Radar on Drug Benefits

The pharmaceutical industry should continue to enjoy strong financial results in the next 12 to 18 months, according to a new report from Moody’s Investors Service. The credit ratings firm projects 4% to 6% growth in annual earnings before interest, taxes, depreciation and amortization over that period.

The authors predict that growth will be driven by increased uptake of oncology, immunology and diabetes drugs; COVID-19 vaccines and boosters; and a low number of patents set to expire. However, the report does project some headwinds for pharmaceutical firms, namely potential drug pricing legislation and increased biosimilar development. The report also predicted that “pharmaceutical spending will continue to rise globally, across almost all regions.”

Mail-order pharmacies garnered a larger-than-ever share of the prescription drug business due to the pandemic. Though data varies, some insiders say the shift away from retail to mail order is durable, and experts say prescription delivery could become a dominant channel, especially for maintenance medications.

The move toward delivered prescriptions also builds on a trend that emerged from payer-PBM rollups in recent years, which has led the merged firms to try to tempt members into mail-order fills. The combined firms, such as Cigna Corp./Express Scripts, have a strong incentive to bypass retail pharmacies. Doing so allows the firms to retain more rebate revenue and avoid coupons at the point of sale. Meanwhile, prescription delivery originating at a retail pharmacy has drawn some of the same gig economy players that have competed for restaurant takeout and grocery delivery, such as Uber Inc.

In a move that signals Blue Cross Blue Shield plans are getting increasingly serious about driving down the cost of prescription drugs, five major Blues affiliates on June 22 launched a startup company that aims to “offer innovative medication solutions to patients, providers and customers.”

Blue Cross Blue Shield of Massachusetts, Blue Cross Blue Shield of Michigan, Blue Shield of California, Highmark Inc. and Independence Blue Cross are all providing “significant funding” to support the launch of Evio, which they characterize as an “independent pharmacy solutions startup.”

✦ HHS said on June 9 that the U.S. government will procure approximately 1.7 million courses of Merck & Co.’s investigational antiviral treatment for COVID-19, molnupiravir (MK-4482), pending emergency use authorization or approval from the FDA. The treatment — which is designed to induce viral genome copying errors to prevent the virus from replicating in the human body — is currently being studied in a Phase III trial for its potential to reduce the risk of hospitalization or death in patients who have COVID-19 symptoms for five days or less and are at high risk for severe illness. It has also “demonstrated broad-spectrum activity against other viruses such as influenza, Ebola, and Venezuelan Equine Encephalitis virus,” HHS said.

✦ The White House, HHS and the FDA on June 8 released a report containing several policy recommendations to address “vulnerabilities in U.S. pharmaceutical supply chains” that the COVID-19 pandemic revealed. For its part, HHS will make an initial commitment of about $60 million, sourced from the Defense Production Act appropriation in the American Rescue Plan, “to develop novel platform technologies to increase domestic manufacturing capacity for API [active pharmaceutical ingredients].” The report’s overall policy recommendations, meanwhile, are based on four main themes: boosting local production and fostering international cooperation; promoting research and development that establishes innovative manufacturing processes and production technologies to strengthen supply chain resilience; creating robust quality management maturity to ensure consistent and reliable drug manufacturing and quality performance; and leveraging data to improve supply chain resilience.

Spurred by CMS’s decision to cover chimeric antigen receptor T-cell therapies under Medicare, commercial payers are beginning to systematize approvals for CAR-T treatment as use of these breakthrough cancer therapies is beginning to ramp up, experts say.

“Despite the costs of CAR-T, I know many plans were already looking at providing coverage prior to the CMS decision,” which was released in October 2019, says Dan Danielson, R.Ph., senior director of the access experience team at PRECISIONvalue. “CMS’s decision provided confirmation that they were on the right track,” he tells AIS Health, a division of MMIT.