Radar on Drug Benefits

Now that CMS has revealed the prices of the first 10 drugs subject to Medicare price negotiation, all eyes are on how Part D plans will cover those drugs on their formularies in 2026, when the new prices go into effect.  

To that end, a recent poll from Zitter Insights offers some clues about how payers and PBMs are thinking about this thorny question. 

The flash poll was conducted after CMS revealed the results of the first round of the Medicare Drug Price Negotiation Program, which was authorized by the Inflation Reduction Act. Through that process, Medicare for the first time set a Maximum Fair Price (MFP) for 10 branded drugs selected due to their high cost and lack of generic or biosimilar competition.  

Nearly 12% of generic prescription drugs could have had lower out-of-pocket costs if they were purchased through the Mark Cuban Cost Plus Drug Co. (MCCPDC) rather than through a traditional pharmacy using health insurance, according to a recent JAMA Health Forum study. Karen Van Nuys, Ph.D., a leading health policy expert who was not involved in the study, tells AIS Health the Mark Cuban company is doing a “tremendous service” by making medication prices transparent, although she suggests that it remains to be seen whether the firm and other cash pharmacies will have a major impact on the prices plans and members pay for drugs. 

Mark Cuban, a billionaire, founded MCCPDC in 2022 to bring more transparency to drug pricing and improve access to medications. The company discloses the amount it pays for drugs and then adds a 15% markup, $5 pharmacy fee and $5 shipping fee.  

Bluebird Bio Inc. disclosed during its second-quarter earnings release on Aug. 14 that it has had only four patients start treatment with Lyfgenia (lovotibeglogene autotemcel), a gene therapy for sickle cell disease (SCD) that the FDA approved in December. While company executives claimed there was still strong patient demand and payer interest for the treatment, Wall Street analysts noted the launch was slower than expected and called into question the ability of the medication to make an impact in the market.  

Bluebird executives also said they’re encouraged with the strides they’re making in discussions with payers, but admitted it was “too early to tell” if the drug will run into any coverage issues. 

If Medicare Part D covered GLP-1 drugs for obesity, rather than just Type 2 diabetes, it could increase annual spending by $3.1 billion to $6.1 billion, according to a recent Health Affairs study.

The introduction of GLP-1 medications for treatment of diabetes and obesity has reignited the debate over Medicare’s prohibition on covering weight loss medications. In June, the House Ways & Means Committee advanced legislation that would provide a limited pathway for adults 65 and older to get anti-obesity GLP-1s covered by Medicare. The bill has not yet passed the full House.

The Congressional Budget Office raised concerns about the potential harms of joint ownership of pharmacy benefits managers, health insurance companies and pharmacies in new responses to U.S. lawmaker questions, adding to the chorus of scrutiny that may be building toward 2025 congressional action against vertical integration in the health sector.

Insurance company and PBM mergers “tends to lower the prices paid for drugs” and “reduce spending on drugs for patients in vertically integrated health insurance plans,” the CBO found, but any reductions in spending by the plan may not be passed on to enrollees in the form of lower premiums.