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Perspectives on New Solutions to Finance High-Cost Treatments

October 17, 2019

With concerns mounting about how health plan sponsors will pay for breakthrough treatments with ultra-high price tags, some major insurers are offering up new solutions aimed at easing that burden, AIS Health reported.

With concerns mounting about how health plan sponsors will pay for breakthrough treatments with ultra-high price tags, some major insurers are offering up new solutions aimed at easing that burden, AIS Health reported.

Cigna Corp. “appears at the forefront” of initiatives to cope with super-high-cost drugs, as Citi analyst Ralph Giacobbe puts it, given that the firm recently introduced a new solution that would help clients pay for and manage two gene therapies: Luxturna and Zolgensma.

Members whose plan sponsors pay a per-member per-month fee for Cigna’s new solution — called Embarc Benefit Protection — will pay nothing out of pocket for Zolgensma or Luxturna if they meet the clinical qualifications to be treated with one of those therapies.

Steve Wojcik, vice president of public policy for the National Business Group on Health, says that “employers are looking for solutions like that from their health plan partners and the PBMs.” However, while offerings like Cigna’s could help employers “smooth out the spikes in expenses,” businesses remain concerned about the overall costs of breakthrough therapies in the pipeline, he notes.

Besides Cigna, other major names in the insurance sector, such as CVS Health Corp.’s Aetna and Anthem, Inc., are working on their own solutions to help cope with high-cost therapies, including annuity-style payment arrangements and value-based contracts.

David Dross, managed pharmacy practice leader at the consulting firm Mercer, says some large, self-insured employers that are concerned about ultra-costly treatments are rethinking their decision to forgo stop-loss coverage.

However, issues can arise if clinical and financial management of a high-cost drug are done separately, he adds. In other words, a plan sponsor may determine that a member qualifies for a high-cost drug, but the stop-loss carrier that’s taking on the financial responsibility may not agree.

Radar On Market Access: Would Drug Pricing Legislation Impact Innovation?

October 17, 2019

Many innovative new therapies are coming onto the market, but they also are launching with increasingly higher price tags, even as lawmakers and regulators launch a flurry of activity aimed at bringing down drug prices. Some industry experts caution that a few of the bills, if passed, could endanger the research and development efforts around these novel drugs, while others question that hypothesis, AIS Health reported.

Many innovative new therapies are coming onto the market, but they also are launching with increasingly higher price tags, even as lawmakers and regulators launch a flurry of activity aimed at bringing down drug prices. Some industry experts caution that a few of the bills, if passed, could endanger the research and development efforts around these novel drugs, while others question that hypothesis, AIS Health reported.

One of the proposals is the International Pricing Index, an effort by HHS to bring payments for Medicare Part B closer to what 16 other “developed economies” pay for these drugs. The Senate’s Prescription Drug Pricing Reduction Act of 2019 proposes multiple changes to Medicare Part B and Part D, as well as Medicaid. And the House’s Lower Drug Costs Now Act proposes, among other things, requiring HHS to negotiate the prices of up to 250 drugs in Medicare without competitors. Companies not coming to an agreement would be subject to financial penalties.

Drugmakers have vociferously pushed back on many of the proposals, with one of the arguments against them being that the efforts would have a chilling effect on pharma R&D.

“Empirical evidence” exists to support the idea that “lower spending on pharmaceuticals will lead to lower R&D spending and lower yield of innovative drugs,” says Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates. But “there isn’t enough evidence either way” to say whether “there aren’t policies besides spending that can impact innovation.”

“Additional patent protections and favorable tax treatment of R&D expenditures for drugs designated to treat ‘orphan’ indications appear have resulted in a large push among manufacturers and investors to bring those products to market,” he notes.

According to Lisa Kennedy, Ph.D., chief economist and managing principal at Innopiphany LLC, “the biopharmaceutical industry is responsible for approximately 70% of all innovation within health care. Price fixing of pharmaceuticals has been shown in several studies to have a knock-on effect on innovation.”

She also asserts that oncology, one of the most productive and exciting areas of innovation in the biopharmaceutical industry, could be hit particularly hard.

Radar On Market Access: Study Shows Growing IL-17 Use in Psoriasis

October 15, 2019

For many years, the psoriasis treatment landscape was dominated by tumor necrosis factor (TNF) inhibitors. But with the FDA’s approval of three interleukin-17 (IL-17) inhibitors — as well as other drugs with different mechanisms of action — for the condition, those therapies are becoming more common among treatment regimens, AIS Health reported.

For many years, the psoriasis treatment landscape was dominated by tumor necrosis factor (TNF) inhibitors. But with the FDA’s approval of three interleukin-17 (IL-17) inhibitors — as well as other drugs with different mechanisms of action — for the condition, those therapies are becoming more common among treatment regimens, AIS Health reported.

The first IL-17 inhibitor on the U.S. market was Cosentyx (secukinumab) from Novartis Pharmaceuticals Corp., which launched in 2015. The next therapy was Taltz (ixekizumab) from Eli Lilly and Co., and then on Feb. 15, 2017, the agency approved Siliq (brodalumab) from Ortho Dermatologics.

An AllianceRx Walgreens Prime study sampled 5,215 members who started on an IL-17 from January 2016 through December 2017. The study showed that 2,218, or 42.5%, switched from a prior biologic, while 2,997, or 57.5%, started on an IL-17 as their first psoriasis biologic. Among those who started their biologic regimens on an IL-17 inhibitor, 2,266 started on Cosentyx, followed by 725 who initiated on Taltz and six who started on Siliq.

Researchers also examined 180-day adherence outcomes among members who switched to an IL-17 inhibitor from another biologic, as determined by proportion of days covered (PDC). The mean PDC increase after moving to an IL-17 was 6.4%.

Among those moving to an IL-17, 45.7% said their outcomes were better, 26.5% said they were the same, 5.3% said they were worse, and 22.6% said they were inconsistent.

According to Renee Baiano, Pharm.D., clinical program manager at AllianceRx Walgreens Prime and the lead author of the poster, the main takeaway for payers is that “by [the] last quarter of 2017, IL-17 inhibitors may have gained clinical acceptance in the treatment of psoriasis, given the increase in patients prescribed as their first biologic.” She adds that “it is important for payers to be aware they may see more of their members being prescribed IL-17 inhibitors and will need to determine the appropriate placement of these newer agents within their formulary.”

Radar On Market Access: PhRMA, Conservatives Criticize Pelosi Drug Pricing Legislation

October 10, 2019

Although there is bipartisan support for drug pricing reform and recent bills introduced in the House and the Senate share some concepts, conservatives and pharmaceutical manufacturers have found plenty to dislike about the drug pricing legislation unveiled in September by House Speaker Nancy Pelosi (D-Calif.), AIS Health reported.

Although there is bipartisan support for drug pricing reform and recent bills introduced in the House and the Senate share some concepts, conservatives and pharmaceutical manufacturers have found plenty to dislike about the drug pricing legislation unveiled in September by House Speaker Nancy Pelosi (D-Calif.), AIS Health reported.

In addition to restructuring the Part D benefit to include an out-of-pocket cap, the Lower Drug Costs Now Act (H.R. 3) would allow the HHS secretary to negotiate drug prices for at least 250 drugs where there is no effective competition. Manufacturers would be subject to certain transparency requirements and a “noncompliance fee.” Moreover, the bill would require that the negotiated price should be no more than 1.2 times the weighted average of the price in six other countries.

Speaking at AHIP’s 2019 National Conference on Medicare, held Sept. 23-24 in Washington, D.C., American Action Forum President Douglas Holtz-Eakin called H.R. 3 a “terrible bill” and said the structure of an upper limit and a noncompliance penalty is not negotiation but is “price fixing and extortion.” He also argued that its proposed inflation rebate would only incentivize manufacturers to create high launch prices.

Also speaking at the conference, PhRMA Senior Vice President for Policy and Research Jennifer Bryant said that while Pelosi’s bill is being presented as a “benign and fairly incremental approach,” the proposed structure is “not actually one of negotiation at all and is about tying prices in the U.S. to prices internationally.” Moreover, she challenged AHIP, which released a statement in support of the Pelosi bill, to make a case for an “alternative that reduces costs through competition.”

Meanwhile, Pelosi advisor Wendell Primus made a last-minute appearance at the conference to outline the bill and express the speaker’s confidence that it could come to a Senate vote by the end of October.

Radar On Market Access: CMS Projects Record-High Medicare Advantage Enrollment in 2020

October 8, 2019

2020 is shaping up to be another competitive year for the Medicare Advantage program, which will feature an additional 600 plan choices and a continued decline in the average monthly premium, AIS Health reported. With its annual release of the so-called landscape files for the MA and Part D programs, CMS on Sept. 24 said it expects MA enrollment to reach an all-time high of 24.4 million in 2020, up 10% from the current enrollment of 22.2 million.

2020 is shaping up to be another competitive year for the Medicare Advantage program, which will feature an additional 600 plan choices and a continued decline in the average monthly premium, AIS Health reported. With its annual release of the so-called landscape files for the MA and Part D programs, CMS on Sept. 24 said it expects MA enrollment to reach an all-time high of 24.4 million in 2020, up 10% from the current enrollment of 22.2 million.

For 2020, the average monthly MA plan premium will drop by 14% to an estimated $23, the lowest average monthly premium since 2007. As the Affordable Care Act health insurer fee (HIF) returns in 2020, CMS’s bullish enrollment outlook “indicates most plans are prioritizing stability of benefits and enrollment,” observed securities analyst Michael Newshel in a Sept. 24 research note from Evercore ISI.

According to data released alongside the 2020 MA and Part D landscape files, beneficiaries will have an average number of 39 plan choices per county, CMS estimated. Moreover, CMS said there are about 1,200 more MA plans operating in 2020 than in 2018.

According to estimates from Citi Research, there will also be a substantial rise in the number of plans with a $0 monthly premium, with Centene Corp. showing the greatest increase (56%) in $0 premium offerings.

Meanwhile, the Special Needs Plan (SNP) market will continue to expand. According to estimates from Chicago-based consulting firm Clear View Solutions, LLC, there are 171 net new SNP plan IDs, up from 60 net new plans in 2019. In addition, the number of stand-alone Prescription Drug Plan offerings will rise from 1,369 in 2019 to 1,433 next year.

Medicare beneficiaries may begin perusing their 2020 coverage options on Oct. 1. Open enrollment begins on Oct. 15 and ends on Dec. 7.

Perspectives on Changes to Addiction Treatment Privacy Rules

October 3, 2019

A recent federal proposal — which would loosen privacy rules surrounding substance use disorder (SUD) treatment — is being applauded by health insurer trade groups. But some advocates are worried about potential harms to patients, AIS Health reported.

A recent federal proposal — which would loosen privacy rules surrounding substance use disorder (SUD) treatment — is being applauded by health insurer trade groups. But some advocates are worried about potential harms to patients, AIS Health reported.

At the center of the debate is legislation enacted in the 1970s and the subsequent regulations implementing that law, known as 42 CFR Part 2, which was designed to protect the confidentiality of SUD patient records created by federally funded treatment programs. Under the proposed changes to 42 CFR Part 2, opioid treatment programs would be able to enroll in state prescription drug monitoring programs and submit the dispensing data for controlled substances consistent with applicable state laws. SUD patients also would be able to consent to disclosure of their Part 2 treatment records to an entity, without having to name a specific person.

“At the highest level, ACHP does see the proposed rule as a positive development,” says Connie Hwang, M.D., chief medical officer of the Alliance of Community Health Plans. When an individual is undergoing treatment for SUD, “you want to make sure that all the other groups engaged in the ongoing care are aware and don’t inadvertently interfere with that or put the patient at greater danger,” she adds.

However, not everyone shares that view.

Paul Samuels, president and director of the advocacy group, said in a news release, “while the Legal Action Center strongly supports the need for coordinated flow of health information between providers, it must be done so with patient consent in disclosure and re-disclosure,.

The current privacy rules are “a necessary protection for individuals who would otherwise be susceptible to a multitude of detrimental consequences if their SUD information was disclosed without their permission to potential employers, housing providers, law enforcement and more,” Samuels added.