Radar on Drug Benefits

Louisiana’s Hepatitis C ‘Netflix’ Model Sees Positive Results

December 18, 2019

Louisiana is off to a fast start on its new payment model aimed at getting costly but curative hepatitis C treatment to patients in Medicaid or incarcerated in state correctional facilities — via a “Netflix”-like, modified subscription service. More Louisiana residents received such treatment in the first 75 days of the new pact than in the entire fiscal year 2019, state officials said Dec. 5, and 2,290 people got treated between the program’s July 15 launch and Nov. 26.

by Judy Packer-Tursman

Louisiana is off to a fast start on its new payment model aimed at getting costly but curative hepatitis C treatment to patients in Medicaid or incarcerated in state correctional facilities — via a “Netflix”-like, modified subscription service. More Louisiana residents received such treatment in the first 75 days of the new pact than in the entire fiscal year 2019, state officials said Dec. 5, and 2,290 people got treated between the program’s July 15 launch and Nov. 26.

It’s all part of a five-year agreement worked out by the Louisiana Dept. of Health with Asegua Therapeutics, a subsidiary of Gilead Sciences, Inc., for an unrestricted amount of Asegua’s direct-acting antiviral medication, the authorized generic of Epclusa (sofosbuvir/velpatasvir), to treat patients in the designated populations.

“The payment model allows a payer — in this case, a state payer — to better manage its costs while maximizing the number of patients who can receive treatment. This is an underlying goal of managed care pharmacy practice,” Academy of Managed Care Pharmacy CEO Susan A. Cantrell, R.Ph., said in a statement to AIS Health.

Louisiana state health officials say they’re encouraged by the new program’s early treatment numbers, but this is a first step: the overarching goal is to eliminate hepatitis C statewide in Louisiana by 2024 among all residents.

To bolster its efforts toward statewide eradication of hepatitis C, the department launched a public awareness campaign the first week of December. Then on Dec. 10, agency officials announced a new collaboration with Walmart Inc., launching a pilot program of free hepatitis screenings in 10 Walmart stores until Feb. 1, 2020.

UnitedHealth Makes Deal to Buy Diplomat as Industry Consolidation Enters ‘Second Phase’

December 16, 2019

Diplomat Pharmacy, Inc., which has been in a tailspin amid mounting financial losses, agreed to a deal with UnitedHealth Group on Dec. 9 that will see the larger firm’s OptumRx division purchase the midsized specialty pharmacy provider/PBM.

Diplomat’s difficulties began to come into focus earlier this year, when the firm disclosed customer losses in its PBM business and “increased competitive pressure in the specialty market.” In August, Diplomat said it was “reviewing strategic alternatives” to maximize shareholder value.

By Leslie Small

Diplomat Pharmacy, Inc., which has been in a tailspin amid mounting financial losses, agreed to a deal with UnitedHealth Group on Dec. 9 that will see the larger firm’s OptumRx division purchase the midsized specialty pharmacy provider/PBM.

Diplomat’s difficulties began to come into focus earlier this year, when the firm disclosed customer losses in its PBM business and “increased competitive pressure in the specialty market.” In August, Diplomat said it was “reviewing strategic alternatives” to maximize shareholder value. Then on Dec. 9, UnitedHealth disclosed that it agreed to pay $4 per share for Diplomat’s outstanding stock and assume its debt. Equities analysts noted that Diplomat’s stock was trading at $5.81 as of market close on the Friday before the transaction was unveiled.

Adam Fein, Ph.D., CEO of Pembroke Consulting, Inc.’s Drug Channels Institute, says that “the specialty pharmacy market is reaching maturity, as PBMs and insurers dominate specialty drug dispensing channels.” Diplomat, he says, “was unable to navigate the industry’s evolution.”

“Diplomat’s sale at a bargain basement price signals that the shakeout is underway,” Fein adds. “Fewer new specialty pharmacies are starting up, the bigger companies are getting acquired, and market share is concentrating further with the biggest players.”

Ashraf Shehata, KPMG’s national sector leader for health care and life sciences, says that the purchase of Diplomat comes as the rivalry is intensifying between UnitedHealth and its two big consolidated rivals, CVS Health Corp. and Cigna Corp.

Now that those companies have completed major transactions to assemble their assets — with CVS buying health insurer Aetna and Cigna acquiring the PBM Express Scripts — “we’re kind of seeing what I call the second phase right now of the competition really heating up between the big players,” he says.

Growth continues to be the “name of the game” for those three companies, Shehata says, but it’s difficult to come by in an industry that’s already so consolidated. Because of that, “now you might see some growth on the edges” in the same vein as the UnitedHealth/Diplomat deal, he adds.

Highmark Reports Positive Results on OBC with AstraZeneca

December 5, 2019

Highmark recently said its outcomes-based contract (OBC) with AstraZeneca showed positive results for its commercial members with asthma and chronic obstructive pulmonary disease (COPD) taking Symbicort — to the point where the drug manufacturer didn’t have to pay back a rebate to the insurer.

Under Highmark’s year-long agreement with AstraZeneca, announced in April 2018, more than half of its commercial members taking Symbicort (budesonide and formoterol fumarate dihydrate) who had a primary diagnosis of asthma or COPD experienced stabilized or improved symptoms, the insurer says.

By Judy Packer-Tursman

Highmark recently said its outcomes-based contract (OBC) with AstraZeneca showed positive results for its commercial members with asthma and chronic obstructive pulmonary disease (COPD) taking Symbicort — to the point where the drug manufacturer didn’t have to pay back a rebate to the insurer.

Under Highmark’s year-long agreement with AstraZeneca, announced in April 2018, more than half of its commercial members taking Symbicort (budesonide and formoterol fumarate dihydrate) who had a primary diagnosis of asthma or COPD experienced stabilized or improved symptoms, the insurer says.

Overall, Highmark’s involvement in OBCs is growing rapidly. The insurer “will have 15 [such] contracts in place by January 2020 and we’re looking to do more,” says Kayse Reitmeyer, Pharm.D., Highmark’s manager of pharmaceutical manufacturer relations and rebate administration.

She explains that Highmark “has moved on to different types of contract designs” for OBCs, including medical outcomes-based agreements, where the manufacturer offers a design centered around a drug’s clinical trial results; “persistency” or medication adherence-based agreements to track whether members are continuing therapy; and total cost-of-care contracts that track both pharmacy and medical spend.

To date, Highmark has publicly disclosed two OBCs: a total cost-of-care design on Jardiance (empagliflozin), marketed by Boehringer Ingelheim Pharmaceuticals, Inc., and Eli Lilly and Co. for patients with diabetes; and a persistency and adherence-based design on Takeda Pharmaceuticals America, Inc.’s Entyvio (vedolizumab) for patients with irritable bowel syndrome, ulcerative colitis or Crohn’s disease, Reitmeyer says. Highmark expects to disclose two to three more OBCs in the next few months “and share some Jardiance results soon,” she says.

Looking ahead, Highmark “will have a total cost-of-care contract in respiratory, tracking per member per month [PMPM] or per member per year [PMPY], looking at all medical and pharmacy costs in a certain drug class,” Reitmeyer says.

As for Symbicort, Highmark is in discussions with AstraZeneca about evolving that contract, she adds.

New Acute Migraine Medications May Not Shake Up Formularies

December 4, 2019

New oral medications for acute migraine — one pending launch and two more that could be approved in the coming months — likely won’t shake up formulary coverage for a condition that’s largely treated by generic triptan medications, pharmacy benefit experts say.

Eli Lilly and Co. on Oct. 11 received FDA approval for its drug Reyvow (lasmiditan), an oral medication that’s the first serotonin (5-HT)1F receptor agonist to be approved for migraine. Meanwhile, Allergan on Nov. 19 said it’s on track for December FDA consideration of ubrogepant, an oral CGRP receptor antagonist for acute migraine. Biohaven Pharmaceuticals also has applied for FDA approval on its oral CGRP antagonist rimegepant.

By Jane Anderson

New oral medications for acute migraine — one pending launch and two more that could be approved in the coming months — likely won’t shake up formulary coverage for a condition that’s largely treated by generic triptan medications, pharmacy benefit experts say.

Eli Lilly and Co. on Oct. 11 received FDA approval for its drug Reyvow (lasmiditan), an oral medication that’s the first serotonin (5-HT)1F receptor agonist to be approved for migraine. Meanwhile, Allergan on Nov. 19 said it’s on track for December FDA consideration of ubrogepant, an oral CGRP receptor antagonist for acute migraine. Biohaven Pharmaceuticals also has applied for FDA approval on its oral CGRP antagonist rimegepant.

Mesfin Tegenu, R.Ph., president of PerformRx, doesn’t expect widespread uptake of Reyvow. “The launch of lasmiditan will likely not change the formulary status quo when it hits the market, as it most likely will become a niche medication for patients inadequately controlled on triptans, or for those who cannot take triptans,” Tegenu tells AIS Health. “This is primarily due to warnings on the label for driving impairment and central nervous system depression.”

PBMs could have the chance to consider how to handle Reyvow and ubrogepant soon, although it’s not clear how soon. Eli Lilly hasn’t yet set a launch date for Reyvow, while Allergan said it expects ubrogepant to be the first approved oral CGRP receptor antagonist for the acute treatment of migraine.

“As with any new product, [ubrogepant] will need to be analyzed as part of the class of drugs for this indication,” Tegenu says. “Since this is the first oral version of a CGRP antagonist, it does have some administration advantages over injectable products.”

Payers can implement utilization management programs that direct use of these new drugs to those who have failed or cannot tolerate triptans, says Nicole Kjesbo, principal clinical program pharmacist with Prime Therapeutics LLC. “Additionally, payers will consider exclusion strategies and potentially value-based contracts as a means to manage cost and appropriate therapy,” she says.

CVS Health, Cigna Tout Benefits of PBM-Insurer Integration

November 20, 2019

Cigna Corp. and CVS Health Corp. — organizations that both recently combined a PBM and a health insurance business — are striving to prove to investors that they’re seeing valuable benefits from such vertical consolidation.

Executives from CVS, which purchased Aetna Inc. in late 2018, during the company’s third-quarter 2019 earnings call said that having such a diversified enterprise is helping it win over PBM clients for its Caremark division.

By Leslie Small

Cigna Corp. and CVS Health Corp. — organizations that both recently combined a PBM and a health insurance business — are striving to prove to investors that they’re seeing valuable benefits from such vertical consolidation.

Executives from CVS, which purchased Aetna Inc. in late 2018, during the company’s third-quarter 2019 earnings call said that having such a diversified enterprise is helping it win over PBM clients for its Caremark division.

For the 2020 PBM selling season, “our focus was to go to market with a more integrated medical-pharmacy offering,” said Karen Lynch, CVS Health executive vice president and Aetna president, according to a transcript of the call from Thomson Reuters. To that end, she noted that Caremark saw “increased traction in overall pharmacy penetration” for its employer-sponsored business, particularly among Aetna’s existing medical-benefits clients.

While CVS has won $4.9 billion in gross new business during the 2020 PBM selling season, — up from the $3.8 billion that it previously projected — “net new business is projected to be down -$6.4B overall (vs. -$7.4B previously),” due to the loss of Centene Corp.’s business and other non-renewals, Citi Research analyst Ralph Giacobbe wrote in a Nov. 6 note.

Cigna, which purchased Express Scripts Holding Co. in 2018, said a major driver of its better-than-expected quarterly financial results was the performance of its health services segment, which includes its PBM business. That book of business reported pretax operating earnings of $1.4 billion, which beat Wall Street’s consensus of $1.36 billion and far surpassed the $67 million it earned in the third quarter of 2018 — before Cigna’s purchase of Express Scripts closed.

“We were most encouraged by the PBM earnings step-up, increasing confidence [Cigna] will achieve its 2019 [earnings] target,” Jefferies analysts wrote in an Oct. 31 research note. Cigna raised its 2019 earnings per share estimate to a range of $16.80 to $17.00.