HPW Rebuild

 

Some of UnitedHealthcare's customers will see cost savings at the pharmacy.

View as webpage.

 
hpw - topbar hpw - topbar - diag hpw - topbar xce
 

Mar. 9, 2018

Subscribe

Forward to a Friend

Share   

    

View Archived Issues

 
FEATURED STORY
 

In the Driver’s Seat: Accelerated Rx Rebates to Consumers

 
 

In an effort to increase transparency around drug pricing and provide savings directly to consumers, UnitedHealthcare (UHC) announced a new program that will pass a portion of drug manufacturer rebates directly to some customers at the point of sale instead of using them to spread the savings across all members through lowering premiums and cost-sharing.

This change does not apply to all UHC plans; starting in January, approximately 7 million UHC members enrolled in fully insured, commercial group benefit plans will see cost savings when they pick up their prescriptions. As quoted by Dan Schumacher, UHC president, in The New York Times, these members will save in the range of a couple of dollars to over a thousand dollars for each prescription. The approximately 18 million members in UHC’s “self-insured” plans (ie, plans supported by UHC where the employer customer is the payer), by contrast, will only see similar savings if their employers decide to pass along rebates to members. This change does not apply to Medicare Part D plans. A Request for Information to require Part D plans to pass along a portion of rebates is still under consideration with the Centers for Medicare & Medicaid Services (CMS).

Although improving transparency and putting savings into the hands of the consumers who are absorbing the prescription-drug expenses sound like a positive move, it may have unintended consequences for those not directly benefiting from the new program. In a Wall Street Journal article, Gerard Anderson, a Johns Hopkins University professor, stated his concerns that the new program may end up raising premiums for all members and that there could be increases in drug manufacturer payments to pharmacy benefit managers (PBMs) that are not considered rebates.

As one of the biggest health insurers in the country, UHC may serve as a model for other insurers that want to address high drug prices in response to recent pressure that insurers are not sharing discounts and rebates with beneficiaries.

 
XCENDA ORIGINAL RESEARCH: PATIENT ASSISTANCE PROGRAMS
 

On Our Radar: Payers Targeting Copay Assistance

 
 

Earlier this week at CBI’s annual Patient Assistance Program conference (my Super Bowl of conferences), I presented original Xcenda research on emerging trends within the payer and patient-support landscape. With manufacturer-sponsored copay assistance growing, plans and PBMs are looking to potentially target their use and suggest that this assistance drives up costs and undermines formulary management. Looking ahead, over 80% of payers we surveyed said they are at least somewhat likely to limit access to copay assistance in the next 2 years.

Of those currently limiting copay assistance (39% of payers surveyed), they are primarily using 2 tactics to restrict copay programs: accumulators and maximum allowable. Payers using the accumulator model (72%) exclude any copay assistance amount from the calculation of a patient’s out-of-pocket (OOP) expenses for the purposes of exhausting a deductible or reaching the OOP maximum. On the other hand, payers using the maximum allowable model (6%) will adjust the patient’s cost-share to the maximum allowed amount of copay assistance offered by the manufacturer copay program. Some payers (22%) are using both models concurrently.

Xcenda’s issue brief, Payer Tactics to Manage Commercial Copay Assistance, examines the prevalence of these models within the commercial market. We are passionate about discussing the impact on patients, so if you need more information on this or assistance with your patient-support strategy, please reach out to me at corey.ford@xcenda.com and click here to download the issue brief.

 
LEGISLATIVE UPDATES
 

Ducks in a Row: Oregon Passes Transparency Legislation

 
 

Another transparency proposal appears close to enactment, bringing the count now to 7 states with disclosure requirements specifically crafted for the pharmaceutical industry. Oregon’s HB 4005 was recently passed with strong bipartisan support in the state House and Senate and is expected to be signed by Gov. Kate Brown (D), possibly today. HB 4005 would require disclosure of detailed pricing data including extensive reporting requirements, impose civil penalties for non-compliance, and make the pricing data publicly available.

Additional disclosures will be also be required for any newly approved drugs exceeding the price threshold set by CMS for specialty drugs under Part D.

In 2016, Vermont became the first state to impose transparency legislation. Since then, over a hundred similar bills have been introduced in most state legislatures. The most notable of these were enacted last year in California, Maryland, and Nevada.    

The pharmaceutical industry has expressed concerns over HB 4005 reporting on research and development costs and releasing data without context for the role of “middlemen.” In written testimony, the senior director of state policy at the Pharmaceutical Research and Manufacturers of America (PhRMA) explained: “This bill provides an extremely narrow, over simplified, and distorted view of what is a complicated issue, with a complex supply chain and various actors. This bill is silent on the value of medicine and does not address some of the most impactful actors in the supply chain, namely PBMs and insurance carriers.”

As we have been noting in Health Policy Weekly, states have decided it is in their best interests to take the initiative to control their drug spending; drug-transparency legislation is one vehicle to pursue that goal. With more than a hundred bills on transparency being introduced in the last couple of years, this effort has moved beyond a trend and has emerged as a major battleground.

 

Legislative Bytes

 
 

HPW Rebuild

 
REGULATORY UPDATES
 

Potential Game Changer: Cigna to Buy Express Scripts

 
 

On Thursday, Cigna announced the latest blockbuster healthcare acquisition in a press release signaling its plan to purchase the country’s largest PBM, Express Scripts, in a cash and stock transaction for $67 billion.

The announcement resembles the pending massive vertical integration merger of CVS and Aetna, valued at $70 billion. Both deals present eyebrow-raising conflicts of interest, as the insurers Cigna and Aetna contract with PBMs other than Express Scripts and CVS, respectively. Other insurers and PBMs will have confidentiality concerns and raise firewall issues.

The deal still needs approval from shareholders and federal regulators.

 

Running It Up the Flagpole: FDA Addresses Health Plans

 
 

On Wednesday, Food and Drug Administration (FDA) Commissioner Scott Gottlieb gave an animated speech at the America’s Health Insurance Plans’ National Health Policy Conference on how competition (or the lack of) in the drug marketplace was being deliberately and collectively stymied by some of those who wield the largest influence in the healthcare system, such as pharmaceutical manufacturers, PBMs, and payers. These actions, he asserted, have directly eroded access and increased the financial burden on patients.

Gottlieb acknowledged that the FDA does not, and should not, participate in drug-pricing processes, but he reiterated the agency’s purpose is to “promote and protect public health, and helping ensure access to medicine is a vital part of this mission.”

Gottlieb used biosimilars to illustrate how he sees opportunities to simultaneously advance innovations in medicine, expand access to other high-quality treatments, and lower patient OOP costs and premiums. Gottlieb cited generic drugs as a parallel to describe their positive impact and “savings for patients and our healthcare system overall” and pointed out that biosimilars at launch are discounted approximately 15% to 20% lower than their reference-product counterparts.

Gottlieb believes “pay-for-delay” schemes have become commonplace in the industry, which allow branded drugs to stave off less costly generics. He also raised the issue of how rebate agreements among drug manufacturers, PBMs, and payers for branded products create very little incentive for payers to place biosimilar drugs in a competitive position relative to brand therapies. Gottlieb asserted that these types of litigation, rebating, and contracting practices, as well as consolidation in the drug supply chain, have “misaligned incentives” and resulted in patients paying more for their treatments.

Gottlieb closed by telling the audience they have to choose between short-term profits or a healthcare system that benefits all stakeholders. He challenged them to design formularies in a way that makes biosimilars the first treatment option for patients, loosen utilization management criteria on biosimilars like prior authorization requirements, and actively participate in provider education efforts to increase awareness, safety, and value of biosimilars before “trust [in payers and innovators] is eroded completely.”

 

Cracking the Whip: HHS on the Transition to Value

 
 

In comments this week to the Federation of American Hospitals, HHS Secretary Alex Azar said he expects that the shift to value-based care will have to "accelerate dramatically" and it needs a "radical reorientation" to a more consumer-based model. He said the Trump Administration is not opposed to aggressive intervention, if necessary, to reduce costs, including the price of prescription drugs.

"Today’s healthcare system is simply not delivering outcomes commensurate with its cost," he said. "The current trajectories in health spending are both unsustainable and unmatched by increases in quality."

Azar said the HHS budget was just under $400 billion in 2001 when he started working at the agency and has grown to $1.2 trillion today. Federal spending on major healthcare programs is projected to rise from 5.5% of the United States economy in 2016 to 8.9% 30 years from now. “By themselves,” he said, “these programs will consume almost all of the income taxes collected by the federal government."

"For over a decade,” he continued, “we have been on a journey to replace that equation with a new one—paying for outcomes and wellness—but that transition needs to accelerate dramatically. Some argue healthcare is simply different and is and should be immune from market forces. I simply disagree. Real competition—in the economic sense—has never really been fully tried in our bizarre third-party payer system."

Azar outlined 4 areas of focus where he hopes to drive change:

  1. Giving consumers greater control over health information through interoperable and accessible health information technology
  2. Encouraging transparency in pricing from providers, payers, pharmacies, and drug manufacturers
  3. Using experimental models in Medicare and Medicaid to drive value and quality throughout the entire system
  4. Removing government burdens that impede value-based transformation (eg, Medicare and Medicaid price reporting rules, restrictions in some FDA communication policies between manufacturers and payers)

Azar’s talk capped off a week of tough talk from Scott Gottlieb and him about the need for markets to be freed up to perform better, emphasizing the Administration’s plans for an assist via regulatory action to improve healthcare’s value proposition for consumers.

 

Information Buffet (AKA, Other Stuff That Caught Our Attention)

 
 

We kept running into stories we wanted to bring to your attention, so here’s a quick hit list of other news we thought you should know:

 
HEARD ON THE STREET
 

“We asked more than 5,000 patients, more than 600 physicians, and more than 500 employers who provide medical benefits across the nation how they think about the quality, service, and cost of healthcare…. What we discovered is that there are fundamental differences in how they define value in healthcare and to whom they assign responsibility for achieving it. Value, it seems, has become a buzzword; its meaning is often unclear and shifting, depending on who’s setting the agenda. As a result, healthcare stakeholders, who for years thought they were driving toward a shared destination, have actually been part of a fragmented rush toward different points of the compass.”

 

– Robert C. Pendleton, MD, professor of medicine, University of Utah School of Medicine and chief medical quality officer, University of Utah Health

Source: “We Won’t Get Value-Based Health Care Until We Agree on What ‘Value’ Means,” Harvard Business Review, February 27

 
POLICY BY NUMBERS
 

$64 Billion

 

UnitedHealth Group, the nation’s largest health insurance company, is paying nearly 60% of its $130 billion in annual medical spending via value-based models.

Source: “UnitedHealth Group Hits $64 Billion in Value-Based Care Spending,” Forbes, March 5

 
UPCOMING MEETINGS & CONFERENCES
 

AMCP Managed Care & Specialty Pharmacy Annual Meeting

April 23–26 l Boston, MA
Join AmerisourceBergen companies, US Bioservices and Xcenda, at AMCP’s Annual Meeting at the Boston Convention and Exhibition Center, April 23–26. Meet with our specialty pharmacy and commercialization experts at the largest gathering of managed care professionals who work, lead, and innovate in the ever-changing world of pharmaceutical management. Visit AmerisourceBergen at booths 316 and 321. Learn more

 

HPW Rebuild

 
 

Count on Health Policy Weekly for an at-a-glance view of legislative and regulatory developments and news that impacts the healthcare industry.

 
 
 
 

HPW Rebuild

 
FEATURED CONTRIBUTORS
 

EDITOR-IN-CHIEF:
Jennifer Snow
Senior Director,
Health Policy
Xcenda

MANAGING EDITOR:
Scott Shields
Associate Director,
Health Policy
Xcenda

 

ADVISORY BOARD:

Peyton Howell, MHA
Executive Vice President & President, Health Systems & Specialty Care Solutions | AmerisourceBergen Corporation

Amy Grogg, PharmD
Senior Vice President | Strategy & Commercialization | AmerisourceBergen Corporation

Kristine Flemister, PharmD
President | Xcenda

Tommy Bramley, PhD, RPh
President | Lash Group

Stacie Heller
Vice President | Government Policy | AmerisourceBergen Corporation

Rita Norton
Senior Vice President | Government and Public Policy | AmerisourceBergen Corporation

Ana Stojanovska
Vice President | Reimbursement & Policy Insights | Xcenda

CONTRIBUTING AUTHORS:

Herman Chen | Corey Ford | Jennifer Le | Scott Shields | Aileen Soper | Stephen Wilson 

PRODUCTION:

Kylie Matthews | Ellen Olson

HPW Rebuild

 

Mar. 9, 2018

Subscribe

Forward to a Friend

Share   

    

View Archived Issues

 

 

Connect with AmerisourceBergen:   AmerisourceBergen.com   I  AmerisourceBergen Insights  |   LinkedIn   I  Twitter  

Connect with Xcenda:   Xcenda.com   I   LinkedIn   I  Twitter