RADAR on Drug Benefits

The state of California filed a lawsuit this month against three major PBMs and three pharmaceutical companies, accusing them of inflating the cost of insulin and violating the state’s Unfair Competition Law.  

Other states have had similar legislation pertaining to insulin costs, and the Federal Trade Commission (FTC) announced in June that it was examining the business practices of the six largest PBMs in the U.S., including the use of rebates for insulin medications. Still, David Kaufman, an attorney with Laurus Law Group LLC, tells AIS Health that the case in California could be significant and add to the growing pressure to make the PBM industry more transparent. 

The FDA’s accelerated approval pathway will see major changes following December’s passage of the Consolidated Appropriations Act, 2023 (2023 CAA), the latest version of the annual legislation that funds the federal government. Experts say that the changes should force drugmakers to be more diligent about proving the clinical value of their early-stage pharmaceuticals — as long as the FDA uses its enforcement powers. 

Stakeholders across the health care system have criticized the FDA’s approach to accelerated approval in recent years. The agency’s critics say that it has taken a lax approach, granting accelerated approval to drugs of dubious clinical value, which ultimately costs the health care system billions. In particular, the FDA’s move to grant accelerated approval to Biogen Inc.’s Alzheimer’s drug Aduhelm (aducanumab) faced criticism from researchers, medical practitioners, health systems and insurers. In addition, a recent congressional report documented ethical lapses by agency employees during the accelerated approval process for Aduhelm, and the HHS Office of Inspector General is currently investigating the agency’s decision.  

UnitedHealth Group’s Optum Rx PBM is rolling out a new price shopping tool, while Amazon.com Inc.’s pharmacy division is offering a flat-rate monthly prescription service to Prime members. Experts tell AIS Health, a division of MMIT, that the new offerings are signs that disruptors like Amazon, Mark Cuban Cost Plus Drug Co. and GoodRx Inc. are mounting an effective challenge to traditional generics coverage inside the pharmacy benefit. 

Amazon’s new offering, RxPass, will allow members to pay a flat fee of $5 per month to fill any combination of 52 eligible generics, plus free delivery, per a Jan. 24 press release. RxPass will be available in 42 states.  

In a new analysis that assesses whether major formularies provide “fair access” to select prescription drugs, payers achieved high scores in most categories. But industry observers as well as the organization behind the report, the Institute for Clinical and Economic Review (ICER), say that conclusion may not be the most important takeaway. 

ICER — which is best known for its assessments of prescription drugs’ cost-effectiveness — says in a press release that “one of the most notable results of this effort is the change in coverage policies made by five payers for 11 drugs following receipt of draft results of the assessment.”