Radar on Drug Benefits

Utilization and Spending in Medicaid Outpatient Prescription Drugs Show Stable Increases

April 5, 2019

Medicaid outpatient drug utilization increased from 621.7 million prescriptions in 2014 to 752.9 million in 2017, according to a Kaiser Family Foundation report.

by Jinghong Chen

Medicaid outpatient drug utilization increased from 621.7 million prescriptions in 2014 to 752.9 million in 2017, according to a Kaiser Family Foundation report. Over the same period of time, Medicaid spending before rebates increased 39%, with antivirals the most costly drug group before rebates. In recent years, antidepressants became the most frequently prescribed drug group, accounting for 7% of total Medicaid prescriptions in 2017. Generic drugs accounted for 86% of Medicaid prescription drug volume, but only 21% of Medicaid spending in 2017.

NOTE: Spending amounts do not include rebates.
SOURCE: Kaiser Family Foundation analysis of 2014-2017 State Drug Utilization Data, Wolters Kluwer Clinical Drug Information, Inc., 2018. Visit https://bit.ly/2IsePuL.

How Would Drug Affordability Review Boards Affect Health Insurers?

April 3, 2019

In the ongoing effort to curb rising drug costs, several states have introduced legislation that would create “drug affordability review boards” tasked with establishing a maximum amount that insurers would pay for drugs when prices rise above a set threshold.

By Leslie Small

In the ongoing effort to curb rising drug costs, several states have introduced legislation that would create “drug affordability review boards” tasked with establishing a maximum amount that insurers would pay for drugs when prices rise above a set threshold.

In the eyes of the consultant who is helping states develop such measures, this approach to lowering drug costs will only benefit health insurers.

“The point is absolutely to help payers, and then they can help their enrollees” afford their prescription drugs, says Jane Horvath, a health care policy consultant and former senior policy fellow at the National Academy for State Health Policy (NASHP), which developed model legislation that the state bills are based on.

According to Horvath, the states’ bills all follow a similar formula: A board composed of five members first collects input from the public and health plans about drugs that appear to be “stressing the system,” such as new brand-name drugs with a wholesale acquisition cost of $30,000 or more per year.

Using the example of a new, pricey oncology drug with fewer side effects than an existing therapy, Horvath explains that the board then might ask health plans in the state about the net cost for the drug that the new medication is superseding. “What the health plan used to spend on the prior product maybe becomes the de facto affordability point,” she says.

For its part, America’s Health Insurance Plans (AHIP) appears somewhat supportive of the concept.

“Drug review boards at the state level can help drive transparency in how drug prices are set and why those prices are going up,” AHIP spokesperson Kristine Grow said in a statement to AIS Health. “We believe that information should then be used to find ways to increase competition and introduce new levers to negotiate lower prices.”

New Postpartum Depression Drug Poses Challenges to Payers

April 1, 2019

The FDA’s recent approval of the first medication specifically aimed at treating postpartum depression is drawing a favorable response from clinicians, while payers could face challenges.

PBM executives tell AIS Health that the postpartum depression drug, Zulresso (brexanolone) injection, is likely to be covered under the medical, not the pharmacy, side of the benefit.

By Judy Packer-Tursman

The FDA’s recent approval of the first medication specifically aimed at treating postpartum depression is drawing a favorable response from clinicians, while payers could face challenges.

PBM executives tell AIS Health that the postpartum depression drug, Zulresso (brexanolone) injection, is likely to be covered under the medical, not the pharmacy, side of the benefit.

Zulresso’s initial U.S. list price “will be $7,450 per vial, resulting in a projected average course of therapy cost of $34,000 per patient before discounts,” says Alexis Smith, a spokesperson for Zulresso’s manufacturer, Sage Therapeutics, Inc.

As the medication must be administered as a 60-hour continuous intravenous infusion, it’s a challenge for a new mother to be hospitalized in an approved facility for two-and-a-half days for an IV infusion, says Dea Belazi, Pharm.D., president and CEO of AscellaHealth. Moreover, he says, there is “the fact that there are possible extensive side effects and the data on its [Zulresso’s] effectiveness [are] moderately better than placebo. The cost will also play a barrier,” he adds.

Camille Hoffman, M.D., associate professor in the University of Colorado’s Department of Ob/Gyn, describes the newly approved drug as “a breakthrough medication” that “rapidly improves postpartum depression out to, at least, 30 days following the one-time treatment.”

She acknowledges that the need to administer Zulresso via a 60-hour IV drip and its restricted distribution might present challenges. However, she says, “I hope that payers will consider these potential barriers in light of how quickly it acts to help women with severe postpartum depression.”

New Nasal Spray Offers Hope for Depression Treatment, But Coverage May Be Tricky

March 20, 2019

Many clinicians have publicly expressed cautious optimism about the FDA’s recent approval of a nasal spray for major depressive disorder in adults who have been resistant to multiple other treatments. But payer issues abound for Spravato (esketamine), partly because the FDA is imposing strict parameters on its use due to safety concerns.

By Judy Packer-Tursman

Many clinicians have publicly expressed cautious optimism about the FDA’s recent approval of a nasal spray for major depressive disorder in adults who have been resistant to multiple other treatments. But payer issues abound for Spravato (esketamine), partly because the FDA is imposing strict parameters on its use due to safety concerns.

Esketamine is derived from ketamine, a general anesthetic first approved by the FDA in 1970. Similar to ketamine, Spravato is designated as a Schedule III controlled substance that may carry the risk of illicit use or diversion. In approving Spravato on March 5, The FDA said that the nasal spray cannot be taken at home. Instead, the patient must self-administer it under the supervision of a health care provider in a doctor’s office or clinic certified by the drug’s manufacturer — a distribution model that will further add to the cost of an already expensive treatment.

Typically, the cost of generics for antidepressants is “really inexpensive, less than $50 a month,” notes Dea Belazi, Pharm.D., president and CEO of AscellaHealth, a Berwyn, Pa.-based PBM. By comparison, the cost would mushroom into thousands of dollars monthly for Spravato.

Janssen’s nasal spray can work faster than other treatment options, with some antidepressants requiring four to six weeks of use to become effective, Belazi notes. “Some psychotherapists I’ve talked to see esketamine as a bridge while antidepressants kick in,” he says. However, “because of the price point, I’d guess 99% of payers will limit this to a treatment-resistant population.”

The bottom line is, “there’s a significant cost implication here for the payers,” Belazi says, “and most payers will want to calculate what the patient population could look like to estimate costs. The data aren’t very clear on that….At the end of the day, it’s a debilitating disease. But if it’s high cost, you’d likely be looking at other options.”

Soaring Insulin Prices Prompt Insurers to Take Action

March 18, 2019

Amid increasing public scrutiny of rising insulin prices, some health insurers are taking matters into their own hands to help their diabetic members afford the lifesaving medications.

At the integrated health system HealthPartners, the members who are hardest hit by rising insulin prices are those in high-deductible health plans, says Young Fried, vice president of pharmacy plan services. But she says insulin affordability is also an issue for Medicare members who are in the Part D “doughnut hole.”

By Leslie Small

Amid increasing public scrutiny of rising insulin prices, some health insurers are taking matters into their own hands to help their diabetic members afford the lifesaving medications.

At the integrated health system HealthPartners, the members who are hardest hit by rising insulin prices are those in high-deductible health plans, says Young Fried, vice president of pharmacy plan services. But she says insulin affordability is also an issue for Medicare members who are in the Part D “doughnut hole.”

One tactic that the organization’s health plan deploys to ease the burden on members is a policy called “plan pay the difference,” Fried says. If a brand drug becomes cheaper than the generic version after rebates, “we would actually have the member pay the generic copay instead of the brand, and then we would reimburse the pharmacy the brand cost, so that they’re made whole as well,” she says.

At Geisinger Health Plan, Medicare enrollees are the ones who have the most trouble paying for their insulin, according to Jamie Miller, the health plan’s system director of managed care pharmacy. Overall, Geisinger saw its spending in the diabetes drug class rise 13.8% between 2017 and 2018, she adds.

As Geisinger works out what it wants its Medicare benefit to look like in 2020, Miller says one goal is to make insulin more affordable for its senior members. Thus, the health plan is considering adding a sixth, “zero-dollar” tier to its Part D formulary where it would put insulin and select other drugs.