So can a federal judge actually halt an acquisition that the DOJ has already approved?

“I don’t believe the Tunney Act extends that far,” antitrust attorney James Burns of Akerman LLP tells AIS Health via email. “The reason why I say that is because, under the Tunney Act, the issue before him is the sufficiency of the remedy that the parties have agreed to, and whether it serves the public interest, not whether the merger itself should be enjoined.”

Thus, Burns says he’s confident that Leon will ultimately approve the CVS/Aetna transaction, as he’s not aware of any case where a federal judge, in the end, rejected a merger settlement that the DOJ proposed.

Radar On Market Access: Future of Potential Humana/ Walgreens Tie-Up Is Murky

December 6, 2018

Just days before CVS Health Corp. said it closed its $69 billion acquisition of Aetna Inc., reports emerged that another retail pharmacy giant and health insurer— Walgreen Co. and Humana Inc. — are in preliminary talks to take equity stakes in each other.

Just days before CVS Health Corp. said it closed its $69 billion acquisition of Aetna Inc., reports emerged that another retail pharmacy giant and health insurer— Walgreen Co. and Humana Inc. — are in preliminary talks to take equity stakes in each other.

Walgreens and Humana are already collaborating on a pilot project in which the insurer opened senior- focused primary care clinics in two Walgreens stores in the Kansas City, Mo., region. Now the companies are in “wide-ranging” talks about either expanding that venture or taking stakes in each other, according to The Wall Street Journal.

If Humana and Walgreens do decide to establish cross-holdings in each other, it would be “a very interesting and shrewd play,” Rita Numerof, Ph.D., president and founder of Numerof & Associates, tells AIS Health.

“We know that a lot of outright M&A doesn’t deliver value at the end of the day,” she says. But taking equity stakes in each other isn’t a true acquisition, “so you don’t have all of the risks and costs associated with bringing [a] business under the umbrella of one that’s very, very different.”

In an note to investors, Leerink analyst Ana Gupte pointed to the upside for Humana. “Equity stakes are a way for the two companies to share economics across the different economic pools across clinical, MA distribution and associated retail pharmacy fills and front store sales, which can drive several hundred million dollars of value for [Humana] annually in EBIT [earnings before interest and taxes].”

But Jefferies analysts wondered if perhaps Walgreens might be the bigger winner, since the pharmacy business model “is under more direct attack from disruptive players than are health plans” and “partnering with [Humana] helps [Walgreens] drive market share.”

Jay Godla, a partner at PwC’s Strategy&, says that there could certainly be synergies produced by Humana and Walgreens buying stakes in each other. But any arrangements that are less than a full merger or acquisition can include issues around commitment, agility, not-so-well aligned goals and objectives, and inability to make quick decisions, he notes.

The talks reportedly going on between Humana and Walgreens “could be a starting point for a long-term future merger,” Godla adds.

Radar On Market Access: CMS’s Second Swing at Part D Protected Classes Might Work

December 4, 2018

On Nov. 26, CMS issued a proposed rule that would let Medicare Advantage and Part D plans limit coverage of certain drugs in the six “protected classes,” which include antidepressants, antipsychotics, anticonvulsants, immunosuppressants for treatment of transplant rejection, antiretrovirals and antineoplastics, AIS Health reported.

On Nov. 26, CMS issued a proposed rule that would let Medicare Advantage and Part D plans limit coverage of certain drugs in the six “protected classes,” which include antidepressants, antipsychotics, anticonvulsants, immunosuppressants for treatment of transplant rejection, antiretrovirals and antineoplastics, AIS Health reported.

Under CMS’s Contract Year 2020 Medicare Advantage and Part D Drug Pricing Proposed Rule, plans would be able to:

  • Implement broader use of prior authorization and step therapy for protected-class drugs than is currently allowed;
  • Exclude a protected-class drug from a formulary if it represents only a new formulation of an existing drug (regardless of whether the existing drug is still on the market); and
  • Exclude a protected-class drug from a formulary if its price increases, relative to the price in a baseline month and year, beyond the rate of inflation.

This is not the first time an administration has tried to make changes in Part D’s protected classes. In 2014, the Obama administration proposed a rule that, among other Part D changes, would have effectively removed the protected status of antidepressants, antipsychotics and immunosuppressants. After facing backlash from a number of health care stakeholders and lawmakers from both major parties, CMS backed off the proposal.

But some industry experts tell AIS Health it’s possible that the Trump administration’s plan could have more success than its predecessor.

“The concerns around beneficiary access to drugs in those classes is going to be similar, the same or maybe even greater than the Obama-era proposal,” Miryam Frieder, a vice president at Avalere, tells AIS Health. However, “the environment is different enough that there is certainly the possibility that one could see this moving forward.”

Wall Street analysts viewed the protected-classes proposal as good news for managed care firms.

“We remain bullish” on MA and Part D players in light of the potential new regulations, Leerink analyst Ana Gupte advised investors. She cited UnitedHealth Group, Humana Inc. and WellCare Health Plans Inc. as particularly likely to benefit, as well as Aetna Inc., Anthem, Inc. and Cigna Corp.

Perspectives on Proposed Part D Change

November 29, 2018

If the Trump administration gets its way, Medicare Part D plan sponsors may at some point be on the hook for a greater share of costs once beneficiaries reach the catastrophic phase of coverage for prescription drugs. While America’s Health Insurance Plans (AHIP) is opposed to the idea, experts tellAIS Health that the time may be ripe for such a change.

If the Trump administration gets its way, Medicare Part D plan sponsors may at some point be on the hook for a greater share of costs once beneficiaries reach the catastrophic phase of coverage for prescription drugs. While America’s Health Insurance Plans (AHIP) is opposed to the idea, experts tellAIS Health that the time may be ripe for such a change.

Beneficiaries enter the catastrophic coverage phase when, as of 2018, their “true out-of-pocket costs” exceed $5,000. Once in that phase, beneficiaries pay no more than 5% of the total cost for their drugs, while the federal government pays 80% and the Part D plan pays 15%.

In its fiscal year 2019 budget proposal, the Trump administration suggests increasing plans’ share of costs for catastrophic coverage from 15% to 80% and shifting Medicare’s share from 80% to 20%. More recently, CMS Administrator Seema Verma said during an Oct. 18 event that the change is one area in which Part D could be “updated and modernized.”

Sean Creighton, a vice president in Avalere Health’s policy practice, says the change is probably needed because health plans will soon bear very little risk in the upper end of the Part D benefit.

AHIP, however, says it “strongly disagrees with the basic premise of this proposal — that incentives alone will produce such cost reductions.” It argues that “plans are already fully incentivized to negotiate vigorously for lower costs” and “drug companies are incentivized to provide price concessions only when leverage exists.”

Creighton says it is possible that shifting more risk to plans could result in higher premiums. But as long as the beneficiary cost-sharing in the catastrophic phase remains the same, the proposed policy change is likely to be “sort of invisible” to members, he adds.

On the other hand, increasing plans’ risk will likely cause them to step up some of their price-negotiation practices, such as excluding drugs from formularies, changing tier placement of drugs, and using prior authorization and step therapy. “So it may lead to a situation where access to particular drugs may become more restricted as the plans seek to contain costs,” Creighton says.