Drug Benefits

Premiums Could Rise, but Cost-Sharing May Drop With New Part D Rule

February 22, 2019

The Trump administration on Jan. 31 unveiled a proposed rule that would remove safe-harbor protections under the anti-kickback statute for prescription drug rebates paid by manufacturers to PBMs, Part D plan sponsors and Medicaid managed care organizations. Instead, it encourages drug discounts to be passed directly to patients at the point of sale.

by Jinghong Chen

The Trump administration on Jan. 31 unveiled a proposed rule that would remove safe-harbor protections under the anti-kickback statute for prescription drug rebates paid by manufacturers to PBMs, Part D plan sponsors and Medicaid managed care organizations. Instead, it encourages drug discounts to be passed directly to patients at the point of sale. According to an analysis by CMS’s Office of the Actuary, the majority of beneficiaries will see an increase in their total out-of-pocket payments and premium costs if the new rule is implemented, but reductions in total cost-sharing will exceed total premium increases. Charts below show how the analysis projects the proposed rule will affect Part D’s benefit parameters from 2020 to 2029.

NOTE: True Out-of-Pocket limit varies by beneficiary, according to the mix of brand and generic drugs taken. The figure above is calculated assuming that only brand name drugs are dispensed, which represents the lowest possible estimate for this threshold.

SOURCE: Department of Health and Human Services, Office of Inspector General. Visit https://bit.ly/2MJxTDg.

Datapoint: Harvard Pilgrim Selects OptumRx as New PBM

February 20, 2019

Harvard Pilgrim Health Care said last month it had selected OptumRx as its new pharmacy benefits manager, beginning in 2020. The insurer is currently contracted with MedImpact. Harvard Pilgrim currently serves 1,078,372 members in Connecticut, Maine, Massachusetts and New Hampshire. About 60% of its members are enrolled in Administrative Services Only (ASO) arrangements.

Harvard Pilgrim Health Care said last month it had selected OptumRx as its new pharmacy benefits manager, beginning in 2020. The insurer is currently contracted with MedImpact. Harvard Pilgrim currently serves 1,078,372 members in Connecticut, Maine, Massachusetts and New Hampshire. About 60% of its members are enrolled in Administrative Services Only (ASO) arrangements.

Source: AIS’s Directory of Health Plans

PBMs Raise Concerns on Part D Rebate Rule

February 20, 2019

Nearly two weeks after the Trump administration issued a proposed rule that would effectively overhaul the prescription drug rebate system, the dust has still not settled in the PBM sector as firms brace for a seismic shift in how they do business.

The proposed rule would remove safe-harbor protections under the federal anti-kickback statute for rebates paid by drug manufacturers to PBMs, Part D plans and Medicaid managed care organizations. It would also create two new safe harbors: one for prescription drug discounts offered directly to patients, and one for fixed-fee service arrangements between drug manufacturers and PBMs.

By Leslie Small

Nearly two weeks after the Trump administration issued a proposed rule that would effectively overhaul the prescription drug rebate system, the dust has still not settled in the PBM sector as firms brace for a seismic shift in how they do business.

The proposed rule would remove safe-harbor protections under the federal anti-kickback statute for rebates paid by drug manufacturers to PBMs, Part D plans and Medicaid managed care organizations. It would also create two new safe harbors: one for prescription drug discounts offered directly to patients, and one for fixed-fee service arrangements between drug manufacturers and PBMs.

If the rule is enacted, “the entire Part D and Managed Medicaid pharmacy management industry would have to change,” Mike Kolar, senior vice president and general counsel of Prime Therapeutics, LLC, tells AIS Health. “Prime, and other PBMs, will need to develop new tools and methods to continue to negotiate price on behalf of millions of members,” he adds.

Kolar adds that Prime is “concerned about the adverse economic impacts of the proposal,” as it could raise Medicare Part D premiums and government program costs.

Dea Belazi, president and CEO of specialty-pharmacy-focused PBM AscellaHealth, says the new proposal, if enacted, “is going to be a revenue hit” for his company, “because it is dollars that come in that will no longer come in if this goes through.” But it’s certainly not going to put the PBM out of business, he adds.

Express Scripts Reports Record Low Drug Trend Across Commercial Plans in 2018

February 18, 2019

For its first annual drug trend report as a part of Cigna Corp., Express Scripts Holding Co. said it had achieved a record low drug trend of 0.4% across its clients’ employer-sponsored commercial plans in 2018. Overall, the PBM reported savings of $45 billion for its clients last year.

The PBM cited “an unprecedented 0.3% decline” in per-beneficiary drug spending across Medicare plans. Overall, there was a 1.4% decrease in unit cost trend, which allowed clients to absorb a 1.1% increase in utilization, the PBM said. Oncology replaced diabetes as Medicare’s top therapy class by per member per year spend.

By Judy Packer-Tursman

For its first annual drug trend report as a part of Cigna Corp., Express Scripts Holding Co. said it had achieved a record low drug trend of 0.4% across its clients’ employer-sponsored commercial plans in 2018. Overall, the PBM reported savings of $45 billion for its clients last year.

The PBM cited “an unprecedented 0.3% decline” in per-beneficiary drug spending across Medicare plans. Overall, there was a 1.4% decrease in unit cost trend, which allowed clients to absorb a 1.1% increase in utilization, the PBM said. Oncology replaced diabetes as Medicare’s top therapy class by per member per year spend.

Express Scripts also reported falling unit drug costs for employer, Medicare and Affordable Care Act exchange plans. On the specialty side, the PBM said that although list prices for brand-name specialty drugs rose by 7.1% in 2018, specialty drug costs increased by a lower 2.1% for its employer-sponsored plans, 2.4% for its Medicare plans and 2% for its exchange plans.

“ESI’s report reflects a broader pattern that we are tracking industry-wide as it relates to drug trend,” says Josh Golden at Arthur J. Gallagher & Co.’s Solid Benefit Guidance.

“On the non-specialty side, the absence of any significant new blockbuster brands and the continued deflation of generics has offered plans some much-needed cost relief. These trends have helped offset the mounting cost and utilization increases that we are seeing for specialty products,” Golden says. “As a result of these opposing forces, trend is hovering in the low single digits. This is welcome news for plan sponsors.”

Datapoint: Indivior to Face Major Losses as Suboxone Generics Get Ready to Launch

February 7, 2019

Following another loss in federal court, Indivior does not seem like it will be able to stop Dr. Reddy’s Laboratories’ launch of a generic version of its drug Suboxone, a blockbuster treatment for opioid dependence that makes up most of the company’s sales. Mylan and Alvogen also have generics on the way. Suboxone currently holds preferred formulary status for 51% of all covered lives. Indivior said Suboxone could lose 80% of its market share in just a few months after a generic launch, which could happen as early as next week.

Following another loss in federal court, Indivior does not seem like it will be able to stop Dr. Reddy’s Laboratories’ launch of a generic version of its drug Suboxone, a blockbuster treatment for opioid dependence that makes up most of the company’s sales. Mylan and Alvogen also have generics on the way. Suboxone currently holds preferred formulary status for 51% of all covered lives. Indivior said Suboxone could lose 80% of its market share in just a few months after a generic launch, which could happen as early as next week.

SOURCE: MMIT Analytics, as of 2/6/19

Datapoint: Roche Faces Steeper Oncology Competition With Third Biosimilar Approval

January 28, 2019

The FDA last week approved Samsung Bioepis’s Ontruzant, a biosimilar to Roche’s Herceptin, a breast cancer treatment that is among the pharma company’s top sellers. 12% of all covered lives currently have access to Herceptin on the preferred tier, while another 7% have preferred access after prior authorization/step therapy. The FDA has approved two other Herceptin biosimilars in recent years, Celltrion and Teva’s Herzuma, and Mylan’s Ogivri, though neither of them have launched. Roche’s U.S. patent for Herceptin is set to expire this June.

The FDA last week approved Samsung Bioepis’s Ontruzant, a biosimilar to Roche’s Herceptin, a breast cancer treatment that is among the pharma company’s top sellers. 12% of all covered lives currently have access to Herceptin on the preferred tier, while another 7% have preferred access after prior authorization/step therapy. The FDA has approved two other Herceptin biosimilars in recent years, Celltrion and Teva’s Herzuma, and Mylan’s Ogivri, though neither of them have launched. Roche’s U.S. patent for Herceptin is set to expire this June.

SOURCE: MMIT Analytics, as of 1/25/19