Radar on Drug Benefits

Though cutting-edge gene and cell therapies can transform patients’ lives, they’ve strained pharmacy budgets across the health care sector, and state Medicaid programs are no exception. With dozens of such therapies likely to earn FDA approval in coming years, Medicaid administrators and policy experts are working out how best to control costs and manage risk.

Gene and cell therapies can have courses with costs in the millions of dollars for one patient. States’ Medicaid programs must cover all FDA-approved drugs, though manufacturers are required by law under the Medicaid Drug Rebate Program (MDRP) to provide Medicaid programs with the “best price” for prescription drugs — defined as the lowest available price to any wholesaler, retailer or provider, excluding certain government programs. Despite that offset, the increasing use of expensive therapies has had a dramatic effect on Medicaid budgets: in 2017, drugs costing more than $1,000 per claim accounted for 43.7% of all Medicaid drug spending, according to an opinion piece published in the Journal of the American Medical Association (JAMA) on Oct. 11.

Multiple insurers are increasing their use of pharmacists — both those they employ and pharmacists in retail settings — to help deliver care to hard-to-reach members who are at risk of poor health outcomes.

The programs, set up by health plans ranging from Highmark to L.A. Care Health Plan, intervene with patients at risk for conditions ranging from diabetes to opioid addiction. They use pharmacists in direct patient counseling, for medication therapy management and for data analysis, the plans say. Medicaid members are a particular target.

Midwestern supermarket chain Hy-Vee, Inc. launched a new PBM subsidiary on Dec. 3, joining the already-crowded ranks of retail stores that have done the same, such as Costco Wholesale Corp., The Kroger Co. and Walgreens Boots Alliance Inc. Industry consultants tell AIS Health that while Hy-Vee’s new PBM may struggle to compete with large and well-established players, there are ways it can still appeal to employers that are dissatisfied with the status quo in pharmacy benefits management.

“Starting a PBM today is risky, because the pharmacy benefits market is dominated by a few very large, sophisticated and insurance-integrated PBMs,” says Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates.

✦ Prime Therapeutics LLC, the PBM co-owned by 18 Blue Cross and Blue Shield plans, hired a new data analytics executive team. The new hires include Urvi Randhar as senior vice president and chief information and technology officer, Sam Mohanty as vice president and chief data officer, and Sarah Taylor as vice president and chief analytics officer. Randhar was most recently vice president of digital products at Healogics Inc., while Mohanty previously worked at United Airlines Inc. and CVS Health Corp., and Taylor formerly held roles at UnitedHealthcare, UCare Minnesota Inc. and Medica Corp. Read more at https://bit.ly/376pKDn.

✦ CVS Health Corp. announced that Neela Montgomery will be executive vice president and president of its Pharmacy/Retail division, effective Nov. 30. Karen Lynch, who will take over as CVS’s CEO after Larry Merlo retires, praised Montgomery as “a seasoned retail industry leader with extensive digital and e-commerce experience” who “brings deep consumer insights.” Montgomery was previously CEO of Crate & Barrel Holdings Inc. Read more at https://bit.ly/3l63NJJ.

As details continue to emerge about the availability of COVID-19 vaccines and how they will be administered, the role that payers will play in the process is becoming clearer.

It’s imperative for health plans to do two key things at the same time, according to Katherine Dallow, M.D., the vice president of clinical programs and strategy at Blue Cross Blue Shield of Massachusetts (BCBSMA). Payers need to help the entities that will be distributing the vaccine to identify the individuals who should be first in line to be vaccinated, and they need to use their resources to help educate the community.