RADAR on Drug Benefits

  • Study: Pharma Companies Often Profit From Donations to Patient Assistance Charities

    Pharmaceutical companies often profit from their donations to non-profit patient assistance charities that are intended to help people afford high-cost medications, according to a study published in this month’s edition of the journal Health Affairs.  

    HHS’s Office of Inspector General (OIG) has provided guidance on the charities and cracked down in recent years on several charities and drug manufacturers. However, the authors noted that “the current regulations or enforcement permit donations that violate the spirit of Medicare’s Anti-Kickback Statute,” which prohibits pharma companies from covering Medicare Advantage enrollees’ out-of-pocket drug spending for the drugs they manufacture.  

  • Drug Price Negotiation Will Require New CMS Regulations, Staffing

    Now that Medicare can negotiate the price of prescription drugs it purchases, the Biden administration needs to figure out how it will hash out deals with drugmakers. Experts tell AIS Health, a division of MMIT, that implementation of the long-sought negotiation program will come with plenty of challenges and pitfalls.  

    The administration will have to issue new regulations, hire hundreds of staff, determine which drug prices will be negotiated first and design the criteria that will select drugs for negotiation in the future.  

  • Accelerated Approval Prices Are Unrelated to Clinical Value, Study Says

    The manufacturers of many drugs granted accelerated approval by the FDA do not complete timely confirmatory trials of the drugs’ efficacy, according to a recent study published in the journal Health Affairs — meaning that the pricing for many accelerated approval drugs has nothing to do with their clinical efficacy. The study’s author tells AIS Health, a division of MMIT, that “the market doesn’t work very well” for drugs that have received accelerated approval, and “what it leads us to is overpaying at the beginning and underpaying, potentially, later.” 

    After a drug is granted accelerated approval, the FDA mandates that the drug be evaluated using confirmatory clinical trials. The accelerated approval designation is given to new, unproven drugs that could potentially meet a dire need for a new or more effective therapy to treat a terminal disease. The intention behind the confirmatory trial system is to make sure that the drug actually does what its developer says it will. 

  • Report Shows Limited Access to Opioid Use Disorder Treatments for Medicare Beneficiaries

    More than 50,000 Medicare Part D beneficiaries experienced an opioid overdose in 2021, while almost a quarter of Part D enrollees (12.1 million) received at least one prescription opioid through Medicare, according to a recent report from the HHS Office of Inspector General.

    The proportion of beneficiaries receiving opioids has been declining, from 33% in 2016 to 23% in 2021. Alabama saw the highest proportion of opioid recipients (36%), while New York and Hawaii ranked the lowest (15%).
  • News Briefs: Walgreens to Complete Acquisition of Specialty Pharmacy

    Walgreens Boots Alliance, Inc. (WBA) will assume full control of specialty pharmacy Shields Health Solutions for approximately $1.37 billion cash, the firm said Tuesday. Walgreens already controlled the pharmacy, holding 71% of the company’s stock thanks to a $970 million deal that closed last year. WBA CEO Roz Brewer said in a press release that the deal will allow “further progress on our strategy through Shields’ integrated model, increasing our value to health systems, expanding access to payor partners and supporting improved outcomes and lower costs.” 

    Centene Corp. agreed to pay $165.6 million to the state of Texas over the state's contention that the insurer overcharged the state's Medicaid program for PBM services, according to legal documents obtained by Kaiser Health News (KHN). The settlement is the largest of a series of settlements from at least a dozen states over similar charges. The Texas settlement is the largest such arrangement, with Centene paying out at least $475 million so far to the states of Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New Mexico, Ohio, Texas, and Washington; three other states have not released the value of their settlements with the Medicaid-focused insurer, per KHN. Centene has divested most of its PBM assets over the past year, and told investors in 2021 that it set aside $1.25 billion to wind down its liability to states in this area.

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