People on the Move

January 24, 2020

Medicaid Expansion Slows Health Decline in Southern States, New Research Shows

January 24, 2020

As debates on the decision to expand Medicaid continue in Kansas, Missouri and Oklahoma, a new study in Health Affairs found that Medicaid expansion improved health outcomes in southern U.S. states, causing fewer self-reported declines in health status among low-income residents. This is the latest addition to a body of research that suggests Medicaid expansion has improved health outcomes in vulnerable populations. Researchers studied about 15,000 people, the majority of whom received most of their health care from community health centers in 12 southern states.

by Carina Belles

As debates on the decision to expand Medicaid continue in Kansas, Missouri and Oklahoma, a new study in Health Affairs found that Medicaid expansion improved health outcomes in southern U.S. states, causing fewer self-reported declines in health status among low-income residents. This is the latest addition to a body of research that suggests Medicaid expansion has improved health outcomes in vulnerable populations. Researchers studied about 15,000 people, the majority of whom received most of their health care from community health centers in 12 southern states. The states that have yet to expand Medicaid as of 2020 are largely concentrated in the South (see map below), where legislators have held the position that the existing safety net provides adequate support for low-income Americans. This new research refutes that position, however. During the study, subjects were polled about their health status both before and after Medicaid expansion, with researchers finding that among the expansion population, 7.6% more people reported an increase in Medicaid coverage, and 1.8% fewer people reported a decline in their own health status compared to the non-expansion population. Citing this slower decline, researchers ultimately concluded that safety-net access is not an adequate substitute for insurance, and that states could “improve the health of their low-income residents by accepting expansion funds or otherwise extending coverage to low-income residents.” See a summary of the findings in the graphics below, plus the researchers’ state rankings regarding declining health.

*Researchers ranked the 12 selected states based on how their subjects’ self-reported health status changed from the pre-expansion to expansion time period.

NOTES: The 12 states selected by researchers were Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia. During the study, which ran between 2008 and 2013, and again between 2015 and 2017, four states (Arkansas, Kentucky, Louisiana and West Virginia) expanded Medicaid. Researchers categorized those states as expansion states. Virginia is included in the study as a non-expansion state, as its Medicaid expansion did not take effect until 2019.

SOURCE: DHP, AIS’s Directory of Health Plans; Medicaid Expansion Slowed Rates of Health Decline for Low-Income Adults in Southern States, Health Affairs, January 2020. View the study here: http://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2019.00929.

Datapoint: Novo Nordisk’s Ozempic Receives Expanded Diabetes Indication From FDA

January 23, 2020

The FDA last week approved Novo Nordisk’s Ozempic to “reduce the risk of major adverse cardiovascular events such as heart attack, stroke or death in adults with type 2 diabetes and known heart disease,” an expansion of the drug’s current type 2 diabetes indication. For the treatment of type 2 diabetes, Ozempic currently holds preferred formulary status for 44% of all covered lives.

The FDA last week approved Novo Nordisk’s Ozempic to “reduce the risk of major adverse cardiovascular events such as heart attack, stroke or death in adults with type 2 diabetes and known heart disease,” an expansion of the drug’s current type 2 diabetes indication. For the treatment of type 2 diabetes, Ozempic currently holds preferred formulary status for 44% of all covered lives.

SOURCE: MMIT Analytics, as of 1/22/20

Major Insurers Pledge $55 Million to Try to Lower Generic Drug Prices

January 23, 2020

A major group of insurers said it would invest $55 million to create cheaper versions of expensive generic drugs for which there is little competition, in a further sign of dissatisfaction with the pharmaceutical industry’s price-setting practices.

The decision by the Blue Cross Blue Shield Association and 18 of its member organizations, which insure about 40 million people, is part of a partnership agreement with Civica Rx, a nonprofit that is already selling drugs used in hospitals to health systems around the country.

A major group of insurers said it would invest $55 million to create cheaper versions of expensive generic drugs for which there is little competition, in a further sign of dissatisfaction with the pharmaceutical industry’s price-setting practices.

The decision by the Blue Cross Blue Shield Association and 18 of its member organizations, which insure about 40 million people, is part of a partnership agreement with Civica Rx, a nonprofit that is already selling drugs used in hospitals to health systems around the country.

Frustrated with high drug prices, especially on essential medicines like insulin, state and federal lawmakers have signaled interest in manufacturing generic medications to try to lower costs for millions of Americans. Gov. Gavin Newsom of California recently floated a similar proposal, in which the state would contract with outside manufacturers to sell generic drugs under the state’s own label. And Senator Elizabeth Warren, the Massachusetts Democrat seeking her party’s presidential nomination, has advanced a similar proposal….

Read the full The New York Times article

Supreme Court to Determine States’ Ability to Regulate PBMs

January 23, 2020

The Supreme Court has agreed to hear a case that observers say ultimately could upend state-based efforts to regulate PBMs and potentially even lead to legislation on the federal level to rein them in. The lawsuit, which was brought by the Pharmaceutical Care Management Association, challenges a 2015 Arkansas law that requires PBMs to reimburse pharmacies at or above their wholesale cost for generic drugs.

By Jane Anderson

The Supreme Court has agreed to hear a case that observers say ultimately could upend state-based efforts to regulate PBMs and potentially even lead to legislation on the federal level to rein them in. The lawsuit, which was brought by the Pharmaceutical Care Management Association, challenges a 2015 Arkansas law that requires PBMs to reimburse pharmacies at or above their wholesale cost for generic drugs.

The case boils down to whether PBMs are acting as agents under the Employee Retirement Income Security Act of 1974 (ERISA) and therefore are exempt from state-level regulation, or whether they are a “non-interested party and therefore subject to regulation,” says Jeff Myers, founder of health care consulting firm OptDis. He says that he believes it’s likely the high court justices will side with PCMA and the PBM industry, agreeing that ERISA bars state laws like the one at issue in Arkansas.

“If the Supreme Court were to say states have the ability to regulate the PBM marketplace inside ERISA plans…it would give states an almost unlimited ability to force payers to pay a rate [to pharmacies] they deem sufficient,” Myers says. Independent pharmacy lobbies generally are quite powerful in states, and would demand higher rates, he says, adding that this would lead to higher drug prices overall.

If the Supreme Court rules that states can’t directly regulate PBMs, he adds, states may try to regulate them via insurers instead, and “stop attacking PBMs directly.” He says this is the more likely scenario, and something the nine justices could be keeping in mind as they consider this case.

“If the PBMs win, the precedent it sets is that states have no ability to control” them under ERISA plans, Myers says. “The only way you can do it is by going to the actual payer and saying, ‘This is a requirement for offering insurance in my state.’”