Member: Spotlight on MMIT Solutions

CVS Health, Cigna Make the Case for Greater PBM-Insurer Integration

November 25, 2019

Cigna Corp. and CVS Health Corp. — organizations that both recently combined a PBM and a health insurance business — are striving to prove to investors that they’re seeing valuable benefits from such vertical consolidation.

Executives from CVS, which purchased Aetna Inc. in late 2018, during the company’s third-quarter 2019 earnings call on Nov. 6 said that having such a diversified enterprise is helping it win over PBM clients for its Caremark division.

Cigna Corp. and CVS Health Corp. — organizations that both recently combined a PBM and a health insurance business — are striving to prove to investors that they’re seeing valuable benefits from such vertical consolidation.

Executives from CVS, which purchased Aetna Inc. in late 2018, during the company’s third-quarter 2019 earnings call on Nov. 6 said that having such a diversified enterprise is helping it win over PBM clients for its Caremark division.

For the 2020 PBM selling season — which runs from March to July — “our focus was to go to market with a more integrated medical-pharmacy offering,” said Karen Lynch, CVS Health executive vice president and Aetna president, according to a transcript of the call from Thomson Reuters. To that end, she noted that Caremark saw “increased traction in overall pharmacy penetration” for its employer-sponsored business during the 2020 selling season, particularly among Aetna’s existing medical-benefits clients.

While CVS has won $4.9 billion in gross new business during the 2020 PBM selling season — up from the $3.8 billion that it previously projected — “net new business is projected to be down -$6.4B overall (vs. -$7.4B previously),” due to the loss of Centene Corp.’s business and other non-renewals, Citi Research analyst Ralph Giacobbe wrote in a Nov. 6 note to investors.

Looking ahead to the 2021 selling season, “I think we’re seeing a fair amount of activity and pipeline build,” Lynch said.

Caremark President and CVS Health Executive Vice President Derica Rice said Caremark is introducing its HealthHUBs to both its health plan and employer clients, and it is seeing a lot of interest. In fact, two of the PBM’s health plan clients are now working with CVS on pilots related to its HealthHUBs. In response to a follow-up inquiry from AIS Health, CVS declined to reveal which health plans are involved in the pilots.

Meanwhile, “in the pharmacy space, we’re excited about what our pharmacists are doing in partnership with data coming to us from the Aetna business unit,” which helps the company identify patients who need the most help managing chronic conditions, Kevin Hourican, executive vice president of CVS Health and president of CVS Pharmacy, said during the call.

CVS’s PBM segment generated total revenues of $36.01 billion in the third quarter, a 6.4% year-over-year increase that also beat the Wall Street consensus estimate of $34.85 billion, Giacobbe noted. “Top-line growth was driven by brand drug price inflation as well as increased total pharmacy claims volume, but was partially offset by continued price compression and an increased generic dispensing rate,” he wrote.

Express Scripts Boosts Cigna Earnings

Cigna, which purchased Express Scripts Holding Co. in 2018, said a major driver of its better-than-expected quarterly financial results was the performance of its health services segment, which includes its PBM business. That book of business reported pretax operating earnings of $1.4 billion, which beat Wall Street’s consensus of $1.36 billion and far surpassed the $67 million it earned in the third quarter of 2018 — before Cigna’s purchase of Express Scripts closed.

In its earnings release, Cigna said the segment’s third-quarter 2019 results were thanks to “organic growth in adjusted pharmacy script volumes, strong performance in specialty pharmacy care and effective execution of supply chain initiatives.” On an adjusted basis, Cigna’s health services division fulfilled 312 million prescriptions in the third quarter, up from 294 million in the prior quarter, and the firm now expects its adjusted pharmacy prescription volume to grow by 25 million to 35 million in 2020.

On the specialty pharmacy front, Cigna is “quite pleased” with the positioning, ongoing innovation and strength of Express Scripts’ Accredo business, CEO David Cordani said during the company’s Oct. 31 earnings call, according to a transcript from Seeking Alpha. The impact of drug launches this year as well as the increasing use of existing therapies that Accredo manages have helped drive the growth of the specialty business, added Cigna Chief Financial Officer Eric Palmer.

Cordani also highlighted new programs launched by the combined Cigna/Express Scripts, such as the Embarc benefit protection program, which allows clients to pay a per-month fee to help finance two costly gene therapies if a member ever needs them.

ESI Deal Still Spells Uncertainty

Wall Street still holds some concerns, however. Giacobbe pointed out that Cigna’s Express Scripts deal still “brings integration risk as well as uncertainty around client retention as well as general headline risk given the focus on drug pricing and evolving PBM model.”

During Cigna’s earnings call, one analyst asked Cordani about how he thinks the PBM legislative and regulatory environment will play out — particularly since the Trump administration abandoned its proposal to remake the prescription drug rebate structure. But Cordani demurred, saying the conversation should be about how the market is seeking more value and affordability when it comes to prescription drugs.

“We expect to continue to see an evolving regulatory environment, but equally or more important, a more accelerated, evolving innovation environment and that is what we are driving towards,” he said.

For its part, Cigna is helping to increase affordability by offering innovations such as its Patient Assurance Program, which allows members in participating plans to pay no more than $25 for a 30-day supply of insulin, Cordani added.

by Leslie Small

 

 

Payers Say They Will Use New MS Drugs to Get Better Deals

by Angela Maas

When the FDA approved Biogen Inc. and Alkermes plc’s multiple sclerosis (MS) capsule, Vumerity (diroximel fumarate), in late October, it joined a crowded therapeutic class. According to a Zitter Insights survey, most payers will use newer oral and generic products to obtain larger discounts for intravenous (IV) and subcutaneous (SC) MS agents.

Vumerity is indicated for the treatment of relapsing forms of MS, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. The FDA approved the treatment through a new drug application under the 505(b)(2) pathway, with reference drug Tecfidera (dimethyl fumarate) from Biogen. It is the third MS drug approved this year following the March approvals of Novartis Pharmaceuticals Corp.’s Mayzent (siponimod) and Mavenclad (cladribine) from EMD Serono, a unit of Merck KGaA. Both are tablets.

The class also has multiple generic versions of Copaxone (glatiramer acetate) from Teva Pharmaceutical Industries Ltd. The pipeline also includes generics of Novartis’ Gilenya (fingolimod) and Biogen’s Tecfidera (dimethyl fumarate).

For the Managed Care Biologics and Injectables Index: Q1 2019, Zitter surveyed pharmacy and therapeutics (P&T) committee members who work for 50 commercial payers with 174.1 million covered lives between Feb. 22, 2019, and April 5, 2019. When asked how their plans expected to respond to the availability of new oral and generic MS therapies, 72% of respondents said they were more likely than unlikely or significantly likely to use the new products as leverage to get better discounts and rebates from manufacturers for IV and SC drugs (see chart below).

In addition, 17% said they were more likely than unlikely or significantly likely to put the oral products in a separate market basket to be managed differently than the other treatments. Of the payers citing this response, the preferred oral therapies included Aubagio (teriflunomide) from Sanofi Genzyme, a Genzyme Corp. unit; Gilenya; Mavenclad; and Tecfidera, with one payer mentioning Vumerity.

Asked whether they would create three market baskets, splitting up oral, IV and SC therapies, 41% of respondents said they were more unlikely than likely or not at all likely to do this.

 

Reality Check: Uveitis

 

Coverage


Pharmacy Benefit

Under the pharmacy benefit, almost 45% of the lives under commercial formularies are covered with utilization management restrictions. Around 24% and 33% of the lives under commercial and health exchange formularies, respectively, are not covered for at least one of the drugs.


Medical Benefit

Under the medical benefit, about 19% of the lives under commercial policies are covered with utilization management restrictions. More than 45% of the lives under Medicare policies have access to the medications without restrictions.

 

 

Trends From AIS Health


FDA Grants Orphan Drug Designation

In June 2019, the FDA granted orphan drug designation to Palatin Technologies, Inc.’s PL-8177 for the treatment of noninfectious intermediate, posterior, pan and chronic anterior uveitis. Palatin has conducted a single and multiple ascending-dose Phase I study with PL-8177 for ulcerative colitis under an investigational new drug (IND) application. The company says it plans to file an IND application for noninfectious uveitis with the FDA in 2019.

Via PR Newswire


Actemra Shows Efficacy

Intravenous Actemra (tocilizumab) showed efficacy in noninfectious uveitis, according to data from the STOP-Uveitis study presented at the 2019 American Academy of Ophthalmology meeting. The researchers randomly assigned patients with noninfectious uveitis to receive 4 mg/ kg or 8 mg/kg of IV tocilizumab every four weeks for six months. The study shows that 83.8% of the eyes they studied demonstrated a positive response.

Via Healio


Biologics Are Becoming First-Line Choice

Biologic medications are becoming the first-line choice for treating non-infectious uveitis, while they were originally considered second- or third-line choices, according to David K. Scales, M.D., who practices at Retina and Uveitis Consultants of Texas. There is also a need for immunomodulating drugs in the management of this class, he adds.

Via Healio

 

Key Findings


Market Events Drive Changes

In June 2019, the FDA granted orphan drug designation to Palatin Technologies, Inc.’s PL-8177 for the treatment of noninfectious intermediate, posterior, pan and chronic anterior uveitis. New biosimilars for Johnson & Johnson unit Janssen Biotech, Inc.’s Remicade (infliximab) were launched in 2016 and 2017, but will not have this indication because the biosimilars take on only the FDAlabeled indications of the reference product.

Competitive Landscape

The uveitis market is characterized by a small selection of marketed drug options: corticosteroid therapies, immunosuppressive therapies and biologics. Historically, corticosteroid therapies have made up the bulk of the market. Currently, only one targeted therapy is approved for this use: AbbVie Inc.’s Humira (adalimumab). The late-stage uveitis pipeline is composed of Santen Pharmaceutical Co., Ltd.’s Opsiria (sirolimus) and Clearside Biomedical, Inc.’s CLS-TA, which are expected to address some unmet needs. These new drugs will expand the options available to treat uveitis patients and contribute to overall treatment options by offering novel treatment mechanisms, including new drug delivery routes and novel, noncorticosteroid drug molecules.

Medical and Pharmacy Benefit Implications

Most drugs process through the medical benefit, but some payers push the products through specialty pharmacies. Some treatments are now available in self-injectable form and can be obtained via the pharmacy benefit. Triesence may process through the pharmacy benefit.

 

 

Plans Stick With Parkinson’s Generics, Eye New Gene Therapies in the Pipeline

November 11, 2019

Although three new drugs for Parkinson’s disease have been approved over the last year, plans generally are sticking with the drugs they’ve included on formularies for several years, most of which are generic, experts say.

That may change in the long term as new gene therapies that currently are in development are approved and come online (see box, p. 4). But none of those potential new treatments are close to market right now,

Although three new drugs for Parkinson’s disease have been approved over the last year, plans generally are sticking with the drugs they’ve included on formularies for several years, most of which are generic, experts say.

That may change in the long term as new gene therapies that currently are in development are approved and come online (see box, p. 4). But none of those potential new treatments are close to market right now, says Mesfin Tegenu, R.Ph., president of PerformRx.

“Many commonly used therapies for Parkinson’s disease — carbidopa-levodopa, MAO-Bs, dopamine agonists — have available generics, which on most plans would be considered formulary options, or one generic product within each class would be selected as formulary,” Tegenu tells AIS Health.

The FDA in August approved Kyowa Kirin, Inc.’s Nourianz (istradefylline) tablets as an add-on treatment to levodopa/carbidopa in adult patients with Parkinson’s disease experiencing motor fluctuations, known as “off” episodes. In February, the FDA approved Osmotica Pharmaceutical US LLC’s Osmolex ER (amantadine) for the treatment of Parkinson’s disease. And in late December, the FDA approved Accorda Therapeutics’ Inbrija (levodopa inhalation powder) for intermittent treatment of off episodes in people with Parkinson’s disease taking carbidopa/levodopa.

Still, plans are stocking their formularies (see graphic below) with less expensive generic medications, of which there are numerous options. Parkinson’s disease treatment generally progresses through drugs that have a moderate effect but fewer side effects to drugs that are more effective, but have more significant side effects, Tegenu says.

“Choice of which pharmacotherapy to use initially is individualized based on the characteristics of the patient, the disease and the drugs,” he says. “There is no single preferred therapy, and trade-offs are common. Optimal care requires a flexible trial- and-error approach. Further treatment additions and changes are based on patient symptoms and response.”

Tegenu says there are four main classes of agents for Parkinson’s disease:

✦ Monoamine oxidase-B (MAO-B) inhibitors, which include selegiline and the brand name product Zelapar (selegiline hydrochloride; formulated to dissolve by mouth for people who can’t swallow pills). These drugs block an enzyme that breaks down levodopa. According to Tegenu, they have modest effects but are well tolerated and convenient. “They’re limited to use in patients with mild symptoms,” he says.

✦ Amantadine, which may cause the brain to release more dopamine. This drug also has modest effects, Tegenu says, but is well tolerated. It’s typically used in early Parkinson’s.

✦ Dopamine agonists such as pramipexole and ropinirole. These have “immediate potency for improving motor symptoms [and] lower risk of motor complications than levodopa,” Tegenu says, but they also carry a higher risk of somnolence, hallucinations and impulse control disorders. They’re not well-tolerated in older adults and those with cognitive dysfunction, he says.

✦ Levodopa, which is “the most effective agent for control of motor symptoms, but is less convenient and requires more frequent dosing,” Tegenu says. It also carries the highest risk for motor complications, he says.

April Kunze, Pharm.D., senior director, clinical formulary development and trend management strategy at Prime Therapeutics LLC, notes that a fifth class of drugs — anticholinergics — is used to control tremor in Parkinson’s patients.

“All of these drug classes have medications that are available generically,” Kunze tells AIS Health. “In general, the choice of treatment of Parkinson’s disease depends on the patient and their disease state. Each drug has its trade-off.”

 


MMIT’s Take: Parkinson’s Disease

“The treatment for Parkinson’s Disease is based on the patient’s specific symptoms,” Tracy Bilardo, a client success lead at MMIT, tells AIS Health. “Treatment regimen typically involves levodopa [a dopamine promoter] in combination with other agents to treat ‘off’ episodes,” motor fluctuations that occur in patients between levodopa doses. Bilardo says the Parkinson’s market is largely dominated by generic drugs, as many of the disease’s therapeutic options are long-tenured.

However, she adds that “multiple new branded options have become available in recent years with differing modes of administration,” and notes that the market has a full pipeline, so market dynamics could shift in the near future.

“Branded treatment options are primarily covered on the pharmacy benefit, with Apokyn and Duopa straddling both pharmacy and medical benefits,” Bilardo says, adding that Medicare is an exception, with most Medicare plans driving US WorldMeds’ Apokyn pen to the pharmacy benefit. “Apokyn and Neupro achieve the best preferred access across all lines of business. The Medicare channel provides multiple modes of administration on preferred tiers with Rytary, Apokyn and Neupro.” Bilardo adds that oral medications dominate physician prescribing patterns despite evidence that injectables, such as Apokyn, and transdermal patches, such as UCB’s Neupro, show certain advantages. “Physician behavior and coverage are slower to adopt compared to oral agents,” she says.

Bilardo says step therapy is rare in the treatment of Parkinson’s, and restrictive management strategies are unusual. “Since Parkinson’s treatment revolves around patient symptoms and ‘off’ episodes, many payers are reluctant to implement strict utilization management tactics such as step therapy to limit utilization of branded agents,” she says. “When a step is implemented it is through a generic [or generics].”

Bilardo adds that prior authorization use requires diagnosis and clinical documentation. “Commercial and Medicaid business lines are more likely to implement a step through a generic, [while] Medicare relies more on copay differentials to drive utilization away from branded agents.”


 

All three Parkinson’s drugs approved in the last year —Nourianz, Osmolex ER and Inbrija — are used to treat the motor complications that are a known effect of levodopa treatment, Kunze says. Another drug, Xadago (safinamide), which Newron Pharmaceuticals SpA licensed to US WorldMeds, LLC, was approved in 2017, and is also used to treat off episodes.

Of those four drugs, only Osmolex ER and Xadago are for sale currently in the U.S. For Osmolex ER, 30 tablets cost between $453 and $490, depending on the pharmacy’s discount. Xadago typically sells for a discounted price of around $781.

Inbrija, meanwhile, is expected to cost around $1,000 for a supply of 60 inhalation capsules. Kyowa Kirin hasn’t yet announced a price for Nourianz.

Plans generally aren’t covering Xadago and they aren’t expected to cover Inbrija, Tegenu says. “Members would be able to request an exception through the prior authorization process for these products,” he adds.

For example, Blue Cross Blue Shield of Arizona states in its pharmacy coverage guidelines that it will cover Xadago only if the patient first has trialed drugs from three different classes: pramipexole or ropinirole; selegiline or rasagiline mesylate; and entacapone or tolcapone. Xadago can only be used as an adjunctive treatment to levodopa and carbidopa, according to the coverage document.

UnitedHealthcare, meanwhile, states that Xadago will be approved to treat off episodes based on a history of failure, contraindication or intolerance to both rasagiline and selegiline.

For Osmolex ER, plans generally require failure on trials of immediate-release amantadine.

For example, Centene Corp. subsidiary Health Net states in a clinical policy document for its commercial and Medicaid members that it will consider Osmolex ER in patients with a diagnosis of dyskinesia who are receiving levodopa-based therapy, and who fail a two-week trial of immediate release amantadine, or whose physicians can provide medical justification that supports the inability to continue use of immediate-release amantadine, such as contradictions to excipients.

Gene Therapies in the Pipeline

Both Tegenu and Kunze say gene therapies eventually may change the way Parkinson’s disease is treated. Gene therapies that would alter the disease paradigm are several years from approval right now, although Kunze notes that four potential therapies are in Phase II trials.

They are:

✦ Voyager Therapeutics’ VY-AADC-01, which is designed to put the AADC enzyme into brain cells where it can convert levodopa to dopamine. A Phase III trial (RESTORE-2) is expected in the first half of 2020, Kunze says.

✦ MeiraGTx Holdings plc’s AAV-GAD therapy, in which glutamic acid decarboxylase (GAD) is delivered into the subthalamic nucleus. AAV-GAD has completed a Phase II trial.

✦ Axovant Gene Therapies, Ltd.’s AXO-Lenti-PD, which is designed to deliver three genes via a single lentiviral vector to encode a set of critical enzymes needed for dopamine synthesis. In June, Axovant reported six-month data from a Phase I/II trial.

✦ Prevail Therapeutics’ PR001, a single-dose gene therapy for Parkinson’s patients who have GBA1 mutations and neuronopathic Gaucher Disease. Prevail said Sept. 10 that it was in the process of activating clinical sites for its Phase I/II trial and expects to begin dosing patients later this year.

“Although it may be a couple of years before approval from the FDA, gene therapy for Parkinson’s disease is being researched,” Kunze says.

by Jane Anderson

 

Walgreens Joins Centene in Pact With Cloud-Based PBM RxAdvance

A recently announced partnership between Centene Corp., Walgreen Co. and the technology-focused PBM RxAdvance promises “an innovative model for pharmacy management that aims to increase transparency, enhance customer experience and ultimately result in better health outcomes at lower costs.”

While retail pharmacy-PBM-insurer combinations are “going to be par for the course” now, what makes this move unique is the fact that Centene is taking that model beyond the commercial space and into Medicaid, says Ashraf Shehata, a principal in KPMG’s health care life sciences advisory practice and the firm’s Global Healthcare Center of Excellence.

Indeed, the partnership between Centene, RxAdvance and Walgreens “addresses the growing need for innovative approaches to pharmacy benefits management, particularly in Medicaid,” Centene Chairman and CEO Michael Neidorff said during the insurer’s third-quarter earnings call on Oct. 22.

Neidorff said his company chose to deepen its existing partnership with Walgreens because its business niche aligns well with Centene’s.

“There are various outlets in pharmacy, and Walgreens has done a particularly good job in urban areas and is recognized for it in the inner cities, where we have a large population,” he said. “So working closely with them is an added plus while still maintaining relationships with the other large retail outlets.”

For its part, Walgreens expects that the partnership will “empower our pharmacists to make critical decisions at the point of sale to help improve adherence and also to reduce avoidable medical costs,” Stefano Pessina, executive vice chairman and CEO of Walgreens Boots Alliance, Inc., said in a press release.

Platform ‘Key’ to Patient-Centered Care

In Shehata’s view, the cloud-based PBM platform that all three organizations will use is key to the alliance, since it eventually will allow advanced point-of-care capabilities for pharmacists.

“The idea would be to use that platform to evolve it even further,” he notes. “This is an area where we’re going to start to see more and more technological enhancements,” he says, which is key to “getting to a patient-centered, member-centered design.”

The new partnership builds on Centene’s initial investment in RxAdvance back in 2018. The insurer has now increased its stake in RxAdvance, and Walgreens has “made a small investment” in the firm, which touts a cloud-based PBM platform aimed at promoting transparency, reducing costs and improving customer experience and health outcomes.

PBM platform aimed at promoting transparency, reducing costs and improving customer experience and health outcomes.

During Centene’s Oct. 22 earnings call, Jeffrey Schwaneke, executive vice president and chief financial officer, declined to say exactly how much the insurer increased its stake in RxAdvance.

“When we had made the RxAdvance investment initially, we had contemplated a few different steps along the way, so I think this is really kind of the one-year step,” he said. “Without getting into a lot of the specifics, we increased the nominal amount, but I think it’s representative of momentum and the trajectory of the work we’re doing together.”

While the companies’ press release offers few details about what exactly the new partnership will entail, RxAdvance’s overall business strategy is to streamline and integrate the often-fragmented platforms that PBMs use to process pharmacy, medical, laboratory and other data, the PBM’s CEO, Ravi Ika, previously told AIS Health.

The companies do say that they’ve already identified initial markets in which to deploy the model and that they plan to offer it to “other large payers.”

Asked which payers might be interested in such a model, Shehata points to Blue Cross Blue Shield plans that don’t contract with the Blues-owned PBM Prime Therapeutics, LLC. The products emerging from the partnership also could be of interest to provider-owned health plans, he notes.

Still, real-time integrated capabilities between the pharmacist, plan and PBM ultimately are “something you’re going to see at every PBM,” he says. The partnership between Centene, Walgreens and RxAdvance places the alliance at “parity” when compared to other major PBMs, he adds.

During Centene’s earnings call, one analyst inquired how states’ moves to change their relationship with PBMs might impact the insurer’s business and its RxAdvance partnership. Some states, like Michigan, are aiming to move the management of Medicaid enrollees’ pharmacy benefits from managed care back to the state, while states such as Ohio have been pushing PBMs to move to a more transparent pricing model.

“The states want transparency, and we agree with that,” Neidorff said. “I think RxAdvance will only enhance that opportunity — and some of the systems they have and some of that information moves us in that direction at an accelerated rate.”

by Leslie Small

 

CVS, Express Scripts, OptumRx Unveil 2020 Formulary Changes and Exclusions

October 28, 2019

The largest PBMs are taking very different approaches to building their 2020 formularies, including maximizing rebates, focusing on multi-source brand exclusions and removing products that have experienced hyperinflation, benefits consultants say.

Express Scripts Holding Co. says it will exclude more than 100 brand medications in its 2020 National Preferred Formulary. CVS Caremark, which says it’s focusing on brands that have experienced hyperinflation, will exclude more than 30 medications plus three continuous glucose monitors.

The largest PBMs are taking very different approaches to building their 2020 formularies, including maximizing rebates, focusing on multi-source brand exclusions and removing products that have experienced hyperinflation, benefits consultants say.

Express Scripts Holding Co. says it will exclude more than 100 brand medications in its 2020 National Preferred Formulary. CVS Caremark, which says it’s focusing on brands that have experienced hyperinflation, will exclude more than 30 medications plus three continuous glucose monitors. And UnitedHealth Group PBM OptumRx, which discussed changes to its formulary in a recent webinar, will exclude several popular medications for asthma, fibromyalgia and contraception.

“We’re finding big differentiators from formulary to formulary,” Brian Anderson, a principal with Milliman, Inc., tells AIS Health. “Some PBMs focus on low cost and some PBMs focus on low net cost, and the low net cost is the high rebate strategy — you pay more for a drug, but you get a higher rebate. In addition, another factor could be aligning their purchasing strategies for their pharmacies to the formulary alignment to ensure financial success across the board.”

“Multi-source brand exclusions are a big item,” Anderson says. “In the past they would use tiers. Now they [the brands] are excluded. They’re taking a harder-line approach on these items — all PBMs are doing that.”

For example, as part of the push to focus on multi-source brand exclusions, OptumRx excluded the popular medication Lyrica (pregabalin), used for fibromyalgia, nerve and muscle pain. It will substitute generic versions, Michael Hunter, Pharm. D., pharmacy management consultant at Milliman, Inc., tells AIS Health.

Changes to formulary status for drugs that are taken by millions of people can have an outsized effect, Anderson says. For example, OptumRx will exclude AbbVie Inc.’s branded thyroid replacement hormone Synthroid (levothyroxine) beginning in 2020.

“Synthroid is going to be one of the disruptors,” Anderson says. “PBMs typically cover multiple iterations” of thyroid hormone replacement, he says, but OptumRx is “now clarifying [coverage] and excluding Synthroid.” For 2019, Synthroid had been a Tier 3 formulary drug.

“This was one of the few [branded drugs] left that hadn’t been touched,” Hunter says. “From a pharmaceutical perspective, I know a lot of physicians and patients prefer the brand. The question is, will physicians and patients still be able to get medical exceptions?”

CVS Takes On ‘Hyperinflated’ Drugs

CVS Caremark says it’s focusing on blunting the impact of hyperinflated drugs, which it defines as “medications that are exponentially more expensive than readily available lower-cost alternatives, and whose price is not supported by evidence of greater clinical efficacy.” The PBM notes that more than 3,400 drugs boosted their prices in the first six months of 2019, and the average increase was five times the rate of inflation.

In 2018, CVS Caremark says, it was able to keep the impact of price growth to 3.1% despite drug price inflation of more than 25%. It achieved this by applying strategies such as hyperinflation drug removals, the company says.

In April, the PBM removed 1,000 mg metformin extended release tablets from its formulary. CVS Caremark says that medication cost an average of $617.17 for a 30-day supply, while substituting immediate release metformin costs $3.80 on average for a 30-day supply. This saves payers $613 per month, the PBM says.

CVS Caremark also removed chlorzoxazone tabs (250 mg), a muscle relaxant, and substituted cyclobenzaprine. Since chlorzoxazone costs $2,902.64 on average for a 30-day supply and cyclobenzaprine costs $1.76, the average savings from this strategy is $2,901, according to the company.

Drug Removals Cut Client Costs

“In 2018, clients aligned with our template formularies with drug removals spent $88.30 on average per 30-day supply compared to $102.58 for those on formularies without drug removals,” CVS Caremark says.

CVS Caremark’s hyperinflation strategy targets “generics that have significant price increases, potentially due to a limited supply chain,” Hunter says.

Hunter notes that PBMs evaluate their formularies each quarter, so “although there’s a lot of activity around the first of the year, they’re continually making adjustments and exclusions.” He adds that “these exclusion lists have been in place for several years now,” and payers have grown to anticipate them and expect them. “Some appreciate the due diligence of tight management,” he says, while others may get some pushback from plan members.

It’s also not unusual for PBMs to add back medications that they’ve removed, Anderson notes. In some cases, these decisions may be influenced by negative reactions they get from payers and members, he says. “You have to look at the disruption in addition to the savings, and make sure the performance aligns with the contract.”

Anderson adds, “the formulary historically is based on clinical effectiveness, but they’re now aligning clinical effectiveness with financials.” This can involve various financial strategies, including rebates and mail order incentives, he says.

Still, payers are more focused on their specialty pharmaceutical spending — and its growth rate — than they are on their non-specialty formularies, Hunter says. Specialty pharmacy costs are taking up a rapidly increasing percentage of overall prescription budgets, and nearly two-thirds of the products expected to be launched over the next two years are specialty drugs.

“With several of the biosimilars on the market, I don’t see a consistent strategy — it differs from class to class,” Hunter says. In some cases the brand name product is excluded, while in others it is not, he says, adding that PBMs likely will solidify their strategies as more biosimilars come to market. “One of the big ones will be [a biosimilar for] Humira [adalimumab], but that’s not coming until 2023,” he says.

The FDA has approved four biosimilars for AbbVie Inc.’s blockbuster autoimmune product, but the first one won’t enter the market until early 2023.

by Jane Anderson

 

 

About Half of Payers Expect to Manage Beovu, Eylea at Parity

by Angela Maas

Earlier this month, the FDA approved Beovu (brolucizumab-dbll) from Novartis Pharmaceuticals Corp. for the treatment of neovascular (wet) age-related macular degeneration (AMD). The intravitreal injection will compete in a fairly crowded anti-vascular endothelial growth factor (anti-VEGF) market that is led by Eylea (aflibercept) from Regeneron Pharmaceuticals, Inc. Research from Zitter Insights shows that it’s likely the drugs will be managed at parity.

Novartis priced the new therapy at $1,850 per vial — the same per-dose price as Eylea.

Other anti-VEGFs for wet AMD include Lucentis (ranibizumab), from Genentech USA, Inc., a member of the Roche Group; Macugen (pegaptanib) from Bausch & Lomb Inc.; and off-label Avastin (bevacizumab) from Genentech USA, Inc., a Roche Group company.

For the Managed Care Biologics and Injectables Index: Q4 2018, Zitter surveyed pharmacy and therapeutics (P&T) committee members who work for 51 commercial payers with 139.8 million covered lives between Nov. 30, 2018, and Jan. 7, 2019. When asked about how they would manage Beovu and Eylea, 49% said they were more likely than unlikely or significantly likely to manage the two drugs at parity (see chart below).

Thirty-five percent said they were more likely than unlikely or significantly likely to start discussions with Regeneron to prefer Eylea over Beovu. These respondents said the average discount, including rebates, that they would need to prefer Eylea over Beovu is 29%. The 16% who said they were likely or significantly likely to prefer Beovu over Eylea said they would need a 27% discount to do so.

Sixteen percent said it was likely or significantly likely that they would prefer Beovu over other anti- VEGF agents besides Eylea. Of those, 73% said they were likely or significantly likely to prefer Beovu over Macugen, but only 23% said they were likely or significantly likely to prefer it over Lucentis and 9% said the same of Avastin.

Among 50 retinal specialists polled, 70% were likely or significantly likely to prescribe brolucizumab over Lucentis in wet AMD, and 60% said the same about brolucizumab over Eylea.

 

Reality Check: Psoriasis (PsO)

 

Coverage


Pharmacy Benefit

Under the pharmacy benefit, almost 74% of the lives under commercial formularies are covered with utilization management restrictions. Around 64% of the lives under Medicare pharmacy benefit formularies are not covered for at least one of the drugs.

 


Medical Benefit

Under the medical benefit, about 40% of the lives under commercial and health exchange policies are covered with utilization management restrictions. More than 24% of Medicare beneficiaries have access to the medications without restrictions.

 

 

Trends From AIS Health


FDA Approves Hadlima

In July 2019, the FDA approved Samsung Bioepis Co., Ltd.’s Hadlima (adalimumab-bwwd) for the treatment of plaque psoriasis, rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, adult Crohn’s disease and ulcerative colitis. It is the fourth biosimilar of AbbVie Inc.’s Humira (adalimumab) that the agency has approved. Merck & Co., Inc. will commercialize the drug in the U.S. It is expected to launch after June 30, 2023.

Subscribers to AIS’s RADAR on Specialty Pharmacy may read the in-depth article online


FDA Approves AbbVie’s Injectable Skyrizi

In April 2019, the FDA approved AbbVie Inc.’s injectable Skyrizi (risankizumab-rzaa) for the treatment of plaque psoriasis. AbbVie’s Hurima pen is one of the most advantaged therapies for the treatment of plaque psoriasis, holding preferred status for 9% of covered lives, which grows to 60% including prior authorization and step therapy.

Via AIS Health


Payers Specify Step Duration

As payers try to get a handle on the growing and costly array of biologics approved for psoriasis and other inflammatory conditions, some have begun stipulating the specific length of time patients need to be on a particular drug before they can step to the next drug. “It’s a growing restriction that we see in immunology,” says an industry expert. “There is a hierarchy in immunology, especially in plaque psoriasis, with so many products that are available.”

Subscribers to AIS’s RADAR on Specialty Pharmacy may read the in-depth article online

 

Key Findings


Market Events Drive Changes

In July 2019, the FDA approved Samsung Bioepis Co., Ltd.’s Hadlima (adalimumab-bwwd) for the treatment of plaque psoriasis, among other conditions. It is the fourth biosimilar of AbbVie Inc.’s Humira (adalimumab) that the agency has approved. In April 2019, the FDA approved AbbVie’s injectable Skyrizi (risankizumab-rzaa) for the treatment of plaque psoriasis.

Competitive Market Landscape

Manufacturers with franchises across inflammatory indications often hold contracting power and improved position, which is everything in this market. While a tumor necrosis factor (TNF) inhibitor is nearly always the first-line biologic after generics, there are situations where others (like Janus kinase inhibitors) have been placed on this tier. The entrance of interleukin inhibitors in recent years, with more on the way, means the desire to move past a TNF agent for better efficacy is something plans protect against and occasionally embrace. The sheer volume of products and manufacturers with products in this class, coupled with the relatively high number of possible patients, means that contracting competition is enormous.

Medical and Pharmacy Benefit Implications

Many products are covered under both the medical and pharmacy benefits, with even infusions covered under the pharmacy benefit. Cost sharing on the specialty tier is common with patient support available.

 

 

Acute Myeloid Leukemia Therapy Class Has Seen Boom in New Drugs Since 2017

October 14, 2019

The FDA has approved nearly 10 therapies for acute myeloid leukemia (AML) over the past couple of years. Because most of them target a specific biomarker, it’s critical that people diagnosed with the condition undergo genetic testing to determine whether they fall into a particular patient subgroup.

In people with AML, the bone marrow produces abnormal white blood cells, red blood cells or platelets. The abnormal growth “results in suppressed normal bone marrow activity,

The FDA has approved nearly 10 therapies for acute myeloid leukemia (AML) over the past couple of years. Because most of them target a specific biomarker, it’s critical that people diagnosed with the condition undergo genetic testing to determine whether they fall into a particular patient subgroup.

In people with AML, the bone marrow produces abnormal white blood cells, red blood cells or platelets. The abnormal growth “results in suppressed normal bone marrow activity, leading to anemia, infections, and bleeding, among other symptoms and complications, and can be fatal if left untreated. Hence, the goal of therapy is to be aggressive with the goal [of] achieving complete remission,” says Winston Wong, Pharm.D., president of W-Squared Group. “At the highest level, treatment decisions are made based upon AML classification, comorbidities and age, all of which will determine the patient’s prognosis and ability to tolerate the treatment. Genomic profiling studies play a key role to identify potential genomic abnormalities and mutations, for which there is a strong correlation to prognosis.”

Once people go into remission, he tells AIS Health, they undergo consolidation treatment, also known as post-remission therapy. This, he says, consists of “aggressive chemotherapy, with targeted medications added on if a specific gene mutation is present. Selection of treatment option is based on individual parameters such as age, white blood cell counts, ease of remission induction, comorbidities and any evidence of measurable residual disease.”

Those patients not achieving remission or who have relapsed often undergo stem cell transplants or enroll in clinical trials, he adds.

As far as comorbidities go, there are not any specific ones that are common with AML, says Mesfin Tegenu, R.Ph., president of PerformRx, LLC. But when people are diagnosed with the condition, “they tend to have at least one comorbidity,” such as diabetes, he says. “However, these comorbidities may be due to other factors such as lifestyle/age and are not necessarily attributed to AML. Patients with comorbidities tend to have compromised health outcomes when it comes to treatment compared to those who are otherwise healthy.”

And those comorbidities can impact the treatment regimen that the patient undergoes. For example, says Wong, “a comorbidity of heart disease will impact the use of an anthracycline (daunorubicin), which is one of the components of the preferred intense induction chemotherapy regimens. Anthracyclines are a known cardiotoxin, hence will exacerbate the heart disease.”

Class Saw Eight Recent Drug Approvals

The class has undergone a burst of activity recently (see box, p. 4), with the FDA approving eight new therapies since April 2017. The following drugs are the most recent additions to the AML treatment armamentarium:

✦ Rydapt (midostaurin) from Novartis Pharmaceuticals Corp. was approved April 28, 2017.

✦ Idhifa (enasidenib) from Celgene Corp. and Agios Pharmaceuticals, Inc. was approved Aug. 1, 2017.

✦ Vyxeos (daunorubicin and cytarabine) from Jazz Pharmaceuticals plc was approved Aug. 3, 2017.

✦ Mylotarg (gemtuzumab ozogamicin) from Pfizer Inc. was approved Sept. 1, 2017.

Tibsovo (ivosidenib) from Agios Pharmaceuticals, Inc. was approved July 20, 2018.

✦ Daurismo (glasdegib) from Pfizer was approved Nov. 21, 2018.

✦ Venclexta (venetoclax) from AbbVie, Inc. and Genentech USA Inc., a member of the Roche Group, was approved Nov. 21, 2018.

✦ Xospata (gilteritinib) from Astellas Pharma Inc. was approved Nov. 28, 2018.

Most recently, on June 21, Daiichi Sankyo Company, Ltd. said that the FDA had issued a complete response letter (CRL) for its new drug application for quizartinib for the treatment of adults with R/R FLT3-internal tandem duplications (ITD) AML. The move followed a May 14 vote by the agency’s Oncologic Drugs Advisory Committee recommending eight to three against approval of the drug. The company said it is evaluating the CRL and “will determine next steps in the U.S.” It was approved June 18 for use in Japan under the brand name Vanflyta.

“Prior to two years ago, we had no new drugs for over a decade, and now we have eight new drugs approved in just the last two years, so the whole field has changed,” said Daniel J. DeAngelo, M.D., Ph.D., chief, division of leukemia, institute physician, professor of medicine, Harvard Medical School, in an interview published on the website obroncology.com. “Really what that means is that it is really important to make a specific genetic and molecular diagnosis for our patients with acute myeloid leukemia because the treatment might very well may be different.”

“AML is associated with characteristic nonrandom chromosomal abnormalities and genetic defects that are used to classify AML and that are associated with response to therapy and prognosis,” says Wong. “Continued research into the genomic aspect of AML is resulting in a constant redefining of risk stratification and development of targeted therapies. At this time, the new targeted therapies are being given in addition to the aggressive chemotherapy when the specific genomic mutation is present. There is no doubt that as we continue to gain insight to the presence of other genomic mutations, we can expect to see further refinement of the treatment options, as well as additional novel targeted treatment options developed.

“Currently, we have identified gene mutations impacting cell proliferation, myeloid differentiation, cell-cycle regulation and epigenetic regulation,” he continues. “Specifically, mutations in FLT3, NPM1, KIT, CEBPA and TET2 impact proliferation and differentiation, [and] DNMT3A, ASXL1, IDH2 and TET2 impact epigenetic regulation. New novel targeted medications, as well as older medications with an expanded indication, are currently being used to address cell proliferation (FLT3 inhibitors) and epigenetic regulation (IDH inhibitors).”

Many of the newer drugs are oral formulations, which, “in general, are easier to administer,” points out Tegenu. “Rather than having to go into a hospital or clinic for treatment, a patient can simply take a medication orally for their condition.”

However, even with all the new therapies available, “in some respects, the treatment options have not really changed,” Wong states. AML treatment starts “with one to two courses of intensive combination chemotherapy (induction therapy), with a goal of obtaining a complete remission. Targeted medications would be added on to the chemotherapy. The rationale for this approach is because the specific gene mutations are not consistently present across the broad AML population,…chemotherapy is still the only option for a broad suppression of the bone marrow. The oral targeted therapies are also used for the older patients, more than 60 years old, who are not candidates for intense chemotherapy, as well as for relapsing/refractory AML.”

 


MMIT’s Take: Acute Myeloid Leukemia

“Acute Myeloid Leukemia (AML) presents a very high financial burden on patients, payers and the healthcare system overall,” Alaa Elsaeed, a client success lead at MMIT, tells AIS Health. “This is due to long hospitalizations, high rates of complications and the need for stem cell transplants.”

According to Elsaeed, approximately 20,000 new cases of AML were estimated to be diagnosed in 2018, making it one of the most common forms of acute leukemia in the U.S. Elsaeed says that despite a number of new drugs on the market and other recent medical advances, outcomes for AML patients are still poor due to high rates of relapse, the cancer’s poor response to treatment and increased prevalence among seniors.

“The payer concern regarding the budget impact of AML has historically been low due to the small size of the population in comparison to solid tumors, the high severity of the disease and the lack of branded treatment options,” Elsaeed adds. “As a result, few access controls were historically utilized for AML therapies.”

“Looking at the AML market basket’s overall market access, with the exception of older products, most of the class is in the covered or better tiers for about 35% of lives,” Elsaeed says, mentioning that payers often require prior authorization for AML therapies due to their high cost, patient safety and concern for off-label use.

While the cost of AML treatment has not previously been a cause for concern, Elsaeed says increased prevalence of the disease and the “surge” of newly approved products has some payers considering how these developments might impact their budgets in the future.

“Many of the recently approved products and late stage pipeline candidates are targeted therapies and despite their smaller patient populations, they are anticipated to contribute heavily to the increasing cost of therapy,” he says. “Due to the rising expenditure, payer acceptance will become more critical for the commercial success of new AML therapies.”


 

Average annual costs for someone with AML can vary. “Many sources have reported different costs for AML patients,” explains Tegenu. “In a study conducted in 2017, 237 newly diagnosed patients with an average age of 73.1 years were observed. After diagnosis, these patients were either started on chemotherapy or given a stem cell transplant. During the first year after diagnosis, the average annual cost was about $294,144. The second year after diagnosis costs about $147,708. Treatment-related costs were approximately $188,252 and approximately $57,606 in the first and second year respectively. If a patient required a stem cell transplant and chemotherapy, their average cost for treatment can be about $544,178.”

Payers utilize a variety of management tactics with AML therapies (see infographic, p. 6). “Payers often require prior authorization of these therapies due to safety, concern for off-label usage and cost,” says Tegenu. A variety of drugs are used off- label for certain patient populations, he notes.

“Due to the various considerations that go into the choice of a treatment option, the management of the various treatment options by a payer is difficult,” maintains Wong. In addition to the above-mentioned factors that are considered when deciding upon a regimen, “past disease history also plays a part in treatment decisions. Hence, utilization management defaults to the usual confirmation of the indicated use, e.g., an FLT3 inhibitor in the presence of an FLT3 mutation. In cases where off-label utilization is requested, management consists of confirmation that there is adequate medical evidence [about] the benefit of the off-label use in this indication, e.g., Nexavar in the presence of an FLT3 mutation.”

Asked if AML is a condition suited for value-based contracting, Tegenu asserts that “all therapies associated with high cost should have some kind of value-based payment models to make drug manufacturers an integral part of the health care delivery system.”

According to Wong, the newer drugs would be better candidates for such deals due to AML’s heterogenicity and the fact that “the treatment foundation is still conventional chemotherapy, which for the most part is available as a generic.”

Value-Based Deals Pose Challenges

Challenges exist in implementing such arrangements for the newer drugs, he says: “These are targeted medications, and the IT systems of today are not sophisticated enough to be able to document the presence of the gene mutation, e.g., extracting genomic profile information from the lab system/[electronic medical record] and interfacing it with the payer claims system. We would not be able to determine if the targeted agent was successful in getting the patient into remission, as well as maintaining that remission through consolidation.

In addition, the targeted agents are add-on therapy and may very well not be effective enough without the chemotherapy. So then, it is a question of whether remission and consolidation [were] achieved because of the targeted medication. Patients reaching remission and consolidation is dependent upon individual patient factors beyond that of medication effectiveness. Thus, it is the entire clinical presentation and treatment that plays into the success of positive outcome.”

According to Tegenu and Wong, numerous drugs are in the AML pipeline. Jazz has several drugs in phase I, II and III trials, says Tegenu. In early September, Forty Seven, Inc. said the FDA had granted fast track designation to its magrolimab for AML and myelodysplastic syndrome based on initial data from a Phase Ib trial. The agency also gave the therapy orphan drug designation in AML.

Wong notes that compounds being studied focus both on “mutations and pathways already identified and targeted, e.g., FLT3 [and] IDH, as well as mutations and pathways that have been identified, however, the significance [of] which is being evaluated. As the research in this area continues, novel medication targets are evaluated as well.”

Researchers also are studying targeted follow-on therapies that are better tolerated in terms of side effects, he says. In treating AML, “it’s important to be correct and not fast,” said DeAngelo. “Patients can wait a few days before initiating chemotherapy to try and put them into these different subgroups, and I think that’s really where the improvement for our patients with acute myeloid leukemia is going to be coming from in the future.”

by Angela Maas

 

Radar Landscape Offers a Narrative Experience for Payers’ Covered Lives

MMIT’s newest product, Radar Landscape, shifts the focus from drug coverage to the distribution of payers’ covered lives. MMIT developed Radar Landscape after receiving feedback from account managers who were interested in having a narrative on the allocation of payer lives in the market. Radar Landscape takes MMIT’s lives data and provides detailed breakdowns at a channel, state, core-based statistical area (CBSA) and formulary level, which users can view and export in a table or graph format. Radar Landscape achieves this level of granularity by providing users with three unique views: overview, account and geography.

The overview screen provides a high-level summary of how lives are distributed at the payer and state level. The controller lives analysis breaks out the number of controlled pharmacy and medical lives for each account and lists the top 10 payers for both benefit types. The overview of geographies shows lives distribution at a state level, which can be viewed as a table or geographical heat map. To understand the lives distribution for a specific payer, account managers can navigate to the accounts view.

Account managers can leverage the accounts view to understand the total number of enrolled pharmacy and medical lives for the selected payer. Once the account filter is applied, Radar Landscape will populate the payer’s top 10 formularies, the total number of lives they control in each channel and the number of enrolled lives by state and CBSA. To further understand lives distribution at the geographical level, account managers can navigate to the geography view.

Using the geography view, users can observe the total number of covered lives and top payers in a specific state. Once the geography filter is set, account managers will be able to see the top 10 controllers and formularies in their selected area, as well as the distribution of lives by channel. The geography view also includes all of the pharmacy benefits managers operating in a specific state, as well as a lives breakout for employer-based plans.

To learn more about Radar Landscape’s functions and licensing, please reach out to MMIT’s sales team at sales@mmitnetwork.com.

by Amanda Tadrzynski

 

Will New Ways to Finance Costly Drugs Satisfy Employers?

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.

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.

“Employers are looking for solutions like that from their health plan partners and the PBMs,” says Steve Wojcik, vice president of public policy for the National Business Group on Health. 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.

by Leslie Small

 



 

New Payment Models for CAR T-cell Treatments Are Still Years Off

September 23, 2019

On Aug. 7, CMS announced that, effective Oct. 1, it would cover two types of CAR T-cell treatment, which use a patient’s genetically modified immune cells to fight cancer. But private payers continue to reimburse providers for CAR T-cell treatment for patients on a case-by-case basis, experts tell AIS Health, and they expect that trend to continue until this treatment becomes a standard of care. That’s likely to take more than three years.

In August 2017,

On Aug. 7, CMS announced that, effective Oct. 1, it would cover two types of CAR T-cell treatment, which use a patient’s genetically modified immune cells to fight cancer. But private payers continue to reimburse providers for CAR T-cell treatment for patients on a case-by-case basis, experts tell AIS Health, and they expect that trend to continue until this treatment becomes a standard of care. That’s likely to take more than three years.

In August 2017, FDA approved Novartis’ Kymriah (tisagenlecleucel) for certain pediatric and young adult patients with a form of acute lymphoblastic leukemia (ALL). In October of that year, the federal agency approved Kite Pharma, Inc.’s Yescarta (axicabtagene ciloleucel) for adult patients with certain types of large B-cell lymphoma who haven’t responded to or who have relapsed after at least two other kinds of treatment.

According to the National Cancer Institute, approximately 3,100 patients age 20 and younger are diagnosed with ALL each year; B-cell is the most common type of ALL. Kymriah is intended for patients whose cancer has been unresponsive to or has returned after additional treatment; this occurs in 15% to 20% of patients.

Diffuse large B-cell lymphoma is the most common type of non-Hodgkin’s lymphoma (NHL) in adults. Each year, approximately 72,000 new cases of NHL are diagnosed; diffuse large B-cell lymphoma constitutes about one in three newly diagnosed cases.

According to James Baumgardner, Ph.D., senior research economist at Precision Health Economics, CMS’s decision to cover CAR T-cell treatment signals to private payers that they must cover the treatment (see box, p. X). He adds that, based on his research, published in the journal Blood — and research conducted by the Institute for Clinical and Economic Review (ICER) — CAR T-cell treatments do quite well on cost-effectiveness metrics.

“The cost of [CAR T-cell treatment] is very high. The benefits are also very high,” says Baumgardner.

Affordability Will Be an Issue

ICER released a report in March 2018 that said both therapies “appear to be priced in alignment with their clinical value, but there are potential short-term affordability concerns — for axicabtagene ciloleucel under its current indication, and for both treatments should they receive future approvals for broader patient populations.”

In addition, ICER encouraged stakeholders to “collaborate now to develop payment and delivery systems that can ensure timely patient access, manage short-term affordability for expensive one-time treatments, and continue to reward the innovation that brings these new treatments to market.”

Significant changes to payment models for CAR T-cell treatment are at least three years away, says Max Cambras, managing partner and partner in L.E.K.’s life sciences practice. Payers need access to clinical outcomes data before they can propose a different payment model, such as “some sort of a capitated rate” or a bundle for the episode of care. The lack of insight into the patient populations that are more likely to have complex and costly adverse events is an impediment to bundled payments, he adds.

Thus, big questions — and challenges — remain for payer executives. One question that’s top of mind: How will they cover patients who need these life-saving treatments while managing risk and remaining profitable?

Kymriah costs $475,000 and Yescarta costs $373,000, each on a per-treatment basis. The price tags only include the costs of the drugs, not the follow-up care patients receive after treatment. Serious side effects, such as cytokine release syndrome (a large, rapid release of cytokines into the blood from immune cells affected by immunotherapy), neurological toxicities and fever, can make caring for some patients more complex.

More Patient Data Is Needed

It’s those serious side effects that land some patients in the intensive care unit. That’s another factor that can introduce significant variability into the type of care patients need and the total cost of care.

Given this reality, Cambras says patient stratification is the key to cost management. But that data will come only as providers treat more patients with CAR T-cell therapy. With this data in hand, he says providers and payers will be able to determine the patients who are most likely to experience serious side effects and then plan more effectively for the cost of care.

Cambras says CMS’s recent announcement signals that providers have “a lot more latitude in terms of the site of care,” and that flexibility could reduce the total cost of care. For example, providers could consider moving some aspects of the patient’s care to a skilled nursing facility, he adds.

CMS’s announcement also has an immediate impact on private payers’ Medicare Advantage plans, says Ash Shehata, partner with KPMG’s Global Healthcare Center of Excellence. CAR T-cell treatment becoming part of the standard Medicare benefit is “obviously a pretty big deal” for seniors, he adds. That means private payers will now be tasked with accommodating these treatments in their Medicare Advantage plans.

As CAR T-cell treatment continues to move from an approved therapy to a standard treatment within Medicare, Shehata says Medicaid will likely provide coverage as well. While CMS announced that it will increase its reimbursement from 50% to 65% of the cost of the treatment, state Medicaid programs are likely to pay even less, likely around 40%, he adds.

Payers Should Examine Contracts

Shehata’s advice, especially for larger payers: Take a hard look at contracts with providers. Also important is monitoring the reimbursement rate at which Medicare and Medicaid pays for these treatments and tracking reimbursement to those trends.

In addition, he advises payer executives to invest in a care coordination-focused approach to patients. Specifically, that means being mindful about the many “transactional decisions” about subsequent treatments and hospital admissions. “You can’t wait three or six or nine weeks between treatment processes to get approval,” says Shehata.

He also says payers should choose a select group of providers that understand how to manage patients through their care journey with CAR T-cell treatment.

Then there are the calls payers will receive from patients and physicians seeking information about coverage for CAR T-cell treatment. Payers must prepare for these phone calls, counsels Shehata. Staff at payers’ call centers will need detailed information at their fingertips to handle these questions; coverage plans will also need to be updated, he says.

Ben Isgur, who leads the Health Research Institute at PwC, advises payer executives to consider new approaches to covering CAR T-cell treatments. Take, for example, a mortgage model, where a series of perhaps three payments are made over a period of time, or a pure outcomes model, where the manufacturer is paid based on achieving certain health outcomes.

Another option is a hybrid of both approaches, he says. In the hybrid option, the manufacturer receives an initial “mortgage” payment and subsequent payments are based on meeting clinical outcomes.

Isgur says payers can also tap into previous learnings with drugs that treat hepatitis C. Gilead’s Sovaldi initially hit the market at $84,000 for a 12-week treatment, and the company’s Harvoni initially cost $94,500.

Payers’ actuaries were initially caught off guard with these treatments, he says. But, over time, the hepatitis C treatments have meant fewer liver transplants and more lives saved.

Three lessons learned with hepatitis C drugs, according to Isgur:

(1) Track these patient populations, in this case, patients with hepatitis C.

(2) Realize that competition is going to bring down drug prices.

(3) Take advantage of bulk pricing or a subscription model. For example, Louisiana has negotiated a subscription model with Asegua Therapeutics, a subsidiary of Gilead Sciences, for a fixed amount it pays the company for hepatitis C treatment for its Medicaid and prison populations (RDB 1/24/19, p. 1). NPR reports that the state has at least 39,000 people in these subgroups.

by Aine Cryts

 


MMIT’s Take: CAR T-cell Treatments

“The fourth quarter of 2018 was a crucial point for [Novartis’] Kymriah, which saw multiple controllers begin to adopt coverage,” Bill Fucich, a client success lead at MMIT, tells AIS Health. Now that new payment models for CAR T-cell treatments are in development, more payers will be reconsidering Kymriah’s formulary placement, but affordability will be key in determining coverage.

Fucich outlines how payers can begin strategizing to keep costs down. “Identifying self-funded lives for the medical benefit and those self-funded lives with a stop-loss option are key in this space due to the high cost of therapy,” he says. “The ability to negotiate an installment payment plan versus a one-time payment can keep costs in check and impact access.”

Payers should also look to how major insurers have covered Kymriah since launch. He points out that both UnitedHealth Group and Anthem, Inc. began covering Kymriah in the fourth quarter of 2017, within six months of the drug’s launch. “UnitedHealth Group and Anthem, Inc., the two largest payers in the commercial space, have shown willingness to cover products in this space with restrictions and adopt coverage earlier in launch,” he says.

“Kymriah saw the largest increase of coverage after 18 months post launch, gaining 68 million lives from 12 months post launch in the commercial space,” Fucich says. “This resulted in coverage increasing from 40% to 89% of commercial lives.”

Medicaid coverage also picked up steam in the same 18-month time period, Fucich says, pointing out that UnitedHealth and Anthem, the second and third largest managed Medicaid payers in the U.S. behind Centene Corp., displayed coverage nearly a year before any other Medicaid payers.

“The state of New York was also an early adopter of coverage on the Medicaid side, adopting coverage in the first quarter of 2018, slightly after United and Anthem,” he says. Fucich says about 10.5 million people, approximately one-sixth of all Medicaid lives, have access to Kymriah.


 

PBMs Are Hesitant to Add New Narcolepsy Drugs to Formularies

Two newly approved narcolepsy medications offer novel, possibly more effective options to people for whom older medications aren’t working well, but most health plans are requiring patients and providers to try generic alternatives first.

The FDA in March approved Jazz Pharmaceuticals’ Sunosi (solriamfetol) the first dual-acting dopamine and norepinephrine reuptake inhibitor, for adults with narcolepsy or obstructive sleep apnea. In August, the agency approved Harmony Biosciences, LLC’s Wakix (pitolisant), a selective histamine 3 receptor antagonist/inverse agonist that works to increase histamine in the brain. Sunosi was launched in July, and Wakix is expected to be launched later this year.

Some researchers say Sunosi and Wakix may have advantages over older treatments. Still, plans have been reluctant so far to add Sunosi to their preferred drug lists, and they seem likely to take the same cautious approach with Wakix.

First-line treatment for narcolepsy generally involves stimulant medications such as methylphenidate, amphetamines or modafinil/armodafinil, says Mesfin Tegenu, R.Ph., president of PerformRx. “Efficacy of the agents rarely exceeds around 70% to 80% of the normal ability to stay awake,” Tegenu tells AIS Health.

April Kunze, Pharm.D., senior director, clinical formulary development and trend management strategy at Prime Therapeutics LLC, adds that “more than half of all patients fail over time on Provigil [modafinil] or Nuvigil [armodafinil].”

Some stimulants, including modafinil and some forms of methylphenidates and amphetamines, are available in generic form, Tegenu says. “Many plans may require trial(s) of an available generic product prior to payment of a brand-only formulation, or trial of less costly alternatives to higher-priced generic items if there’s a significant price difference,” he says.

It’s not clear whether either Sunosi or Wakix provide substantially better outcomes than the therapies currently in use, says April Kunze, Pharm.D., senior director, clinical formulary development and trend management strategy at Prime Therapeutics LLC.

“Sunosi has not been compared to modafinil in head-to-head studies,” Kunze says. “Solriamfetol may be a reasonable choice with more clinical experience and head-to-head studies showing non-inferiority or superiority to modafanil. Until that time, it is likely that payers will want to use guideline-recommended therapies prior to a new therapy.”

Studies Highlight Drugs’ Effectiveness

Sunosi’s approval was based on Phase 3 clinical trials involving more than 900 narcolepsy and obstructive sleep apnea patients who received either 75 mg, 150 mg or 300 mg of Sunosi, or placebo, once a day. Compared to the placebo group, the patients who received 150 mg of Sunosi were able to stay awake better by the end of the trial. In the 12-week clinical studies, approximately 68% to 74% of people taking Sunosi at 75 mg and 78% to 90% of people taking Sunosi at 150 mg reported improvement in their overall clinical condition.

The study showed that the improvements in wakefulness began during the first week of taking the drug and ramped up throughout the 12-week trial period. Data from the group taking 300 mg indicated a greater risk of side effects. Because of this, the FDA considered implementing a black box warning on the drug, but Jazz avoided the black box by limiting dosage to 150 mg.

Wakix, which is the only narcolepsy treatment not scheduled as a controlled substance, is set to launch in the fourth quarter. Trials that included 261 patients in total demonstrated a statistically significant improvement in excessive daytime sleepiness when compared to placebo. Harmony Biosciences says the drug may appeal to patients who don’t want to take controlled substances.

Prime Therapeutics will be evaluating Sunosi at its next Pharmacy & Therapeutics (P&T) committee meeting for formulary placement and utilization management placement, Kunze tells AIS Health. Wakix also will undergo P&T review prior to launch.

Tegenu says that both Sunosi and Wakix are non-formulary products for now for PerformRx, since it’s not possible to know whether they’re equally or more effective than older treatments. They will be “handled the same as all newly available drugs: considered non-formulary until enough clinical data is made available to add them to the covered medications class of drugs.”

by Jane Anderson

 

Home Infusions Declined From 2018-2019, but Rise Is Expected

by Angela Maas

A recent study by UnitedHealth Group says the location in which a specialty drug is administered could make a huge difference in terms of costs. The study estimates that when specialty therapies are administered in a patient’s home or in a physician’s office as opposed to a hospital outpatient department (HOPD), annual savings for five conditions would total $4 billion. But Zitter Insights research shows that the percentage of people receiving nononcology infusions at home actually dropped between 2018 and 2019.

The United study found the following savings opportunities per patient when a drug was administered at home or in a physician office vs. an HOPD:

✦ For multiple sclerosis, there was a savings of $37,000 for four months of treatment.

✦ For immune deficiency, there was a savings of $32,000 for six months of treatment.

✦ For rheumatoid arthritis, there was a five-month savings of $28,000.

✦ For inflammatory bowel disease, there was a five-month savings of $21,000.

✦ For cancer chemotherapy, there was a savings of $16,000 for four months of treatment.

Between May 30 and July 20, Zitter surveyed pharmacy and therapeutics (P&T) committee members who work for 48 commercial plans covering 170.4 million lives and found that an average of 12% of the plans’ members receive nononcology infusion therapy at home (see chart below). That’s down from the 16% reported for 2018 by 49 commercial plans covering 147.6 million members. Also seeing a decline were HOPD infusions, which dropped from 13% in 2018 to 10% this year. However, the percentage of physician office administrations increased from 19% to 24%. Many of the payers said they anticipated a shift in care to the home by the middle of 2020.

Zitter also found that among the 48 commercial respondents, 45% prefer that specific therapies are administered either at home or at an infusion center. Sixty percent of 30 Medicare payers with 32.3 million covered lives also cited this. Among the commercial plans, 30% said they always prefer home infusion regardless of what drug is being administered.

 

 

Reality Check: Breast Cancer HER2+

 

Coverage


Pharmacy Benefit

Under the pharmacy benefit, about 32% of the lives under commercial formularies are covered with utilization management restrictions. In health exchange and Medicare formularies, about 38% and 52% of the lives are not covered for at least one of the drugs, respectively.


Medical Benefit

About 39% of the lives under commercial policies have access to the medications with utilization management restrictions. Under Medicare policies, more than 82% of the lives are covered without restrictions in place.

 

Trends From AIS Health


Amgen and Allergan Launch Kanjinti

In July 2019, Amgen Inc. and Allergan plc launched oncology drugs Mvasi (bevacizumab-awwb), an Avastin (bevacizumab) biosimilar, and Kanjinti (trastuzumab), a Herceptin (trastuzumab) biosimilar. They are the first biosimilars of those reference drugs, both from Genentech USA, Inc., a Roche Group unit, to launch in the United States. The biosimilars are priced 15% less than their reference products.

Subscribers to AIS’s RADAR on Specialty Pharmacy may read the in-depth article online


FDA Approves Kanjinti

In June 2019, the FDA approved Amgen Inc. and Allergan plc’s Kanjinti (trastuzumab-anns) for the treatment of human epidermal growth factor receptor 2-overexpressing breast cancer and HER2-overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. It is the fifth biosimilar of Herceptin (trastuzumab), from Genentech Inc., that the agency has approved.

Subscribers to AIS’s RADAR on Specialty Pharmacy may read the in-depth article online


Payers Plan to Prefer Herceptin Biosimilars

With the Herceptin biosimilars expected to become available in 2019, almost half of commercial payers responding to a Zitter Insights survey say they expect to prefer biosimilar Herceptin over other similar drugs for the adjuvant treatment of breast cancer. The respondents also said the average discount, inclusive of rebates, required for them to prefer biosimilar Herceptin over other HER2-positive adjuvant therapies is 35%.

Subscribers to AIS’s RADAR on Specialty Pharmacy may read the in-depth article online

 

Key Findings


Market Events Drive Changes

In June 2019, the FDA approved Amgen Inc. and Allergan plc’s Kanjinti (trastuzumab-anns) for the treatment of human epidermal growth factor receptor 2-overexpressing breast cancer and HER2- overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. In July 2019, it became the first biosimilar of Herceptin (trastuzumab), from Genentech USA, Inc., a Roche Group unit, to launch in the U.S. The FDA has approved other biosimilars of the therapy, but they have not launched yet; more are in the pipeline. In February 2019, the FDA approved a subcutaneous form of Herceptin, Herceptin Hylecta, for use in HER2-positive breast cancer.

Competitive Landscape

In most cases, especially when used before or after surgery, chemotherapy is most effective when combinations of drugs are used. Today, doctors use many different combinations, and it’s not clear that any single one is the best. It is rare to see a payer place branded products for breast cancer on a preferred tier in the pharmacy benefit, mainly because the majority of products process through the medical benefit. Since many combinations of products are used, no preference is given to one combination over another.

Payer Coverage

We typically see treatment through standard-of-care chemotherapy, and combinations follow more targeted therapy. Many policies require HER2 testing. Reimbursement via buy and bill and specialty pharmacy requirements are common. Most policies follow national guidelines in cancer treatment.