Current TRICARE Contracts at a Glance

October 18, 2019

The Defense Health Agency started planning for the “future generation of managed care contracts” for TRICARE, the program that provides health care benefits to military service members, retirees and their families. Currently, Health Net Federal Services LLC, a subsidiary of Centene Corp., covers the West region with about 3.1 million beneficiaries, and Humana Military Healthcare Services Inc., a subsidiary of Humana Inc., covers the East region with more than 6.8 million enrollees.

by Jinghong Chen

The Defense Health Agency started planning for the “future generation of managed care contracts” for TRICARE, the program that provides health care benefits to military service members, retirees and their families. Currently, Health Net Federal Services LLC, a subsidiary of Centene Corp., covers the West region with about 3.1 million beneficiaries, and Humana Military Healthcare Services Inc., a subsidiary of Humana Inc., covers the East region with more than 6.8 million enrollees. The map below details the current number of TRICARE beneficiaries in each state and Washington, D.C.

NOTE: Parts of Texas are covered by Centene Corp., while parts of Missouri are covered by Humana Inc.

SOURCE: Defense Health Agency. Visit https://tricare.mil/About/Regions.

Drug Giants Close In on a $50 Billion Settlement of Opioid Cases

October 17, 2019

The nation’s three largest drug distributors and two manufacturers have agreed with multiple states on a framework to resolve thousands of opioid cases with a settlement worth nearly $50 billion in cash and addiction treatments, according to three people familiar with the negotiations.

The agreement would release AmerisourceBergen, Cardinal Health and McKesson Corporation, which together distribute about 90 percent of the country’s medicines, along with Johnson & Johnson and Teva, the Israel-based manufacturer of generic drugs, from a rapidly growing list of more than 2,300 lawsuits that they face in federal and state courts.

The nation’s three largest drug distributors and two manufacturers have agreed with multiple states on a framework to resolve thousands of opioid cases with a settlement worth nearly $50 billion in cash and addiction treatments, according to three people familiar with the negotiations.

The agreement would release AmerisourceBergen, Cardinal Health and McKesson Corporation, which together distribute about 90 percent of the country’s medicines, along with Johnson & Johnson and Teva, the Israel-based manufacturer of generic drugs, from a rapidly growing list of more than 2,300 lawsuits that they face in federal and state courts.

Although the states have agreed in principle to the framework, cities and counties across the country have not yet fully embraced it, said lawyers for a committee that represents thousands of municipal governments. They are seeking more information about how the money will be distributed, whether it will be directed to relief measures or end up in general funds for state legislatures, and “when they could expect the financial support to start,” the lawyers said in a statement….

Read the full The New York Times article

Datapoint: Kaiser Scores Big in 2020 Star Ratings

October 17, 2019

Among the top Medicare Advantage insurers, Kaiser Foundation Health Plan and its regional subsidiaries fared particularly well in CMS’s 2020 star ratings release, with 94.3% of its Medicare Advantage-Prescription Drug Plan (MA-PD) members enrolled in products with an overall five-star rating. Kaiser’s group of regional managed care organizations currently serve 1,653,312 MA-PD lives.

Among the top Medicare Advantage insurers, Kaiser Foundation Health Plan and its regional subsidiaries fared particularly well in CMS’s 2020 star ratings release, with 94.3% of its Medicare Advantage-Prescription Drug Plan (MA-PD) members enrolled in products with an overall five-star rating. Kaiser’s group of regional managed care organizations currently serve 1,653,312 MA-PD lives.

Source: AIS’s Directory of Health Plans

Would Drug Pricing Legislation Impact Innovation?

October 17, 2019

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

By Angela Maas

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

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

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

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

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

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

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

Sutter Health, California Settle Antitrust Case Just Before Start of Trial

October 16, 2019

Sutter Health has reached an agreement to settle a class-action lawsuit brought by thousands of employers, and later joined by California Attorney General Xavier Becerra, that sued the health care system for allegedly abusing its market power to raise prices for consumers.

The details of the settlement are confidential. Court hearings for preliminary approval of the agreement will likely take place in February or March, said San Francisco Superior Judge Anne-Christine Massullo, who is overseeing the case.

Sutter Health has reached an agreement to settle a class-action lawsuit brought by thousands of employers, and later joined by California Attorney General Xavier Becerra, that sued the health care system for allegedly abusing its market power to raise prices for consumers.

The details of the settlement are confidential. Court hearings for preliminary approval of the agreement will likely take place in February or March, said San Francisco Superior Judge Anne-Christine Massullo, who is overseeing the case.

The agreement was announced Wednesday just as the case was nearing trial and attorneys were preparing to present opening statements to jurors….

Read the full The San Francisco Chronicle article