Radar on Drug Benefits

Anthem, Cigna, CVS Report Strong PBM Performance Amid COVID-19

August 17, 2020

For PBMs, 2020 has been far from business as usual, given the myriad ways the COVID-19 pandemic has changed how people interact with the health care system. However, during their second-quarter earnings conference calls, companies that own some of the largest PBMs emphasized that they are largely satisfied with how the PBM segments of their businesses are performing.

Anthem, Inc. Chief Financial Officer John Gallina said during the insurer’s earnings call that “IngenioRx is actually doing quite well, and has really done a nice job of meeting our expectations.”

By Leslie Small

For PBMs, 2020 has been far from business as usual, given the myriad ways the COVID-19 pandemic has changed how people interact with the health care system. However, during their second-quarter earnings conference calls, companies that own some of the largest PBMs emphasized that they are largely satisfied with how the PBM segments of their businesses are performing.

Anthem, Inc. Chief Financial Officer John Gallina said during the insurer’s earnings call that “IngenioRx is actually doing quite well, and has really done a nice job of meeting our expectations.”

Anthem is on track this year to realize $900 million in operating profit contributed from its relatively new PBM, which exceeds its prior expectation of $800 million, Credit Suisse analyst A.J. Rice pointed out in a July 29 note to investors. But he also noted that while maintenance prescription volume was steady compared with the prior-year quarter, “new scripts saw a 10-15% drop in April versus normal utilization. Thus, IngenioRx captured less profit in Q2.”

CVS Health Corp., which owns the PBM Caremark, reported that operating income and adjusted operating income for its pharmacy services segment increased 6.2% and 2.4%, respectively, from the prior-year quarter. Those results were “primarily driven by growth in specialty pharmacy and improved purchasing economics,” but they were offset by “continued price compression and previously disclosed client losses,” the company said in its earnings release.

Cigna Corp. reported on July 30 that for its health services segment — which houses the PBM Express Scripts — pretax adjusted income from operations increased 7% relative to the second quarter of 2019.

Executives from Anthem, Cigna and CVS all acknowledged that the PBM selling season for 2021 was affected by the shutdowns and economic uncertainty ushered in by the COVID-19 pandemic.

Anthem President and CEO Gail Boudreaux described the selling season as “an interesting operating environment, given all the change.” As the insurer mentioned in its first-quarter earnings call, “things are, I would say, at least slightly delayed, as customers try to work through their own stability across their business,” Boudreaux said.

Alan Lotvin, M.D., the executive vice president and president of Caremark, offered: “I’d say the season itself has been interesting in the lumpiness with COVID, but overall ending up about where we thought.”

Manufacturers, Payers Wait on Federal COVID-19 Vaccine Distribution Plan

July 27, 2020

As the many COVID-19 vaccines under development barrel toward clinical trials for safety and efficacy, questions remain about how they will be distributed when they become available.

In a hearing held by a subcommittee of the House Energy & Commerce committee, pharmaceutical executives said they would rely on guidance from the Trump administration and the Centers for Disease Control and Prevention (CDC) to distribute vaccine doses.

By Peter Johnson

As the many COVID-19 vaccines under development barrel toward clinical trials for safety and efficacy, questions remain about how they will be distributed when they become available.

In a hearing held by a subcommittee of the House Energy & Commerce committee, pharmaceutical executives said they would rely on guidance from the Trump administration and the Centers for Disease Control and Prevention (CDC) to distribute vaccine doses.

Those guidelines will be important to insurers, as vaccine doses aren’t likely to be available to everyone immediately, according to Mike Schneider, a principal at Avalere Health. Though some firms have already begun manufacturing doses of their vaccine in parallel to testing, the immediate availability of hundreds of millions of doses at the time of FDA approval would be unprecedented.

Schneider notes that multiple vaccines may be available at the same time, and one may offer greater protection from COVID-19 than others. Protocols will need to be developed to determine which patients will be first in line for the most effective vaccine. Schneider says that plans need to start thinking about their internal guidelines now.

He adds that PBMs, which often have the most robust data about a patient’s drug regimen and immunization status, will be essential to tracking who has been vaccinated and screened.

Schneider says that plans are unlikely to favor one vaccine over another in their formularies. For example, Prime Therapeutics, a PBM owned by Blue Cross and Blue Shield affiliates, says it is committed to obtaining a supply of COVID-19 vaccine as soon as possible, seemingly regardless of who manufactures it.

A July 20 analysis prepared by health care investment bank SVB Leerink LLC takes a different view of the shape of the initial vaccine market than Schneider’s prediction of scarcity, arguing that the sheer volume of development efforts makes more than one breakout product likely.

In any case, Schneider predicts that the initial rollout will be unusual when compared with other vaccine distribution.

“This won’t just be going to your pharmacy and your pharmacist gives you a vaccine, like the flu vaccine,” Schneider says. He suspects that rollout will involve specialized facilities that combine rapid screening with inoculations at the same site.

IngenioRx Acquires ZipDrug to Improve Medication Adherence, Affordability

July 16, 2020

In what one expert calls a “logical” move for a PBM vying for business from cost-conscious payers, Anthem, Inc.’s IngenioRx said on July 6 that it acquired ZipDrug, a company that focuses on improving patients’ medication adherence and affordability.

“As plan sponsors and members opt in for the service, ZipDrug ensures members are matched with the best high-quality pharmacy to fulfill their needs,” Justin Petronzi, IngenioRx’s vice president of strategic growth, explains to AIS Health via email. Services offered by ZipDrug include “guaranteed prescription delivery, multi-dose compliance packaging that provides specific instructions to empower patients to manage their medications at home safely on a daily basis, along with other targeted clinical programs,” he says.

By Leslie Small

In what one expert calls a “logical” move for a PBM vying for business from cost-conscious payers, Anthem, Inc.’s IngenioRx said on July 6 that it acquired ZipDrug, a company that focuses on improving patients’ medication adherence and affordability.

“As plan sponsors and members opt in for the service, ZipDrug ensures members are matched with the best high-quality pharmacy to fulfill their needs,” Justin Petronzi, IngenioRx’s vice president of strategic growth, explains to AIS Health via email. Services offered by ZipDrug include “guaranteed prescription delivery, multi-dose compliance packaging that provides specific instructions to empower patients to manage their medications at home safely on a daily basis, along with other targeted clinical programs,” he says.

Petronzi adds that IngenioRx’s interest in ZipDrug materialized after it began a pilot program in 2018 in New York and New Jersey markets that was focused on matching members with the best pharmacy for their needs and providing deliveries of lower cost prescriptions.

To Avalere Health consultant Tim Epple, IngenioRx’s purchase of ZipDrug makes sense. “It’s an investment that follows a lot of trends and themes that we’re seeing in the industry,” he tells AIS Health. “And I think certainly from a PBM perspective, [ZipDrug’s services are] something that we’re hearing that a lot of payers and a lot of plans want, because they’re thinking through these same strategies on their end, and giving them the ability to do that in a sort of ‘one-stop shop’ is a logical and probably good move.”

In general, “we’ve actually seen a lot more interest in the pharma services sector,” Epple says, explaining that helping “lowest-hanging fruit patients” — those who are high cost but struggle with medication adherence — is an area that plan sponsors “are really looking hard at now as they think about how to bend the cost curve and really figure out where they can save money at a relatively simple level.”

The acquisition also aligns with the ongoing trend of specializing pharmacy assets, he adds. “I think we’re seeing a little bit of a movement toward specialty pharmacy platforms that really have specific expertise in either certain disease states, certain patient types [or] certain intervention types,” Epple says.

Remdesivir’s $3,120 Price Tag Stirs Debate

July 14, 2020

Gilead Sciences, Inc. recently revealed that for promising COVID-19 treatment remdesivir, it will charge $2,340 for a typical five-day, six-vial treatment course for people covered by U.S. government health programs and $3,120 for those covered by private insurance.

In an open letter, Gilead CEO Daniel O’Day argued that Gilead priced remdesivir “well below” its estimated value, considering it can save the U.S. health care system approximately $12,000 per patient by reducing the length of COVID-19 patients’ hospital stays.

By Leslie Small

Gilead Sciences, Inc. recently revealed that for promising COVID-19 treatment remdesivir, it will charge $2,340 for a typical five-day, six-vial treatment course for people covered by U.S. government health programs and $3,120 for those covered by private insurance.

In an open letter, Gilead CEO Daniel O’Day argued that Gilead priced remdesivir “well below” its estimated value, considering it can save the U.S. health care system approximately $12,000 per patient by reducing the length of COVID-19 patients’ hospital stays.

But not everyone is convinced by that argument.

“So they’re saying by shortening hospital stays, the system is going to save all these monies, but I always ask the question, ‘Why is it that the drug company should get to pocket all or some substantial portion of that savings?” says Jack Hoadley, Ph.D., a research professor emeritus at Georgetown University’s Health Policy Institute. “That’s a savings we should accumulate for consumers, for payers [and] everybody else.”

Hoadley is not alone in those views. The advocacy group Patients for Affordable Drugs, in a June 29 statement, wrote that “Gilead’s price for remdesivir shows once again that we can’t trust Big Pharma to act responsibly — even in the face of a global pandemic.”

The U.S. government helped fund the development of remdesivir, and dexamethasone — a generic steroid — is priced at less than $1 per day even though it “showed promise for combating severe COVID-19 cases and reducing potential mortality rates,” the organization said.

The Institute for Clinical and Economic Review (ICER) also brought up dexamethasone in its statement. The U.S. price range of $2,340 to $3,120 is “is largely in line with ICER’s independent assessment suggesting that a price of approximately $2,800 would be reasonable in proportion to the added benefits for patients and the cost offsets in the health system now that dexamethasone is rapidly becoming standard of care,” wrote ICER President Steven D. Pearson, M.D.

Leerink analyst Geoffrey Porges, in a June 29 note to investors, pointed out that the U.S. commercial price set for remdesivir was below his firm’s expectations. Still, “we believe the disclosed [remdesivir] pricing is reasonable, and should provide significant value to the Gilead shareholders and still deflect much of the criticism the company might face in this emergency,” Porges wrote.

FDA Approves New Treatments for nr-axSpA, But Coverage May Be Tricky

July 1, 2020

The FDA’s approval of two interleukin-17A (IL-17A) antagonists — Eli Lilly and Co.’s Taltz (ixekizumab) and Novartis Pharmaceuticals Corp.’s Cosentyx (secukinumab) — to treat active non-radiographic axial spondyloarthritis (nr-axSpA) offers providers new options for patients who are intolerant of non-steroidal anti-inflammatory medications (NSAIDs) and other therapies.

Axial spondyloarthritis (axSpA), an inflammatory arthritis of the spine, was reclassified into two categories. In the more commonly known ankylosing spondylitis (AS), also called radiographic axial spondyloarthritis (r-axSpA), damage to the spine is visible on an X-ray. In the earlier-stage form of the disease, non-radiographic axial spondyloarthritis (nr-axSpA), joint deterioration is not yet evident on an X-ray.

By Jane Anderson

The FDA’s approval of two interleukin-17A (IL-17A) antagonists — Eli Lilly and Co.’s Taltz (ixekizumab) and Novartis Pharmaceuticals Corp.’s Cosentyx (secukinumab) — to treat active non-radiographic axial spondyloarthritis (nr-axSpA) offers providers new options for patients who are intolerant of non-steroidal anti-inflammatory medications (NSAIDs) and other therapies.

Axial spondyloarthritis (axSpA), an inflammatory arthritis of the spine, was reclassified into two categories. In the more commonly known ankylosing spondylitis (AS), also called radiographic axial spondyloarthritis (r-axSpA), damage to the spine is visible on an X-ray. In the earlier-stage form of the disease, non-radiographic axial spondyloarthritis (nr-axSpA), joint deterioration is not yet evident on an X-ray.

“It’s possible that with the emerging trend of biologics gaining expanded indications to treat non-radiographic axial spondyloarthritis, payers will respond by choosing a preferred agent from the three [biologics] approved,” says Mesfin Tegenu, R.Ph., president of PerformRx. “However, expanded indications for biologics in the treatment of non-radiographic axial spondyloarthritis, being a less advanced form of ankylosing spondyloarthritis, might cause no changes to formularies.”

Nicole Kjesbo, Pharm.D., principal clinical program pharmacist at Prime Therapeutics LLC, says that although Taltz and Cosentyx provide a new mechanism of action to treat nr-axSpA, “at this time, their FDA approvals for this indication will not change the course of therapy, as they were already recommended for off-label use by guidelines.”

The two newly approved biologics are listed in clinical guidelines as third-line treatments, behind NSAIDs and tumor necrosis factor inhibitors (TNFis), Kjesbo says, and according to the guidelines, “TNFis are recommended over Taltz or Cosentyx.”

“NSAIDs are most commonly used for axial SpA (AS and nr-axSpA), and in many patients this is the only drug ever needed,” Tegenu says. “Most NSAIDs are available generically.”

“Second-line therapy is any tumor necrosis factor inhibitor (TNFi),” adds Tegenu. And Kjesbo explains that “TNFi treatment is recommended over treatment with Taltz, Cosentyx or [Pfizer Inc.’s] Xeljanz/XR (tofacitinib).”

Only one other drug was previously labeled to treat nr-axSpA: UCB’s TNFi, Cimzia (certolizumab pegol). In patients who try and fail or have contraindications to NSAIDs and to TNFis, the two IL-17A inhibitors — Taltz and Cosentyx — are indicated for AS, Tegenu says.