Radar on Drug Benefits

Private Payers Aren’t Yet Sold on Vraylar for Bipolar Disorder

April 1, 2020

A recently approved brand drug for bipolar disorder will have little impact on how health plans cover these medications, experts say. Health plans will continue to encourage the use of less expensive generic bipolar drugs.

The brand drug, Allergan plc’s Vraylar (cariprazine), was approved by the FDA to treat depressive episodes associated with bipolar 1 disorder in adults. It is an oral, once-daily atypical antipsychotic.

By Bronwyn Mixter

A recently approved brand drug for bipolar disorder will have little impact on how health plans cover these medications, experts say. Health plans will continue to encourage the use of less expensive generic bipolar drugs.

The brand drug, Allergan plc’s Vraylar (cariprazine), was approved by the FDA to treat depressive episodes associated with bipolar 1 disorder in adults. It is an oral, once-daily atypical antipsychotic.

There are other medications approved to treat the same conditions as Vraylar, including generic drugs, Mesfin Tegenu, R.Ph., president of PerformRx, tells AIS Health. Vraylar is typically not a preferred option since it is a newer, branded and more expensive agent, and more cost-effective alternatives are available, he says.

However, non-formulary drugs are available to those who have a demonstrated medical need. “There can be adherence issues with this disease and at times there is a need for longer acting agents to improve adherence,” Tegenu says.

Health plans employ several utilization management techniques for bipolar drugs, according to Tegenu. Some examples include prior authorization, duplicate therapy edits, age restrictions and step therapy.

For Vraylar, health plans will use prior authorization or steps to encourage the use of a generic bipolar drug first, Michael Schneider, a principal at Avalere Health, tells AIS Health. There also could be some higher out-of-pocket costs for Vraylar even when compared to some of the other branded antipsychotic drugs.

Vraylar is in a protected drug class on the Medicare side, Schneider says. Because it is the first brand drug of a particular chemical entity, plans have to cover it. In some Medicare plans, Vraylar is disadvantaged because even through it is in a protected class, there are still utilization management techniques placed on the product, as well as higher cost sharing, he says.

In Medicaid, many states require all the antipsychotic bipolar drugs to be on the formulary with no utilization management, Schneider adds.

Congress Could Pass Medicare Part D Reform Even Amid COVID-19 Outbreak

March 30, 2020

With the federal government consumed by responding to the COVID-19 outbreak, the possibility of Congress passing drug-pricing legislation might seem dim. But analysts say it’s very possible that something like an overhaul of the Medicare Part D benefit could still make its way into legislation that federal lawmakers pass in the coming weeks or months to address the ongoing public health crisis.

Congress’ latest coronavirus-related stimulus package, which is worth more than $2 trillion, also contains provisions that would extend some Medicare and public health funding.

By Leslie Small

With the federal government consumed by responding to the COVID-19 outbreak, the possibility of Congress passing drug-pricing legislation might seem dim. But analysts say it’s very possible that something like an overhaul of the Medicare Part D benefit could still make its way into legislation that federal lawmakers pass in the coming weeks or months to address the ongoing public health crisis.

Congress’ latest coronavirus-related stimulus package, which is worth more than $2 trillion, also contains provisions that would extend some Medicare and public health funding. That’s important for those watching drug-price reform because, when Congress failed to include measures addressing surprise medical billing or drug pricing in the budget bill it passed in December, many expected those issues to be addressed in legislation passed by a May 22 deadline to renew certain health care “extenders.”

However, just because the latest stimulus bill wiped out the May deadline, it doesn’t preclude the possibility of Congress passing other health care legislation in the near future that could be a vehicle for drug-pricing measures, Matt Kazan, a principal at Avalere Health, tells AIS Health.

In fact, because so many Americans will be struggling economically in the coming months, the calls for the Trump administration and lawmakers to increase drug affordability will only get “louder and louder,” Andrew Baum, the head of global health care research at Citi, said during a March 24 call with analysts about the effect of the coronavirus on the health care sector.

And it appears that the drug-pricing measure with the greatest chance of passing is an overhaul of the Medicare Part D benefit, Miryam Frieder, a practice director at Avalere Health, said during a recent webinar hosted by the consultancy. It’s the one provision in drug-pricing legislation Congress has considered in the past year that both political parties largely agree on, she pointed out.

Michael Schneider, a principal at Avalere, added that Part D plans need to be prepared for the benefit to get a makeover.

“This is just going to mean that plans are going to have to look at their membership and some other factors and start to decide how they’re going to overcome that additional liability without premiums going through the roof,” Schneider said.

COVID-19 Outbreak Could Impact Drug Supply Long-Term

March 18, 2020

Industry experts say the COVID-19 outbreak is unlikely to limit U.S. drug supplies in the short or middle term. However, they tell AIS Health that increased demand for longer-duration stocks of medication from self-isolating patients could strain supplies going forward.

“We are told at this point that we’re not seeing any [drug] shortages in the marketplace today,” says Kelly McGrail-Pokuta, Prime Therapeutics’ vice president of pharmaceutical trade.

By Peter Johnson

Industry experts say the COVID-19 outbreak is unlikely to limit U.S. drug supplies in the short or middle term. However, they tell AIS Health that increased demand for longer-duration stocks of medication from self-isolating patients could strain supplies going forward.

“We are told at this point that we’re not seeing any [drug] shortages in the marketplace today,” says Kelly McGrail-Pokuta, Prime Therapeutics’ vice president of pharmaceutical trade.

On Feb. 27, FDA Commissioner Stephen Hahn released a statement that said disruptions to the pharmaceutical supply chain have been minimal so far. The statement also said that the FDA was especially focused on 20 manufacturers that are particularly dependent on operations in China, and found that “none of these firms have reported any shortage to date.”

But on March 10, the FDA postponed all inspections of overseas drug manufacturing facilities “through April, effective immediately,” according to another statement released by Hahn.

During a pandemic, the CDC recommends anyone taking prescription medication to manage a chronic condition keep an expanded supply of their medicine on hand. As more people self-isolate, and consumers seek to spend less time in stores and other public places, demand for backup medication is likely to increase.

Mike Schneider, a principal at Avalere Health who previously worked for CVS Caremark, says PBMs and payers will have to rethink their typical posture toward chronic medication as enrollees stock up in anticipation of self-isolation.

“Hopefully, with everything going on related to coronavirus and people wanting to stock up, those quantity limits would be eased or eliminated for the most part for chronic meds,” says Schneider.

The Blue Cross Blue Shield Association’s “network of 36 independent and locally operated” affiliates have all decided to waive prescription refill limits on maintenance medications, according to America’s Health Insurance Plans. Other non-Blues insurers have also taken steps to allow members to refill prescriptions in advance.

Experts say it’s difficult to know whether the drug supply will be affected down the road. Schneider says consumer stockpiling and the FDA’s move to suspend foreign inspections could both make an impact on future supply.

Insurers, Pharma Spar Over Copay Accumulator Provision

March 16, 2020

Health insurers are praising a provision in a recently proposed regulation that gives commercial plans greater leeway to run so-called copay accumulator programs, which prevent drug manufacturer coupons from counting toward patients’ annual deductibles or out-of-pocket cost limits. But the pharmaceutical industry slammed the proposal as “misguided” and liable to prevent patients from getting vital medications.

By Leslie Small

Health insurers are praising a provision in a recently proposed regulation that gives commercial plans greater leeway to run so-called copay accumulator programs, which prevent drug manufacturer coupons from counting toward patients’ annual deductibles or out-of-pocket cost limits. But the pharmaceutical industry slammed the proposal as “misguided” and liable to prevent patients from getting vital medications.

“I do think these programs are here to stay, and I do think they will continue to grow in terms of the absolute numbers as we head into ’22 and beyond,” says Jayson Slotnik, a partner at Health Policy Strategies, LLC. From insurers’ point of view, copay accumulator programs help combat the perverse incentives that drug manufacturer coupons create: steering patients to pricey brand-name drugs by obscuring their true cost.

In its 2021 proposed Notice of Benefit and Payment Parameters, CMS clarifies that all non-grandfathered individual and group market health plans “have the flexibility to determine whether to include or exclude coupon amounts from the annual limitation on cost sharing, regardless of whether a generic equivalent is available.”

To America’s Health Insurance Plans, it’s important to allow the use of copay accumulator programs even for drugs that don’t have a generic version in order to spur competition between branded drugs that can treat the same condition. “Drug manufacturers recognize this and spend billions of dollars to dilute the impact of competition by providing coupons for brand drugs that do not have a generic equivalent,” the trade group wrote in its comment letter about the proposed rule.

But the Pharmaceutical Research and Manufacturers of America (PhRMA) sees it very differently.

“It would compromise patients’ ability to adhere to prescribed medicines at a moment when insurance coverage for medicines continues to erode; it would put patient health and financial security in danger; it would run directly counter to the Administration’s stated policy of lowering patient out-of-pocket costs for prescription drugs; and it could undermine the appeal and availability of high-deductible health plans,” PhRMA wrote.

New Generic HIV Drug May Impact PrEP Coverage, Not HIV Coverage

March 4, 2020

A generic version of Truvada coming on the market later this year will affect how payers cover pre-exposure prophylaxis (PrEP), but it will not significantly change how payers cover HIV drugs, experts tell AIS Health.

Gilead Sciences, Inc.’s Truvada (emtricitabine/tenofovir disoproxil fumarate) was approved by the FDA in 2004 to treat HIV infection in combination with other antiretroviral drugs. In 2012, it also was approved as the first drug for PrEP. In March 2019, Gilead announced that it had entered into an agreement with Teva Pharmaceutical Industries Ltd. to allow the company to launch its generic version on Sept. 30, 2020.

By Bronwyn Mixter

A generic version of Truvada coming on the market later this year will affect how payers cover pre-exposure prophylaxis (PrEP), but it will not significantly change how payers cover HIV drugs, experts tell AIS Health.

Gilead Sciences, Inc.’s Truvada (emtricitabine/tenofovir disoproxil fumarate) was approved by the FDA in 2004 to treat HIV infection in combination with other antiretroviral drugs. In 2012, it also was approved as the first drug for PrEP. In March 2019, Gilead announced that it had entered into an agreement with Teva Pharmaceutical Industries Ltd. to allow the company to launch its generic version on Sept. 30, 2020.

Payer coverage of PrEP also will be affected by a recommendation from the U.S. Preventive Services Task Force (USPSTF). In 2019, the USPSTF recommended PrEP therapy for those at high risk of HIV acquisition, according to a white paper written by Lynn Nishida, R.Ph., vice president of clinical product and contracting for WithMe Health.

“With the USPSTF recommendation, Medicaid expansion programs and health plans are going to have to cover PrEP without any cost sharing,” says Tim Horn, director of medication access and pricing at the National Alliance of State & Territorial AIDS Directors. Therefore, payers will move toward generic versions.

Dan Mendelson, founder and former CEO of consulting firm Avalere Health, says that whenever a drug goes generic, payers usually have a plan in place to make sure the generic is used. “The more expensive the drug, the more likely that the plan will be comprehensive and aggressive,” he says.

Since HIV is one of the six protected classes in the Medicare Part D program, Part D plans typically cover all HIV products, says Michael Schneider, principal at Avalere Health, as there is little to no rebating in the category. “So, there is really no incentive for the PBMs acting on behalf of their clients, the plans, to do anything in terms of a utilization management standpoint or negotiation standpoint outside of just bringing the generics on formulary.”

Most of the branded HIV products are in the Part D specialty tier, requiring coinsurance, due to their high cost. When a generic comes on the market, plans typically will remove the branded product and then place the generic in the specialty tier or the preferred brand tier depending on the cost of the generic product, he says.