Radar on Drug Benefits

Payers, PBMs Play Crucial Roles in COVID-19 Vaccine Distribution

September 28, 2020

As the pharmaceutical industry hurtles toward completing a COVID-19 vaccine, payers and PBMs have begun to draft vaccine distribution plans based on emerging guidance from federal public health leaders.

The National Academies of Sciences, Engineering and Medicine has initiated formal discussion of vaccine distribution, soliciting four days of public comment on its Sept. 1 Discussion Draft of the Preliminary Framework for Equitable Allocation of COVID-19 Vaccine.

The framework suggests three phases of vaccine distribution:

By Peter Johnson

As the pharmaceutical industry hurtles toward completing a COVID-19 vaccine, payers and PBMs have begun to draft vaccine distribution plans based on emerging guidance from federal public health leaders.

The National Academies of Sciences, Engineering and Medicine has initiated formal discussion of vaccine distribution, soliciting four days of public comment on its Sept. 1 Discussion Draft of the Preliminary Framework for Equitable Allocation of COVID-19 Vaccine.

The framework suggests three phases of vaccine distribution:

✦ Group 1a: “High risk workers in health care facilities” and “first responders”;
✦ Group 1b: “People with significant comorbid conditions,” and “older adults in congregate or overcrowded settings”;
✦ Group 2: “Critical risk workers (part 1),” “teachers and school staff,” “people with moderate comorbid conditions,” “all older adults,” “people in homeless shelters or group homes,” and “incarcerated/detained people and staff”;
✦ Group 3: “Young adults,” “children,” and “critical risk workers (part 2)”.

During a Sept. 17 session of the America’s Health Insurance Plans National Conference on Medicare, Medicaid & Dual Eligibles, AHIP Senior Vice President of Clinical Innovation Kate Berry said state and federal public health officials will likely manage the first two phases, but she added that plans should expect to get involved in the third phase.

Berry said coordination and data sharing between public officials and plans will be essential to ensuring a fair and orderly vaccine distribution process, especially since some of the vaccine candidates in late stages of development will require a booster. She also indicated that the looming medical data interoperability rules, which mandate payers, providers and government stakeholders share patients’ medical history with each other via secure data clearinghouses by January 2022, will play a role in validating which patients get vaccines at what time.

During a Sept. 15 panel at AHIP’s online conference, Sree Chaguturu, M.D., chief medical officer of CVS Health Corp.’s Caremark PBM, said he does not expect his firm to employ any utilization management tactics during the initial stages of vaccine rollout, though he later observed that PBMs and plans might eventually manage formularies to direct members away from first-generation vaccines to more effective drugs. He also observed that payers and PBMs should gather as much data as they can about the efficacy of vaccines in order to ensure that the right medication is delivered to the right populations in the future, when COVID-19 vaccines become a routine inoculation.

Prime Therapeutics Introduces Real Time Benefit Tool

September 16, 2020

With the deadline approaching for Medicare Part D plans to implement a Real Time Benefit Tool (RTBT) — which informs prescribers when lower-cost alternative therapies are available under a beneficiary’s drug benefit — Prime Therapeutics, LLC said on Sept. 2 that it is rolling out a tool that will meet the new requirements.

In addition to showing a drug’s price, the Real Time Benefit Check tool displays lower-cost and therapeutically equivalent alternatives to any given drug, breaks down costs based on a member’s health plan formulary, and alerts a prescriber if a drug requires prior authorization.

By Leslie Small

With the deadline approaching for Medicare Part D plans to implement a Real Time Benefit Tool (RTBT) — which informs prescribers when lower-cost alternative therapies are available under a beneficiary’s drug benefit — Prime Therapeutics, LLC said on Sept. 2 that it is rolling out a tool that will meet the new requirements.

In addition to showing a drug’s price, the Real Time Benefit Check tool displays lower-cost and therapeutically equivalent alternatives to any given drug, breaks down costs based on a member’s health plan formulary, and alerts a prescriber if a drug requires prior authorization.

To develop its new tool, Prime conducted a 14-month pilot with multiple vendors, including DrFirst, which created the myBenefitCheck tool that the PBM decided to release first.

After processing 700,000 transactions among 25,000 prescribers, Prime calculated an average annual savings of $692 for each prescription that was changed as a result of using the tool. One Blues plan involved in the pilot “realized a total estimated savings due to alternate drug choices of $348,000 from April 2019 to March 2020,” stated a news release from the PBM.

Prime’s new Real Time Benefit Check tool will fulfill its obligations under the Medicare Advantage and Part D Drug Pricing Final Rule, which was issued in May 2019 and requires each Part D health plan to adopt one or more RTBTs that can integrate with at least one prescriber’s ePrescribing system or electronic health record system starting Jan. 1, 2021. In addition to Prime’s Part D members, the Real Time Benefit Check tool will also be available to the PBM’s commercial members.

Matt Kazan, a principal at Avalere Health, says that initially the new RTBT requirement was slated to go into effect in 2020, but CMS pushed back the deadline one year in response to some industry stakeholders’ concerns over readiness.

“Generally speaking, larger organizations had a system in place…and CMS is allowing them to utilize that,” says Kazan. “I think more of the concern was from maybe smaller, midsized organizations that didn’t have their own system ready to go.”

However, “time has lapsed since that final rule, so I’ve heard less about major concerns about the upcoming deadline,” he adds.

Trump’s International Drug Pricing Order Is Still Missing; Rebate Order Draws Fire

September 14, 2020

A promised executive order that would tie drug prices to their costs in other countries has yet to emerge, although President Donald Trump has promoted the order as part of his re-election campaign. Meanwhile, payers and PBMs are continuing to push back against three executive orders the Trump administration issued in July with the intention of lowering drug prices, one of which would overhaul the Medicare Part D prescription drug rebate system.

“I think the purpose of these executive orders is to give the president some talking points going into the debates,” says Avalere Health founder Dan Mendelson. He adds that, regardless of their purpose, the orders will not make a difference in the real world any time soon.

By Peter Johnson

A promised executive order that would tie drug prices to their costs in other countries has yet to emerge, although President Donald Trump has promoted the order as part of his re-election campaign. Meanwhile, payers and PBMs are continuing to push back against three executive orders the Trump administration issued in July with the intention of lowering drug prices, one of which would overhaul the Medicare Part D prescription drug rebate system.

“I think the purpose of these executive orders is to give the president some talking points going into the debates,” says Avalere Health founder Dan Mendelson. He adds that, regardless of their purpose, the orders will not make a difference in the real world any time soon.

Administration officials indicated during the rollout of the executive orders on July 24 that the international pricing order would be released within 30 days of the debut of the other three drug pricing orders. Yet the deadline passed and the administration at press time had not released the promised order.

Meanwhile, the executive orders that actually have been released are being criticized from stakeholders across health care. The order that would remove safe harbor protections from the Anti-Kickback Statute for prescription drug rebates in Medicare Part D has been panned even by conservatives.

Alex Brill, a resident fellow at the American Enterprise Institute (AEI), penned a white paper sponsored by PBM trade group Pharmaceutical Care Management Association (PCMA) that concluded the executive order would “restrict an important tool for providing savings to the federal government and Medicare Part D beneficiaries. Moreover, net drug costs and drug company revenues would rise significantly if the Medicare Part D safe harbor for rebates is eliminated.”

Mendelson says that the pharmaceutical industry is beginning to realize that it will have to change its business model one way or another.

“The pharmaceutical industry is facing a real pivot point where there are going to have to be more innovative ways to price for these products,” Mendelson observes. “…it’s really important that the industry start to figure out ways to engage positively with payers. And the government is the biggest payer.”

USPS Delivery Slowdown Is Unlikely to Cause Major Rx Fill Disruption

August 31, 2020

The recent, sudden disruption of U.S. Postal Service (USPS) deliveries has caused concern about people receiving their medications later than they normally would. While news reports and statements by lawmakers indicate that many Americans have lost prescriptions in the mail or received them late, drug benefit and supply chain experts say the disruption to the most vulnerable patients served by specialty and mail order pharmacies should be minimal.

An Aug. 24 Axios-Ipsos poll shows that one in five Americans received medication through the mail during the preceding week. One in four of that group, or 5% of Americans overall, didn’t receive their medication or got it late.

By Peter Johnson

The recent, sudden disruption of U.S. Postal Service (USPS) deliveries has caused concern about people receiving their medications later than they normally would. While news reports and statements by lawmakers indicate that many Americans have lost prescriptions in the mail or received them late, drug benefit and supply chain experts say the disruption to the most vulnerable patients served by specialty and mail order pharmacies should be minimal.

An Aug. 24 Axios-Ipsos poll shows that one in five Americans received medication through the mail during the preceding week. One in four of that group, or 5% of Americans overall, didn’t receive their medication or got it late.

In addition, PBMs have not reported significant disruption to their supply chains.

“Most of the drugs shipped from a mail order pharmacy — a non-specialty pharmacy — you worry about them being perishable, but they tend to be pretty stable. They’re oral pills, things like that,” says Mike Schneider, a principal at Avalere Health.

Schneider also suggests that mail order pharmacies’ longer fills, which typically keep shipping costs down by filling for 90 days or more, should insulate patients from major disruptions. He adds that most mail order medication businesses also build logistical complications into their shipping schedules.

Omar Hafez, a principal at Avalere and a former supply chain executive at specialty pharmacy McKesson Specialty Health, says that time- and temperature-sensitive therapies have very specific delivery windows that are mandated by law. He says the strict requirements mean that the bulk of the supply chain for temperature-sensitive specialty drugs is managed by specialized logistics firms, not the USPS.

Schneider says the pharmacy supply chain as a whole has proved remarkably resilient over the course of 2020 — despite the tumult caused by the pandemic and the USPS brouhaha.

“I think a lot of supply chain issues never really materialized, at least not to my knowledge,” Schneider says. “There are a certain drugs that have shortages, but nothing that seemed like it was a national emergency. I think part of the reduced supply might have been everybody was going and filling their prescriptions as the virus was hitting, and everybody was getting some longer-term fills.”

COVID-19 Pandemic Amps Up Interest in Home Care

August 19, 2020

As visits to hospitals and outpatient clinics have become sources of anxiety for patients worried about exposure to the novel coronavirus, plans and providers alike have begun to make major investments in home care.

Humana Inc., for example, recently announced a $100 million investment in home primary care startup Heal Inc. Heal CEO Nick Desai says his company will aid Humana’s long-term strategy to reduce the cost of care and improve quality.

By Peter Johnson

As visits to hospitals and outpatient clinics have become sources of anxiety for patients worried about exposure to the novel coronavirus, plans and providers alike have begun to make major investments in home care.

Humana Inc., for example, recently announced a $100 million investment in home primary care startup Heal Inc. Heal CEO Nick Desai says his company will aid Humana’s long-term strategy to reduce the cost of care and improve quality.

Heal’s model places patients with a consistent primary care physician who makes house calls. The doctors are dispatched and routed using an app and driven to visits with a medical assistant, and they input notes and update care plans into an electronic health record between visits.

“Our doctors are paid on a salary basis, so they don’t worry about the billing,” Desai explains. “They have incentives and bonuses for delivering quality, but never for seeing more patients. We’re fundamentally economically aligned around the delivery of value, not volume.”

Where payers will find significant appeal in home care is in reducing the duration and number of inpatient visits, says Ashraf Shehata, KPMG national sector leader for health care and life sciences.

Shehata says that building home care capacity will give plans more flexibility to meet patients on their own terms and could improve outcomes in a post-acute context. Still, he suggests that there are substantial barriers to scaling up home care to that level. Those include regulatory standards, including special certifications that are required for licensed home care providers. He also notes lagging EHR interoperability impedes the flow of information between home care providers and other parts of the health care system.

COVID-19 has thrown a bright light on existing incentives for hospital systems to reduce inpatient stays. In the spring, Utah-based integrated health system Intermountain Healthcare launched a pilot program to move post-acute patients and low-acuity emergency patients to home care.

Nick Bassett, vice president for population health services at Intermountain subsidiary Castell, says the pilot is tied to health system’s longer-term value-based care strategy. He adds that the pilot has shown promising savings — mainly from reducing the physical plant and staffing costs of a hospital stay.