Radar on Drug Benefits

Maine MCOs Show Concern about New Prescription Drug Reform Laws

July 15, 2019

Maine is “forging new ground” with its recent enactment of a comprehensive prescription drug reform legislative package, the National Academy for State Health Policy says. The Pine Tree State, however, is not alone in its efforts. NASHP reports that 47 states had filed 269 bills to control prescription drug costs as of July 7 — with 46 such laws enacted this year in 29 states.

Maine Gov. Janet Mills, a Democrat, on June 24 signed into law four bills to:

By Judy Packer-Tursman

Maine is “forging new ground” with its recent enactment of a comprehensive prescription drug reform legislative package, the National Academy for State Health Policy says. The Pine Tree State, however, is not alone in its efforts. NASHP reports that 47 states had filed 269 bills to control prescription drug costs as of July 7 — with 46 such laws enacted this year in 29 states.

Maine Gov. Janet Mills, a Democrat, on June 24 signed into law four bills to:

✦Set up a wholesale prescription drug importation program with approval from HHS.

✦Create a Prescription Drug Affordability Review Board.

✦Further expand drug price transparency.

“The Maine bill goes beyond other states’ transparency bills because it requires reporting from each entity in the supply chain about past and projected costs and revenues at the individual drug level,” NASHP says.

✦Prohibit PBMs from retaining rebates paid by prescription drugmakers, requiring those rebates to be passed along to the consumer or the health plan.

Maine Association of Health Plans Executive Director Katherine Pelletreau said in comments emailed July 10 that the group “shares the concerns about the rising cost of prescription drugs, but remains concerned these bills avoid addressing the root causes of the problem — the list prices set by manufacturers.”

“These new laws may have unintended consequences for consumers and insurers,” says Pelletreau. “While we appreciate the legislature’s intent, the high cost of prescription drugs will likely persist as these bills focused largely on the distribution and health insurance coverage for drugs, rather than the manufacturing and price setting process.”

New York Bill Targets Pricing Transparency from PBMs

July 1, 2019

Lawmakers in New York this month approved wide-ranging legislation designed to require pricing transparency from PBMs and to eliminate key PBM practices. But the bill could potentially limit plans’ ability to respond to pricing moves by manufacturers, one consultant says.

The New York bill (S.B. 6531) would require that PBMs disclose key pricing and rebate information and pass through all rebates and discounts to the plans and payers, and that they act in the best interests of the covered individual and the health plan or provider.

By Jane Anderson

Lawmakers in New York this month approved wide-ranging legislation designed to require pricing transparency from PBMs and to eliminate key PBM practices. But the bill could potentially limit plans’ ability to respond to pricing moves by manufacturers, one consultant says.

The New York bill (S.B. 6531) would require that PBMs disclose key pricing and rebate information and pass through all rebates and discounts to the plans and payers, and that they act in the best interests of the covered individual and the health plan or provider.

The New York Health Plan Association, which did not support the legislation, is particularly concerned with the “best interests” section, which imposes a fiduciary relationship on PBMs “in all but name,” says Ashley Stuart, director of government affairs for the association.

The legislation also would prohibit mid-year formulary changes and drug substitutions, and it would require PBMs operating in the state to be licensed beginning next year.

Josh Golden at Arthur J. Gallagher & Co.’s Solid Benefit Guidance says, “formulary strategies are designed to help keep drug costs in check. In moving forward with this legislation, the state potentially limits the ability of health plans to apply pricing pressure on pharmaceutical manufacturers throughout the year.”

More generally, the legislation will lead to higher health insurance premiums for employers and consumers, warned New York Health Plan Association President and CEO Eric Linzer in a statement.

The legislation comes at a time when several states are considering efforts to rein in PBMs. “At least four or five states are looking at the impact of Medicaid [pharmacy benefit] price transparency,” says Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors. “It goes back to the larger fundamental conversation of what states should be looking at — they recognize there’s money under the table, especially in the PBM space.”

Magellan Rx Initiates Oncology Biosimilars Program

June 19, 2019

Magellan Rx Management, the PBM division of Magellan Health, Inc., on June 4 announced its launch of an oncology biosimilars program, preparing its health plan customers for the expected market entry of biosimilars for three cancer-fighting drugs — Herceptin, Rituxan and Avastin — later this year.

“Oncology is by far the largest therapeutic area for drug spend on the medical benefit, and it is even higher in Medicare,” Steve Cutts, senior vice president and general manager for Magellan Rx’s specialty drug unit, tells AIS Health. Thus, he says, the PBM will be focusing the oncology biosimilars program “on all lines of business for our clients.”

By Judy Packer-Tursman

Magellan Rx Management, the PBM division of Magellan Health, Inc., on June 4 announced its launch of an oncology biosimilars program, preparing its health plan customers for the expected market entry of biosimilars for three cancer-fighting drugs — Herceptin, Rituxan and Avastin — later this year.

“Oncology is by far the largest therapeutic area for drug spend on the medical benefit, and it is even higher in Medicare,” Steve Cutts, senior vice president and general manager for Magellan Rx’s specialty drug unit, tells AIS Health. Thus, he says, the PBM will be focusing the oncology biosimilars program “on all lines of business for our clients.”

The three oncology brand drugs together account for $9 billion in U.S. drug sales, and almost $50 million in annual drug spend per 1 million covered commercial lives, Magellan Rx says. The PBM anticipates savings of $5 million to $8 million per 1 million covered lives via its new program but sees “potential for even greater savings based on [its] past successes with biosimilars.”

Under a multi-pronged program, Magellan Rx aims to develop clinical protocols while educating and communicating with network oncologists; incorporate biosimilars into key utilization management programs, such as medical prior authorization and provider reimbursement/fee schedule management; and work continuously with its oncology advisory board.

Cutts notes that Herceptin, Rituxan and Avastin “all have FDA approved biosimilars which are due to be launched and available on the market in 2019, with some speculated to be available as soon as this month.”

Payers Are Wary as First NASH Drugs May Hit U.S. Market Soon

June 17, 2019

Doctors trying to treat patients with nonalcoholic steatohepatitis (NASH) — a serious type of nonalcoholic fatty liver disease (NAFLD) that, if left untreated, may progress to cardiovascular disease, cirrhosis, cancer and possibly the need for a liver transplant — soon may have new options in their arsenal beyond promoting exercise and diet. The first-ever NASH drugs are expected to hit the U.S. market as early as 2020 to help address this increasingly prevalent, complex disease spawned largely by the obesity epidemic and surge of type 2 diabetes in the U.S.

By Judy Packer-Tursman

Doctors trying to treat patients with nonalcoholic steatohepatitis (NASH) — a serious type of nonalcoholic fatty liver disease (NAFLD) that, if left untreated, may progress to cardiovascular disease, cirrhosis, cancer and possibly the need for a liver transplant — soon may have new options in their arsenal beyond promoting exercise and diet. The first-ever NASH drugs are expected to hit the U.S. market as early as 2020 to help address this increasingly prevalent, complex disease spawned largely by the obesity epidemic and surge of type 2 diabetes in the U.S.

Dieterich says the entry of first-ever NASH medications will “definitely” offer significant benefit to patients. “There’s no question [the drugs will help] — in combination with diet and exercise,” says Douglas Dieterich, M.D., director of the Institute for Liver Medicine at Mount Sinai Health System. “It will have to be the whole package.”

Multiple drugs are in phase 3 clinical trials for NASH. A front-runner is Intercept Pharmaceuticals, Inc.’s drug, Ocaliva (obeticholic acid), already on the market to treat another liver condition. But the FDA isn’t expected to approve Intercept’s drug for NASH until the second quarter of 2020, Dieterich notes.

Dieterich says he expects NASH medications will “undoubtedly” be marketed as specialty drugs that will be “strictly controlled” by PBMs and insurance companies. He expects such drugs to become available only to the sickest patients, possibly only after a diagnostic liver biopsy is performed.

From a plan perspective, Yusuf Rashid, R.Ph., vice president of pharmacy and vendor relationship management at Community Health Plan of Washington, says NASH “has similarities to other recent new breakthrough therapies where the outcome we are trying to avoid is costly and potentially fatal but not all patients…will even progress to fibrosis. The reason why NASH is more significant is the sheer number of patients that may qualify for treatment.”

CMS Pulls Back on Key Drug Pricing Proposals

May 29, 2019

When CMS issued the final rule on Medicare Advantage and Part D drug pricing on May 16, the agency touted its policy changes as ensuring consumers get greater transparency into the cost of Part D prescription drugs and enabling MA plans to negotiate better prices for physician-administered medicines in Part C. Yet, after receiving 4,000-plus comments related to pharmacy price concessions on negotiated price, CMS held back, saying it won’t implement this policy for 2020 — or follow through on proposed exceptions to Part D protected drug classes.

By Judy Packer-Tursman

When CMS issued the final rule on Medicare Advantage and Part D drug pricing on May 16, the agency touted its policy changes as ensuring consumers get greater transparency into the cost of Part D prescription drugs and enabling MA plans to negotiate better prices for physician-administered medicines in Part C. Yet, after receiving 4,000-plus comments related to pharmacy price concessions on negotiated price, CMS held back, saying it won’t implement this policy for 2020 — or follow through on proposed exceptions to Part D protected drug classes.

Among numerous provisions, CMS’s final rule implements the statutory prohibition against gag clauses in pharmacy contracts, barring Part D plans from penalizing pharmacies that disclose a lower cash price to enrollees. But the agency decided against implementing a policy redefining negotiated price as the lowest possible, baseline payment to pharmacies.

Leerink analyst Ana Gupte sees industry winners across the board. CMS “did not follow through on its proposal to exclude certain protected drug classes, offering a win for the biopharma industry,” she said in a May 17 note. “Managed Care and PBMs also garnered a win as CMS did not follow through on the proposals to pass through pharmacy pricing concessions in the form of DIR [direct and indirect remuneration] fees to patients through reduced cost sharing.”

Dea Belazi, Pharm.D., president and CEO of AscellaHealth, offers a blunter assessment. “I think the final Part D rule is more rhetoric than anything,” he tells AIS Health.

As for negotiated price, “They’re not ready to do anything on pricing at this point,” Belazi says. “I think CMS, with HHS, opened up a Pandora’s box and realized this is not as easy as it seems and they need more time.”